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TMI Blog2017 (5) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. - ITA No. 4080/Del/2011 - - - Dated:- 21-4-2017 - Shri S. V. Mehrotra, Accountant Member And Shri K. N. Charry, Judicial Member Assessee by Sh. Sandeep Singla, CA Revenue by Sh. S.K. Jain, DR ORDER Per K. Narsimha Charry, J.M. This is an appeal by the assessee challenging the order dated 29.06.2011 in appeal no. 156/2008-09 by the Commissioner of Income Tax (Appeals)-XXII, New Delhi. 2. Briefly stated facts are that the assessee is a firm deriving its income from Management Consultancy Services. One Smt. Neeta Mohla is a partner of the assessee firm with 50% share therein and one Shri Deepak Mohla is having the other 50% of the same. Those two persons are equal shareholders in one M/s TMI Associates (P) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e equal shareholders in TMI Associates P. Ltd. Only the persons are common in both the entities but the assessee firm is admittedly not a shareholder of the TMI Associates P. Ltd. On the aspect of the taxability of the loan obtained by the assessee firm from the Private Limited Company, in the hands of the assessee firm, the ratio laid down in ASSISTANT COMMISSIONER OF INCOME TAX vs. BHAUMIK COLOUR (P) LTD.118 ITD 0001 is applicable on all force. It is held in the said decision as follows: Deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder. The provisions of s. 2(22)(e) do not spell out as to whether the income has to be taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bringing in the amendment to s. 2(22)(e) by the Finance Act, 1987, w.e.f 1st April, 1988 is to ensure that persons who control the affairs of a company as well as that of a firm can have the payment made to a concern from the company and the person who can control the affairs of the concern can draw the same from the concern instead of the company directly making payment to the shareholder as dividend. The source of power to control the affairs of the company and the concern is the basis on which these provisions have been made. It is therefore proper to construe those provisions as contemplating a charge to tax in the hands of the shareholder and not in the hands of a non-shareholder viz., concern. A loan or advance received by a concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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