Dimple Impex (India) Pvt. Ltd., New ... vs Department Of Income Tax

ITO, Vs. Dimple Impex (India) Pvt. Ltd., Ward-10(3), B-56, Okhla Industrial Area, New Delhi. Phase-I, New Delhi.

PAN: AAACD3526F

(Appellant) (Respondent)

Assessee By : None Department By : Shri Amrit Lal, JCIT

Date of Hearing : 16.06.2015 Date of Pronouncement : 16.06.2015

ORDER

This appeal by the Revenue arises out of the order passed by the

CIT (A) on 02.12.2013 in relation to the assessment year 2010-11. ITA No.538/Del/2014

2. The only issue raised in this appeal is against the deletion of

addition of Rs.19,38,168/- made by the AO u/s 2(22)(e) of the Income-

tax Act, 1961 (hereinafter also called 'the Act').

3. Briefly stated, the facts of the case are that the assessee is

engaged in fabrication of home furnishing. During the year under

consideration, the assessee carried out job work for M/s Estocorp Ind.

Pvt. Ltd., a sister concern having common shareholders viz., Shri Sajid

Dehlvi (55% in the assessee company and 51.6% in Estocorp Ind. Pvt.

Ltd.) and Ms Chandan Aggarwal (45% in the assessee company and

48.4% in Estocorp Ind. Pvt. Ltd.). On a perusal of the ledger account,

the AO observed that there was an opening credit balance in the account

of Estocorp Ind. Pvt. Ltd. amounting to Rs.46.37 lac and during the year

the assessee carried out job work worth Rs.56.83 lac, against which a

sum of Rs.29.84 lac was received. It was noticed that there was a

closing credit balance of Rs.19.38 lac (Rs.46.37 lac + Rs.29.84 lac -

Rs.56.83 lac). Invoking the provisions of section 2(22)(e) of the Act, the

2 ITA No.538/Del/2014

AO treated the said sum of Rs.19,38,168/- as deemed dividend u/s

2(22)(e) of the Act. The ld. CIT(A) deleted the addition.

4. I have heard the ld. DR and perused the relevant material available

on record. There is no appearance from the side of the assessee despite

notice. As such, I am proceeding to dispose of this appeal ex parte qua

the assessee. I find that the assessee came into possession of an advance

of Rs.19.38 lac from Estocorp Ind. Ltd., and, admittedly, this company

is not a shareholder in the assessee company. The AO has himself

noticed in the assessment order that Shri Sajid Dehlvi and Ms Chandan

Aggarwal are common shareholders in both the assessee as well as

Estocorp Ind. Pvt. Ltd. The Hon'ble jurisdictional High Court in the

case of CIT vs Ankitech (P) Ltd., & Others (2012) 340 ITR 14 (Del) has

held that the provisions of section 2(22)(e) cannot be invoked unless the

concern lending loan or advance is a shareholder in the borrower

company. The facts and circumstances of the instant case are, mutatis

mutandis, similar to that of the Hon'ble jurisdictional High Court.

Similar view has been taken by the Special Bench of the Tribunal in

3 ITA No.538/Del/2014

ACIT vs. Bhaumik Colour Pvt. Ltd. (2009) 27 SOT 270 (Mum) (SB). In

view of the direct judgment of the Hon'ble jurisdictional High Court on

the point, I find no reason to differ with the view taken by the ld. CIT(A)

on this issue.

5. In the result, the appeal is dismissed.

The order pronounced in the open court on 16.06.2015.

Sd/-

[R.S. SYAL] ACCOUNTANT MEMBER Dated, 16th June, 2015.

dk Copy forwarded to:

1. Appellant

2. Respondent

3. CIT

4. CIT (A)

5. DR, ITAT

AR, ITAT, NEW DELHI.

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