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TMI Blog2015 (6) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend income at the hands of the share holders and tax them accordingly. As otherwise it would amount to escapement of income at the hands of those shareholders. - Decided in favour of assessee with observations in above para. - ITA No. 399/Mum/2013 - - - Dated:- 14-10-2014 - SHRI I.P. BANSAL, AND SHRI R.C. SHARMA, JJ For The appellant : Shri Satish Chandak. For The Respondent : Shri Permanand J ORDER PER I.P. BANSAL, JM: This appeal is filed by the Assessee and it is directed against order the passed by the Ld.CIT(A)-18, Mumbai dated 12.10.2012 of A.Y. 2009-10. 2. Ground of appeal is read as under:- On the facts and in the circumstances of the case and in law, the CIT(A) has erred in confirming the addition made by AO n account of alleged deemed dividend u/s 2(22)(e) of ₹ 4,14,71,946/- despite the decisions of larger bench of ITAT in case of ACIT Vs. Bhaumik Colour Pvt. Ltd. 313 ITR 146 (AT) and Mumbai High Court in case of CIT Vs. Universal Medicare Pvt. Ltd. (324 ITR 263) 3. During the course of assessment proceedings the AO noticed that assessee company had obtained loan of ₹ 7,93,30,000/- from its group company n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company then provisions of section 2(22)(e) cannot be applied. Reference can be made to following observations of their Lordships. We have perused the provision carefully and equally the judgment in the case of Universal Medicare and the view following the same rendered by several High Courts. We are of the opinion that there is no merit in the contentions of the Revenue, that Universal Medicare was either erroneously decided or that the view taken in Universal Medicare requires reconsideration. In that regard, we must not brush aside the binding precedent or the judgment of a co-ordinate bench simply because some of the arguments canvassed before us were either not canvassed or if canvassed were not considered. The binding precedent can be ignored only if it is per-incuriam. Such is not the stand before us. All that is urged is several facets and which emerge from a reading of section2(22)(e) together with its sub-clauses have not been noticed by the Division Bench while deciding Universal's case. We are unable to agree with the Revenue in this behalf. What we have noted is that the legislature has incorporated ans inserted the definition of the term dividend . It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend within the meaning of sub clause (e), to the extent to which it is so set off, is also excluded advisedly. We are also of the opinion that any reference to Explanation 3 and particularly the definition of term concern will not advance or carry the Revenue's case any further. Eventually, it is the shareholder who is registered as such who is entitled to receive the dividend. Merely because the payment is made to him by way of advance or loan was not termed as such earlier that the legislature has inserted such a payment in the definition of the term dividend and made the definition wide and broad so also inclusive. We do not see with this legal position and the status of the shareholder recognized in law can be ignored while interpreting section 2 (22) (e) of the L T. Act. Precisely, this is what has been done by this Court in the judgment rendered in the (~~ of Universal Medicare. It is not necessary for us to make a detailed reference to the order of the Special Bench of the Tribunal in the case of Bhaumik Colour Pvt Ltd. Suffice it to hold that the view taken by this Court in the case of Mzs. Universal Medicare does not require any reconsideration. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shareholders noted in the Supreme Court's decision, cannot change. That legal position and status of the shareholder the same, we do not see how the view prevailing from Commissioner of Income Tax vs. C. P. sarathy(supra) is in way said to be changed. That is how all the judgment thereto have been rendered. The reliance placed by Ms. Vissanjee on the judgment of the' Division Bench of this Court in the case of Commissioner of Income Tax, Patiala v / s Shahzada Nand and Sons and Ors, reported in (1966) 177 ITR 393, is therefore, apposite. Equality, her reliance on the judgment of the Division Bench of Delhi High Court is well placed. We have noted that the Delhi High Court and even after exhaustive amendment to Section the purview of this sub-clause so long as it contemplated shareholders. The Division Bench of Delhi High Court has made detailed reference to all the decisions in the field. It has also referred to the order passed by the Special Bench of the Tribunal in arriving at the same conclusion. In the Commissioner of Income Tax vs Ankitech Pvt Ltd reported in 2012 (340) ITR page 14, the Hon'ble Delhi High Court referred to both Sarathy Mudaliar and Rameshwarl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lender company. The Appeals raising such grounds, therefore, would follow this order and even they would stand dismissed as they do not raise any substantial question of law. (emphasis ours) 5. In this view of the matter, we have heard both the parties and their contentions have carefully considered. The Ld. DR relied upon the order passed by AO and Ld.CIT(A) and Ld. AR relied upon for aforementioned of Hon ble Bombay High Court. 6. After careful consideration, we are of the opinion that in view of the aforementioned decision of Hon ble Bombay High Court, it has to be held that since assessee company is not a share holder of the lender company, the addition in the hands of the assessee is not called for and therefore, is liable to be deleted. Accordingly we delete this addition in the hands of the assessee. 7. However, we have gone through the decision of Hon ble Delhi High Court in the case of CIT Vs. Ankitech Pvt. Ltd. (supra), as this decision of Hon ble Delhi High Court has been concurred with by the Hon ble Bombay High Court. In the case of CIT Vs. Ankitech Pvt. Ltd.(supra) , their Lordships have observed that since the conditions stipulated in section 2(22)(e) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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