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TMI Blog2015 (6) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... uch concern may be maintained to which provisions of section 2(22)(e) of the Act apply. Under the factual matrix of the present case, we observe that when the loans/advances have been given to a non shareholder, then it is impossible for a payer company to ascertain whether it will attract the provisions of section 2(22)(e) of the Act or not. - provisions of section 2(22)(e) and 194 of the Act do not require the payer assessee company to deduct TDS u/s 194 of the Act. - Decided in favour of assesse. - I.T.A.No.5766/Del/2012 - - - Dated:- 23-3-2015 - Shri S.V. Mehrotra And Shri Chandra Mohan Garg JJ. For the Appellant : Shri T. Vasanthan, Sr. DR For the Respondent : S/Shri V.K. Jain, CA Nem Singh, Adv. ORDER P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued to the assessee calling for information related to the provisions of TDS compliance. The main contention of the AO was that the assessee company which is providing loans and advances having shareholding of 20%, 50% and 27% in All India Consortium Pvt. Ltd., G.S. Developers, Aims Max Gardenia Developers respectively, then the assessee s case is squarely covered under the provisions of deemed dividend as per section 2(22)(e) of the Act and the assessee company should have deducted TDS u/s 194 of the Act which also covers deemed dividend. With these observations, the AO computed the liability of the assessee company under provisions of TDS compliance u/s 201(1)/201(1A) of the Act totalling to ₹ 78,30,223. 4. Being aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AR's argument was that when there is loan and advances between company and company/firm(s), the supporting case laws/decisions of Rajasthan High Court in the case of CIT v. Hotel Hill Top 313 ITR 116, High Court of Delhi in the case of CIT v. Gopal Clothing Company P.Ltd. in ITA No.333/2006 dated 22-03-2012 and CIT vs. Ankitech Private Limited (2011)242 CTR 129(Delhi) stands in favour of the appellant that is there is no deemed dividend in the hands of individual shareholders like Sh.Manoj Kumar Ray and Sh.Sanjeev Sharma, as the money is not passed on to them directly. The AO(TDS) may go through the case of Mumbai ITAT (SB) in the case of Bhowmik Colors (P)Ltd. Vs ACIT, 313 ITR 146 (DOJ=19-11-2008), where detailed analysis on who wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the Party Opening Balance Payment made during the year Received back during the year Closing Balance as on 31.03.2010 Aims Max Gardenia Developers - 6,20,00,000 2,00,00,000 4,20,00,000 G. S. developers 4,20,88,363 67,86,375 1,13,55,365 3,75,19,373 All India Developers Consortium Pvt Ltd 25,88,000 - - 25,88,000 8. Ld. DR pointed out para (d) at page 4 of the assessment order and submitted that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in the assessee company out of which Mr. Manoj Kumar Ray and Sanjeev Sharma hold 49.79% of shareholding in the assessee company. We are unable to see the names of the three alleged companies and the list of shareholders of the assessee company to whom the impugned loan/advance was given by the assessee company. 11. As per scheme of statutory provisions of the Act, the payment or advances to non shareholders does not require TDS u/s 194 of the Act and the appellant company cannot be held to be a defaulter u/s 201 of the Act so as to attract interest u/s 201(1A) of the Act. It is also pertinent to note that under provisions of Companies Act, every company is expected to maintain a Register of shareholders u/s 150 of the Companies Act 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the conclusion of the CIT(A) that the assessee company has given loans/advances to above named three companies/entities mentioned in the table as reproduced hereinabove and the provisions of deemed dividend cannot be applied in the hands of Shri Manoj Kumar Ray and Shri Sanjeev Sharma as they are not getting any direct or indirect benefit from these loans and advances. At the cost of repetition, we further point out that section 2(22)(e) of the Act stipulates that the payment of dividend should be made to an individual shareholder having minimum 10% shareholding or to a concern or company etc. in which such shareholding is minimum 20% and in the present case, the requirement of this provision does not comply with the facts as narrate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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