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2020 (8) TMI 821 - AT - Income TaxRectification of mistake - Deemed dividend u/s 2(22)(e) - assessee company had taken a loan from another company - decision of Hon'ble Supreme Court was also not considered by the Tribunal while passing the order - HELD THAT - We notice that the Tribunal has not examined applicability of the binding decision of Hon'ble jurisdictional High Court rendered in the case of Sarva Equity Pvt. Ltd 2014 (4) TMI 788 - KARNATAKA HIGH COURT and also did not consider decision rendered by Hon'ble Supreme Court in the case of Madhur Housing and Development Co. 2017 (10) TMI 1279 - SUPREME COURT . Hence non-consideration of both the above decisions would result in a mistake apparent from record as held by Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT . The learned Authorised Representative has also pointed out that the Tribunal has misquoted the share holding pattern of the assessee company by observing that 2% of shares were held by M/s. Shree Hanuman Jute Mills Private Limited which is also a mistake apparent from record. We are of the opinion that there is merit in the petition filed by the assessee. Since the mistakes goes to the root of the matter, we are of the view that impugned order passed by the Tribunal deserves to be recalled. Misc. Petition filed by the assessee is allowed.
Issues:
Taxability of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961; Mistakes apparent from the record in the order passed by the Tribunal; Consideration of relevant legal decisions by the Tribunal. Analysis: The judgment pertains to a Misc. Petition filed by the assessee, pointing out mistakes in the order passed by the Tribunal regarding the taxability of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. The Tribunal had assessed a loan received by the assessee as deemed dividend, despite the assessee not being a shareholder in the lending company. The petitioner argued that the Tribunal's observation regarding shareholding patterns was factually incorrect, as the lending company's shares were not held by the assessee. The petitioner also highlighted that a common shareholder existed between the assessee and the lending company, challenging the assessment of the loan as deemed dividend. The Tribunal had relied on a previous decision by the Supreme Court, which the petitioner contended was not applicable to the current case due to differing facts. The petitioner further argued that the Tribunal failed to consider relevant decisions by the jurisdictional High Court and the Supreme Court, which constituted a mistake apparent from the record. Specifically, the petitioner referenced decisions by the Karnataka High Court and the Supreme Court that were not addressed in the Tribunal's order. The petitioner emphasized that the Tribunal's reliance on a previous Supreme Court decision was misplaced, as a more recent decision by the Supreme Court supported the petitioner's position. The Tribunal's misquoting of the shareholding pattern of the assessee company was also highlighted as a mistake apparent from the record. Upon hearing the contentions of both parties, the Tribunal acknowledged the merit in the petitioner's arguments. It was noted that the Tribunal had not adequately considered the applicability of relevant legal decisions by the jurisdictional High Court and the Supreme Court. The Tribunal recognized that the mistakes in the order were fundamental and decided to recall the order dated 12.06.2018. Consequently, the Tribunal allowed the Misc. Petition filed by the assessee, directing the Registry to post the appeal in the regular course. The order was pronounced in the open court on 27th Jan., 2020.
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