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TMI Blog2014 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... y payment made for his individual benefit - it is deemed that the Company did spent ₹ 2.51 crores towards repair and renovation on the premises owned by the Respondent - the Company had taken rent on the premises - the asset of the Respondent may have enhanced in value by virtue of repairs and renovation in respect of which it cannot be brought within definition of the advance or loan to the Respondent - Nor can it be treated as payment by the Company on behalf of the Respondent share holder or for the individual benefit of such shareholder – the order of the Tribunal is upheld – Decided against Revenue. - Income Tax Appeal No. 496 of 2012 - - - Dated:- 1-9-2014 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Appellant : M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he propriety concern and he let out the premises to the Company. The Company incurred expenses towards construction and improvement of the factory premises which it continued to use. The Appellant contended that such improvement in the factory premises was for benefit of the Respondent and therefore applied provisions of section 2 (22)(e) for total expenditure of ₹ 2.51 crores. Vide the assessment order dated 2.2.2009 the Appellant treated the sum of ₹ 2.51 crores as deemed divided in the name of assessee, under the provisions of section 2(22)(e). 4. The Respondent filed an appeal before the Commissioner the Income Tax (Appeals), who vide order dated 10.11.2009 dismissed the appeal of the Respondent. The Respondent, aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distribution made in accordance with subclause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allotted to its equity shareholders after the 31st day of March, 1964, [and before the 1st day of April, 1965] (ii) any advance or loan made to a shareholder [or the said concern] by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company ; (iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so set off; (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was lower than the prevailing market rate with a clear understanding that all expenditure for its upkeep and improvement, if any, would be fully spent by the Company since the Appellant had stopped his own business activities. According to the CIT (Appeals) the Respondent failed to substantiate the said claim and held that all conditions provided under section 2(22)(e) for deemed dividend was satisfied. In appeal, the tribunal concluded that the payment was not deemed dividend. The tribunal also held that the amount was also not perquisite and accordingly the Appellant's case under section 17(2) is also not sustainable. 8. In the present appeal, the challenge is restricted to the tribunal's findings that the Respondent's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is not warranted in the facts of the present case. Accordingly, the order of the tribunal cannot be faulted. 11. The challenge being restricted to the issue of dividend alone it is not necessary to consider the contention pertaining that the amount as perquisite. Moreover, in the case of Income Tax Appeal No.114 of 2012 and other group of appeals this court has vide the judgment dated July 4, 2014 to which one of us (S.C. Dharmadhikari, J.) was a party has already held that where the recipient is not the share holder of the lender Company such case of a deemed dividend does not arise and such appeals are to stand dismissed since they do not raise any substantial question of law. We have, however, considered the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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