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TMI Blog2013 (5) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the extent impugned in the grounds enumerated below: 1. The order of the CIT(A) is opposed to law and facts of the case. 2. (a) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing assessee's appeal inspite of the fact that shareholders having majority holding were common with the binding companies and hence provision u/s. 2(22)(e) was squarely application in assessee's case. (b) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing assessee's own case in the A.Y. 2006-07 following M/s Bhaumik Colours Pvt. Ltd. The department did not accept the judgment however, did not contest before the Hon'ble High Court on account of low tax effect." 2. The brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal, the learned CIT(A) found that similar issue was involved in the assessee's own case for A.Y. 2006-07 and the Tribunal vide its order dated 08.04.2011 in ITA No. 2579/Mum/2010 deleted the additions for that relevant year. The learned CIT(A) following the said decision of the Tribunal in the assessee's own case, deleted the addition so made by the AO relevant to the year under consideration. 3. We have heard the learned representatives of the parties and have gone through the record. The learned co-ordinate Bench of the Tribunal vide order dated 08.04.2011 in the assessee's own case for A.Y 2006-07 in ITA No. 2579/Mum/2010 has held as under:- 4. "We have heard the Ld. D.R. None was present for the assessee. We have perused the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance to a non-shareholder cannot be taxed as deemed dividend in the hands of the non-shareholder. 45. The basic characteristic of dividend as held by the apex court in the case of Kantilal Manilal v. CIT [1961] 41 ITR 275 is a share of profits of the company given to its payment of dividend to any person other than the registered shareholder. If one were to breakup the natural meaning the following components emerge (a) dividend is a share of profits of the company (b) paid to its shareholders. Section 2(22) of the Act artificially extends the scope of dividend from being more than only a distribution of profits to cover certain other types disbursements such as loans paid, etc. (the first ingredient mentioned above). It does not however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a dividend. Clause (e) of Section 2(22) includes a payment made by the company in which the public is not substantially interested by way of an advance or loan to a shareholder or to any concern to which such shareholder is a member or partner, subject to the fulfillment of the requirements which are spelt out in the provision. Similarly, a payment made by a company on behalf, of for the individual benefit, of any such shareholder is treated by clause (e) to be included in the expression 'dividend'. Consequently, the effect of clause (e) of Section 2(22) is to broaden the ambit of the expression 'dividend' by including certain payments which the company has made by way of a loan or advance or payments made on behalf of or for the individu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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