Narmina Trade Finvest P.Ltd, Mumbai vs Department Of Income Tax
- CitationITA No. : 6483/Mum/2013
Ratio decidendi
The rule this decision rests on
Where a loan is received by an assessee company that is not a registered shareholder of the lending company, the loan cannot be treated as a deemed dividend under section 2(22)(e) of the Income Tax Act, 1961, following the Special Bench decision in ACIT v. Bhaumik Colour Pvt Ltd, 27 SOT 270, and the Tribunal's own decision for the assessee in the preceding year, there being no distinguishing decision brought to its notice. Where the addition under section 2(22)(e) is deleted on the merits, the question of the validity of reassessment under section 147 becomes academic and need not be decided.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1 M/s Narmina Trade Finvest Pvt Ltd ITA 6483/M/2013
आयकर अपीलीय अिधकरण "बी" यायपीठ मुब ं ई म। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "B", MUMBAI ी िवजय पाल राव, याियक सद य एवं ी एन. के . िबलै या, लेखा सद य के सम । BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N K BILLAIYA, ACCOUNTANT MEMBER
ITA No. : 6483/Mum/2013 (Assessment year: 2006-07) Income Tax Officer-8(2)(3), Vs M/s Narmina Trade Finvest Pvt Room No. 213/216A, 2nd Floor, Ltd, Aayakar Bhavan, M K Road, Plot No. 123, Road No. 17, Mumbai -400 020 MIDC, Marol, Andheri (East), Mumbai -400 020 थयी लेखा सं.:PAN: AABCN 2574 L अपीलाथ (Appellant) यथ (Respondent) Appellant by : Shri N Padmanaban Respondent by : Shri Dhirendra M Shah
सुनवाई क तारीख /Date of Hearing : 24-03-2015 घोषणा क तारीख /Date of Pronouncement : 24-03-2015
आदेश ORDER ी एन. के . िबलै या, लेस: PER N K BILLAIYA, AM:
This is an appeal filed by the revenue against the order of the CIT(A)-17, Mumbai dated 28.08.2013 pertaining to assessment year 2006-07.
2. Grievance of the revenue is twofold, firstly, the revenue is aggrieved by the decision of the CIT(A) who held that the reassessment done by the AO u/s 147 of the Act is invalid and secondly, on merits of the case, the CIT(A) erred in deleting the addition of Rs. 10.80 lakhs on account of loan received by the assessee from M/s Arco Electro Technologies P Ltd.
3. Let us proceed with the merits of the case. The issue is whether the loan received by the assessee company can be taxed 2 M/s Narmina Trade Finvest Pvt Ltd ITA 6483/M/2013 as deemed dividend u/s 2(22)(e) of the Act when the assessee company is not a registered shareholder of the payer company.
4. We find that the first appellate authority has deleted the addition following the ratio laid down by the Special Bench decision of the Mumbai Tribunal in the case of ACIT vs Bhaumik Colour Pvt Ltd, 27 SOT 270. We find on identical facts, the Tribunal has deleted the addition in ITA No. 8224/Mum/2010 for AY 2007-08 in the case of the assessee itself.
5. As no distinguishing decision has been brought to our notice, respectfully following the decision of the Co-ordinate Bench (supra) the appeal filed by the revenue on merits is dismissed as we have confirmed the deletion of addition made u/s 2(22)(e) of the Act, the question of validity of the reopening of assessment becomes academic.
6. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 24th March, 2015.
Sd/- Sd/- (िवजय पाल राव) (एन. के . िबलै या) याईक सद य लेखा सद य (VIJAY PAL RAO) (N K BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Date: 24th March, 2015
त/Copy to:-
1) अपीलाथ /The Appellant. 2) यथ /The Respondent. 3) The CIT(A) -17, Mumbai. 4) The CIT-8, Mumbai.
5) िवभागीय ितिनिध "बी", आयकर अपीलीय अिधकरण, मुंबई/ The D.R. "B" Bench, Mumbai.
6) गाड फाईल Copy to Guard File.
3 M/s Narmina Trade Finvest Pvt Ltd ITA 6483/M/2013 आदे शानस ु ार/By Order / / True Copy / /
उप/सहायक पंजीकार आयकर अपील य अ धकरण, मब ुं ई Dy./Asstt. Registrar I.T.A.T., Mumbai
*च हान व.िन.स *Chavan, Sr.PS
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