ITO 8(2)-3, MUMBAI v. MOONRISE ENGG. (BOM) P. LTD, MUMBAI

ITA 4533/MUM/2009 | 2005-2006
Pronouncement Date: 28-05-2010 | Result: Dismissed

Appeal Details

RSA Number 453319914 RSA 2009
Assessee PAN AADCM2180R
Bench Mumbai
Appeal Number ITA 4533/MUM/2009
Duration Of Justice 9 month(s) 25 day(s)
Appellant ITO 8(2)-3, MUMBAI
Respondent MOONRISE ENGG. (BOM) P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 28-05-2010
Date Of Final Hearing 24-05-2010
Next Hearing Date 24-05-2010
Assessment Year 2005-2006
Appeal Filed On 03-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH MUMBAI BEFORE SHRI R.K. PANDA AM & SMT. ASHA VIJAYARAGHAV AN JM I.T.A. NO. 4533/MUM/2009 (ASSESSMENT YEAR 2005-06) INCOME TAX OFFICER 8(2)-3 ROOM NO. 213 2 ND FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020 VS. M/S. MOONRISE ENGG. (BOM) PVT. LTD. 1 ANUP SUNBEAM CHS JUHU VERSOVA LINKA ROAD ANDHERI (E) MUMBAI-400 053 PAN: AADCM2180R) APPELLANT RESPONDENT APPELLANT BY: MR. S.K. PAHWA RESPONDENT BY: MR. STANY SALDANHA O R D E R DATE OF HEARING: 24.05.2010 DATE OF ORDER: 28.05.2010 PER R.K. PANDA AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER DATED 26 TH MAY 2009 OF THE CIT(A)-VIII MUMBAI RELATING TO A SSESSMENT YEAR 2005-06. 4. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE REA DS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON ON ACCOUNT OF DEEMED DIVIDEND MADE BY THE AO OF RS.1 54 25 000/- RECEIVED FROM LOTUS INVESTMENT PVT . LTD. IN THE CASE OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN OF RS.4 30 50 000 FROM ONE COMPANY I.E. M/S. LOTUS INVESTMENTS LTD. FROM THE BALANCE SHEET OF M /S. LOTUS INVESTMENTS LTD. AS ON 31 ST MARCH 2005 HE NOTED THAT IT HAS RESERVES AND SUR PLUS OF RS. 6 27 00 489. HE ALSO NOTED THE COMMON SHAREHOL DING PATTERN OF THE ASSESSEE COMPANY AS WELL AS THAT OF M/S. LOTUS INVE STMENTS LTD. AS UNDER: I.T.A. NO. 4533/MUM/09 M/S. MOONRISE ENGG. (BOM) P. LTD.. ======================== 2 MOONRISE ENGINEERING BOMBAY P. LTD. LOTUS INVESTMENTS LTD. NAME OF THE SHAREHOLDER NO. OF SHARES % NO. OF SHARES % AMITABH BACHCHAN 1000 25% 465 29% AJITABH BACHCHAN 2000 50% 465 29% PRATAP TRUST - - 670 42% JAYA BACHCHAN 1000 25% - - TOTAL 4000 100% 1600 100% 6. FROM THE ABOVE HE NOTED THAT M/S. LOTUS INVESTMENT S LTD. AND M/S. MOONRISE ENGG. (BOM) PVT. LTD. ARE GROUP COMPA NIES HAVING SUBSTANTIAL COMMON SHAREHOLDING PATTERN AND M/S. LO TUS INVESTMENTS LTD. WAS HAVING SUFFICIENT ACCUMULATED PROFITS. TH E ASSESSING OFFICER THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROVISIONS OF SECTION 2(22)(E) SHALL NOT BE APPLICABLE. NOT BEIN G SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND CONSIDERING T HE FACT THAT OUT OF THE TOTAL AMOUNT OF RS.4 30 50 000 AN AMOUNT OF RS.2 76 25 000 WAS THE OPENING BALANCE AND AN AMOUNT OF RS.1 54 25 000 WAS RECEIVED BY THE ASSESSEE DURING THE YEAR THE ASSESSING OFFICER TRE ATED THE AMOUNT OF RS.1 5425 000 RECEIVED BY THE ASSESSEE DURING THE Y EAR AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. 7. IN APPEAL THE CIT(A) NOTED THAT M/S. LOTUS INVESTM ENTS LTD. IS NOT THE SHAREHOLDER OF THE ASSESSEE COMPANY. RELYING O N THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V S. BHAUMIC COLOUR PVT. LTD. REPORTED IN 27 SOT THE CIT(A) DELETED THE ADDI TION OF RS.1 54 25 000 AS DEEMED DIVIDEND ADDED BY THE ASSESSING OFFICER U /S. 2(22)(E) OF THE ACT. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 8. AFTER HEARING BOTH THE SIDES WE FIND THE CIT(A) HA S GIVEN A FACTUAL FINDING THAT M/S. LOTUS INVESTMENTS LTD. IS NOT A S HAREHOLDER OF THE ASSESSEE COMPANY. THIS FACTUAL FINDING OF THE CIT( A) COULD NOT BE CONTROVERTED BY THE LEARNED DR. THEREFORE THE DEC ISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BHAUMIC COLOUR PVT. LTD. IS SQUARELY I.T.A. NO. 4533/MUM/09 M/S. MOONRISE ENGG. (BOM) P. LTD.. ======================== 3 APPLICABLE TO THE FACTS OF THE PRESENT CASE ACCORDI NG TO WHICH DEEMED DIVIDEND CAN BE ASSESSED ONLY IN THE HANDS OF A PER SON WHO IS A SHAREHOLDER OF THE LENDER COMPANY AND NOT IN THE HA NDS OF A PERSON OTHER THAN A SHAREHOLDER. SINCE THE CIT(A) HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH WHILE DELETING THE ADDITION MADE BY T HE ASSESSING OFFICER U/S 2(22)(E) OF THE ACT THEREFORE IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND ACCORDINGLY UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED ON 28 TH MAY 2010. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI DATED 28 TH MAY 2010 COPY TO: (1) THE APPELLANT (2) THE RESPONDENT (3) THE CIT(A)-VIII MUMBAI (4) THE CIT-VIII MUMBAI (5) THE DR H BENCH ITAT MUMBAI. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI TPRAO