Means Infrastructure (I) P. Ltd, Mumbai vs Department Of Income Tax

ी डी. म मोहन, उपा य एवं ी संजय अरोड़ा, लेखा के सम ।

BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM

आयकर अपील सं./I.T.A. No. 3059/Mum/2013 ( नधारण वष / Assessment Year: 2008-09) Income Tax Officer-6(3)-3, Means Infrastructure (India) P. Ltd. Room No. 524, Aayakar Bhavan, बनाम/ 311, Gokul, 80/A, Baroda Street, th 5 Floor, M. K. Marg, Vs. Carnac Bunder, Mumbai-400 009 Mumbai-400 020 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAACM 9740 J (अपीलाथ /Appellant) : ( यथ / Respondent)

अपीलाथ क ओर से / Appellant by : Shri Love Kumar यथ क ओर से/Respondent by : None

सुनवाई क तार ख / : 03.02.2015 Date of Hearing घोषणा क तार ख / : 10.04.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Arora, A. M.:

This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-12, Mumbai ('CIT(A)' for short) dated 24.01.2013, allowing the Assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for assessment year (A.Y.) 2008-09 vide order dated 14.12.2010.

2. None appeared for and on behalf of the assessee-respondent when the appeal was called out for hearing, nor any adjournment application stands received. The notice for the hearing was conveyed through RPAD, and which has been received back unserved, with the postal remarks 'Not Known', even as the same bears the correct address, i.e., as stated by the assessee in Form No.36 as well as in the impugned order. Even no power of attorney or letter of authority stands filed. Under the circumstances, it was only 2 ITA No. 3059/Mum/2013 (A.Y. 2008-09) ITO vs. Means Infrastructure (India) P. Ltd.

considered fit and proper to proceed with the matter, deciding the appeal after hearing the party before us.

3. The appeal raises a single issue, i.e., the maintainability or otherwise in law of the deeming of the two loans, aggregating to Rs.58,34,274/-, received by the assessee- company during the relevant year, as dividend u/s. 2(22)(e) of the Act.

4. The brief facts of the case are that the assessee, a company incorporated under the Companies Act, 1956, was observed during the course of assessment proceedings by the Assessing Officer (A.O.) to have received loans from two private limited companies, as under, which had the same shareholding as the assessee-company, i.e., 50% of the voting power vesting in two individuals, namely, Padmakash B. Shukla and Rajendra Kumar J. Jain:

From Loan Amt (Rs.) M/s. Sea Bird Surveys Pvt. Ltd. Rs.25,00,000/- M/s. Marine Electronics and Navigation Systems Pvt. Ltd. Rs.33,34,274/-

The provision of section 2(22)(e), therefore, in his view, clearly applied to the assessee's case. The ld. CIT(A), in appeal, however, deleted the addition by relying on the decision in the case of, among others, CIT vs. H. K. Mittal [1996] 219 ITR 420 (All) and CIT vs. Bhaumik Color P. Ltd. [2009] 118 ITD 1 (Mum) (SB). Aggrieved, the Revenue is in appeal.

5. We have the party before us, and perused the material on record.

Before us, it was at the very outset observed that the assessee had pleaded its case before the Revenue with reference to the decision by the special bench of this tribunal in Bhaumik Color P. Ltd. (supra), and which has since been approved by the hon'ble jurisdictional high court in CIT vs. Universal Medicare Pvt. Ltd. [2010] 324 ITR 263 (Bom). Accordingly, no case for deeming the impugned loans as dividend u/s. 2(22)(e) of the Act would arise in the facts and circumstances of the case. The ld. Departmental Representative (DR), on being questioned in the matter, could not rebut the fact that the assessee-company is not a shareholder, registered or beneficiary, in the two lonee-

3 ITA No. 3059/Mum/2013 (A.Y. 2008-09) ITO vs. Means Infrastructure (India) P. Ltd.

companies; the share holding of both the payer and the payee company being in fact listed in the assessment order itself. In terms of the decision in Universal Medicare Pvt. Ltd., even otherwise binding on us, no dividend u/s.2(22)(e) could be assessed in the hands of the person other than the share-holder of the lonee-company, who is in view of the relationship therewith, considered as having distributed its accumulated profit in the garb or form of a loan. It thereby approved the decision by the special bench of the tribunal in Bhaumik Color P. Ltd. (supra), and is also in conformity with the decision in the case of H. K. Mittal (supra). Respectfully following the same, we hold that the impugned loans cannot be deemed as dividend u/s.2(22)(e) of the Act. We decide accordingly.

7. In the result, the Revenue's appeal is dismissed प रणामतः राज व क अपील खा रज क जाती है ।

Order pronounced in the open court on April 10, 2015

Sd/- Sd/-

(D. Manmohan) (Sanjay Arora) उपा य / Vice President लेखा सद य / Accountant Member मंब ु ई Mumbai; दनांक Dated : 10.04.2015 व. न.स./Roshani, Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent

3. आयकर आयु त(अपील) / The CIT(A)

4. आयकर आयु त / CIT - concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड फाईल / Guard File आदे शानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai