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1 - 10 of 20 (0.25 seconds)Section 115JA in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Section 2 in The Customs Act, 1962 [Entire Act]
Cit vs Hotel Hilltop on 17 March, 2008
We have heard the rival submissions and perused the records. The facts
and circumstances of the case before the Special Bench are entirely different to
the facts and circumstances of the case before us. In the case before the Special
Bench the trustees of Narmadaben Nandlal Trust (NNT) held the shares on
behalf of the trust only as legal owners and were not the beneficial owners of the
shares. Whereas, in the case before us, Shri Raju
Shete and Smt. Hemal Shete are the common shareholders in both the companies
i.e. in the assessee company as well as in the lending company i.e. M/s Element
Investment (P) Ltd. The expression 'shareholder' referred to in sec. 2(22)(e) refers
to both a registered shareholder and beneficial shareholder. In the case before us,
Shru Raju Shete and Smt. Hemal Shete are the registered shareholders as well as
the beneficial shareholders. Hence, the provisions of sec. 2(22)(e) of the Act are
applicable in this case. Thus, this ground of appeal raised by the assessee is
dismissed.''
Thus, it will seen that the Hon'ble Tribunal distinguished the case of Bhaumik
Colour (P) Ltd. (cited supra) and held that as that as the share holders were common in
both the companies and they were registered as well as beneficial shareholders, therefore,
the provisions of sec. 2(22)(e) were applicable. As regards the case of CIT Vs. Hilltop
(cited supra) it is not a case of jurisdictional High Court.
C.I.T. Andhra Pradesh vs C. P. Sarathy Mudaliar on 12 October, 1971
26. The condition under the Income Tax Act, 1961 regarding the payee being a shareholder
remains the same as it was under the Income-tax Act, 1922 and the condition that such
shareholder should be beneficial owner of the shares and the percentage of voting power that
such shareholder should hold has been prescribed as an additional condition under the present
law. In the Act, the word "shareholder" is followed by the expression "being a person who is the
beneficial owner of shares". This expression used in section 2(22)(e) both in the Act, and in the
amended provisions with effect from 1st April, 1988 only qualifies the word "shareholder" and
does not in any way alter the position that the shareholder has to be a registered shareholder.
Therefore, decisions of the apex Court in the case of CIT Vs. Sarathy Mudaliar (supra) and that
of Rameshwarlal Sanwarmal Vs. CIT (Supra) interpreting the term "shareholder" under the
Income-tax Act, 1922, in our opinion, is equally applicable to section 2(22)(e) as is in existence
today. This also does not reduce the requirement of being a registered shareholder to a
requirement of merely holding a beneficial interest in the shares without being a registered
holder of shares. The expression "being a person who is the beneficial owner of shares" is
therefore a further requirement before a shareholder can be said to fall within the parameters of
section 2(22)(e) of the Act. In the Act, section 2(22)(e) imposes a further condition that the
shareholder has also to be beneficial owner of shares (not being shares entitled to a fixed rate of
dividend whether with or without a right to participate in profits) holding not less than ten per
cent of the voting power.
Rameshwarlal Sanwarmal vs Commissioner Of Income-Tax on 10 May, 1965
26. The condition under the Income Tax Act, 1961 regarding the payee being a shareholder
remains the same as it was under the Income-tax Act, 1922 and the condition that such
shareholder should be beneficial owner of the shares and the percentage of voting power that
such shareholder should hold has been prescribed as an additional condition under the present
law. In the Act, the word "shareholder" is followed by the expression "being a person who is the
beneficial owner of shares". This expression used in section 2(22)(e) both in the Act, and in the
amended provisions with effect from 1st April, 1988 only qualifies the word "shareholder" and
does not in any way alter the position that the shareholder has to be a registered shareholder.
Therefore, decisions of the apex Court in the case of CIT Vs. Sarathy Mudaliar (supra) and that
of Rameshwarlal Sanwarmal Vs. CIT (Supra) interpreting the term "shareholder" under the
Income-tax Act, 1922, in our opinion, is equally applicable to section 2(22)(e) as is in existence
today. This also does not reduce the requirement of being a registered shareholder to a
requirement of merely holding a beneficial interest in the shares without being a registered
holder of shares. The expression "being a person who is the beneficial owner of shares" is
therefore a further requirement before a shareholder can be said to fall within the parameters of
section 2(22)(e) of the Act. In the Act, section 2(22)(e) imposes a further condition that the
shareholder has also to be beneficial owner of shares (not being shares entitled to a fixed rate of
dividend whether with or without a right to participate in profits) holding not less than ten per
cent of the voting power.