9911796707
TMI Blog2014 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the Respondent and let out by the Respondent to a limited Company of which the Respondent was a majority share holder. 2. The question of law raised by the Respondent is whether the tribunal had erred in directing/concluding that the provisions of section 2(22)(e) were not attracted in the case of the Respondent in view of the Appellant's contention that the expenditure made by the private limited Company of the Respondent in which the Respondent - assessee is a majority share holder and that the expenditure in fact was made for benefit of the Respondent - assessee himself. 3. A few facts may be adverted to : The Respondent - assessee holds 76.26% of equity shares of Offshore Hookup and Construction Services Pvt. Ltd. ("the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m (whether as representing a part of the assets of the Company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such Company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the Company in either case possesses accumulated profits; but "dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 itself prior to dealing with the impugned order. The Assessing Officer holds that the amount of Rs. 2.51 crores was paid on behalf of the assessee and relied upon inter alia on a decision of the Calcutta High Court in the case of Mr.M.D. Jindal Vs. CIT 164 ITR 28. It states that any payment referred to in section 2(22)(e) also covers value of goods and services provided by the Company to its share holders. Alternatively, the Assessing Officer held that the amount of Rs. 2.51 crores be treated as a perquisite which includes value of any benefit by Company to the employee who is the Director thereof and/or by Company, who has substantial interest in it. Thus, the case against the Respondent was two fold, one that amount of Rs. 2.51 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit. The payment should be for the individual benefit of such share holder and it would be restricted to accumulated profits of the Company. 9. In the present case, no money has been paid to the Respondent by way of advance or loan nor was any payment made for his individual benefit. The fact that the Company has spent money has not been called into question. Thus, it is deemed that the Company did spent Rs. 2.51 crores towards repair and renovation on the premises owned by the Respondent. There is no dispute about the fact that the Company had taken rent on the aforesaid premises. Thus, it is case where the asset of the Respondent may have enhanced in value by virtue of repairs and renovation in respect of which it cannot be brought with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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