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TMI Blog2013 (11) TMI 1676X X X X Extracts X X X X X X X X Extracts X X X X ..... me are disposed off by this common order. 2. The first common issue in all the appeals, cross appeals and the cross objections relates to the decision of the Ld.CIT(A) on the addition of deemed dividend u/s 2(22)(e) of the Income Tax Act made in the assessment. The relevant facts are that one Shri Sunil P. Mantri, an individual was a shareholder holding shares of 85.50% in M/S Sunil Mantri Reality Ltd, which made advances/loans to various concerns in which Shri Sunil P. Mantri was holding shares. The details of the share holding pattern of Shri Sunil P. Mantri in various concerns to which M/S Sunil Mantri Reality Ltd made the advances/loans during the years under consideration and the respective amounts are as below:- Sl No. Concerns to which loans/advances made Shareholding pattern of Sunil P. Mantri A.Y. 2008-09 A.Y. 2009-10 1 M/s. Mantri Power Ltd. 49.95% Rs. 60,22,308/- Rs. 1,28,07,500/- 2 M/s. Sunil Mantri Buildtech P. Ltd. 50% Rs. 3,87,38,299/- - 3 M/s. Sunil Mantri Trinity Projects P. Ltd. 50% Rs. 21,15,00,000/- - 4 M/s. Mantri Lifestyle Developers P. Ltd. 50% Rs.1,35,609/- - 5 M/s. Mantri Properties P. Ltd. 50% - Rs.37,31,757/- 6 M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the value of accumulated profit of the lender concern for the purpose of restricting the additions made u/s 2(22)(e). In addition, the revenue has also agitated the action of the Ld.CIT(A) in deleting the additions made by the AO in respect of loan/advance received by Sunil Mantri Trinity Projects P. Ltd for the A.Y 2008-09 and the sums repaid by the recipient concerns to the lender company for the A.Y 2009-10. 4.2 In other four appeals filed by the revenue, the Department has challenged the action of the Ld.CIT(A) deleting the addition made on protective basis in the hands of the recipient concerns. The four cross objections filed by the assesses/recipient concerns arising out of the said four appeals of the revenue relate to the claim of the assessees that the concerns have received deposits from Sunil Mantri Reality Ltd. in the normal course of business and a further claim that refund of loan earlier paid by the assessees does not pertain to the loans received during the year. The adjudication of the issues raised in the 12 bunches of appeals, cross appeals and the cross objections are discussed in the succeeding paragraphs. 5. Firstly, as regards the addition made on su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said 3 group concerns. Thus, merely because the assessee, Sunil P. Mantri has not received any sum directly from the lender concern M/s Sunil Mantri Realty Ltd. or through above said 3 group concerns, it cannot be said that assessee has not received any benefits from the transactions. The argument of the assessee that the loans/advances have been made in the normal course of business is also not acceptable as the assessee has not brought on record to prove the same. It is also not disputed that the lender concern, M/s Sunil Mantri Reality Ltd is not engaged in the business of money lending. The contention of the assessee that the MoU dated 15th May, 2007 evidences payments of advances towards awarding of preferential contract to lender concern of any new project that may arise in future by the recipient concerns, in our view, is hypothetical in nature which lacks any evidentiary value as the MoU pertains to future projects, if any which does not quantify any amounts of consideration. Also, it has not been proved that the MoU has resulted in any such project or the parties have acted in furtherance of the MoU. In view of the aforementioned discussions, we are of the considered opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find any infirmity in the decision of the Ld.CIT(A) on this count. 5.1.4 Fifthly, another common issue raised in the appeals of the assessee, Sunil P. Mantri and the respective cross appeals of the Revenue relates to the disallowance/addition on account of notional interest in respect of the property located at Ambey Valley, Lonawala and the allowability of interest expenses respectively. It is observed that the AO estimated the gross annual value @ 7% of the cost of acquisition and after allowing 30% standard deduction u/s 24(a), the AO determined the income from house property. The same has been confirmed by the Ld.CIT(A). Having heard both the sides and perused the material on record on this issue, it is pertinent to note that when the assessee claims for a lower ALV, the assessee is duty bound to file municipal valuation to substantiate his claim of lower value, which he has not discharged during the assessment/appellate proceedings. Accordingly, we do not find any merit in the contention of the Ld.AR that the estimation of gross annual value ought to have been made as per the rent fixed by the municipal authority. In view of that matter, we do not find any justifiable reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loans or advance would ultimately be made available to the share-holder of the concern giving the loans or advances. The intention of the legislature is therefore to tax dividend only in the hands of the share-holder and not in the hands the concern. The said proposition is supported by the decision of the Bombay High Court in the case of CIT Vs. Universal Medicare P. Ltd. reported in 324 (ITR) 263 (Bom). Accordingly, the decision of the Ld. CIT(A) in deleting the additions made by the AO on protective basis in the hands of the recipient concerns are upheld. 7. Regarding the four cross objections filed by the recipient concerns arising out of the four appeals of the Revenue, the same become infructuous as the decision of the Ld.CIT(A) in deleting the addition made on protective basis in the hands of the four concerns are upheld. 8. In the result, (i) the appeals filed by the assessee, Sunil P.Mantri (ITA No. 5402/M/2011 & ITA No. 5407/M/2011) are partly allowed. (ii) the cross appeals filed by the Revenue in the cases of Sunil P Mantri Ltd (ITA No. 5702/M/2011 & 5703/M/2011) are dismissed. (iii) the other four appeals filed by the Revenue (ITA No. 5689/M/2011, ITA No. 568 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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