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TMI Blog2018 (8) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11. 2016, pertaining to the Assessment Year 2010-11, which in turn has arisen from the order passed by the Assessing Officer, Mumbai dated 29. 02. 2016 under section 143(3) r. w. s. 147 of the Income Tax Act, 1961 (in short the Act ). http://itatonline. org 2. In this appeal, Revenue has raised the following Grounds of appeal (Revised ground) 1. Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) was right in deleting the addition of ₹ 90 crores as deemed dividend u/s. 2(22)(e) of the I T Act, 1961 2. Whether on the facts and in the circumstances of the case and in Law, the Ld. CIT(A) was right in deleting the addition of ₹ 90 crores as deemed dividend u/s. 2(22)(e) of the I T Act, 1961 considering the subsequent decision of Hon. Supreme Court in the case of Gopal and Sons (HUF) vs CIT Kolkata dated 07. 01. 2017 in Civil Appeal No. 12274 of 2016 wherein it was held that in the light of Explanation 3 to section 2(22)(e) of the Act, the amount received by the 'concern' is taxable in the hands of the 'concern' 3. Whether on the facts and circumstance of the case and in law, the ld. CIT(A) was right in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholding of Portescap is concerned, it was also entirely held by Kollmorgen, albeit 99. 99% directly and 0. 01% through its nominee, Mr. Jim Eder. The amount received from Portescap was sought to be taxed by the Assessing Officer on the strength of Sec. 2(22)(e) of the Act. Before the Assessing Officer, assessee made varied submissions. Firstly, assessee explained that the amount in question was received in three tranches during the year as Inter Corporate Deposit (ICD) and not as any loan or advance so as to be covered by Sec. 2(22)(e) of the Act. Secondly, it was canvassed that even if the ICD was to be understood as loan for the purpose of Sec. 2(22)(e) of the Act, it would not be covered under the said section as it was raised for a specific purpose. Assessee pointed out that the ICD was availed from Portescap for a specific purpose, i. e. to pay the purchase consideration for acquiring the Petrol Dispensing Pumps and Systems Division of Larsen Toubro Ltd. Without prejudice to the above submissions, assessee also pointed out that even if the amount was to fall within the purview of Sec. 2(22)(e) of the Act, the same could not be taxed in its hands as it was not a shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that Sec. 2(22)(e) of the Act was inapplicable in the instant case. The CIT(A) accepted the plea of the assessee principally on the ground that the deemed dividend could not be assessed in the hands of the assessee-company as it was not a shareholder in Portescap from whom such sum was received. In coming to such a decision, the CIT(A) has relied on a host of judicial pronouncements, including the judgments of the Hon'ble Bombay High Court in the case of (i) CIT vs Universal Medicare (P. ) Ltd. , 324 ITR 263 (Bom. ), (ii) CIT vs Impact Containers, 367 ITR 346 (Bom. ) and (iii) CIT vs NSN Jewellers (P) Ltd. , Income Tax Appeal no. 2312 of 2011 (Bombay HC). Against such a decision of the CIT(A), Revenue is in appeal before us. 7. Before us, the ld. DR has assailed the order of CIT(A) by pointing out that in view of the judgment of the Hon'ble Supreme Court in the case of Gopal and Sons (HUF) vs CIT, Kolkata-XI, (2017) 77 taxmann. com 71 (SC), the amount received by the assessee-company is taxable in the hands of the concerned recipient also and not the registered shareholder only. 8. On the other hand, the learned representative for the assessee has defended the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Portescap, and even if we were to assume that the amount received by the assessee-company is for the benefit of the stated aforesaid common shareholder, yet, it could only be assessed in the hands of such registered shareholder and not in the hands of the assessee-company. This proposition has been relied upon by CIT(A) to delete the addition, and which is well supported by the judgments of the Hon'ble Bombay High Court in the case of Universal Medicare (P. ) Ltd. (supra), Impact Containers (supra) and NSN Jewellers (P) Ltd. (supra). Thus, we find no justifiable ground to interfere in the conclusion drawn by the CIT(A). 11. So far as the reliance placed by the Revenue on the judgment of the Hon'ble Supreme Court in the case of Gopal and Sons (HUF) (supra) is concerned, the same, in our view, is quite inapplicable to the facts of the present case. Firstly, the assessee before the Hon'ble Supreme Court was a HUF and the issue was as to whether the loans and advances received by the HUF could be treated as deemed dividend within the meaning of Sec. 2(22)(e) of the Act. Notably, in the case before the Hon'ble Supreme Court, the payment was made by the company to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the hands of those registered shareholders and not in the hands of the assessee-company. 4. 4 In our view, on a plain reading of the provisions of Section 2 (22)(e) of the Act, no other conclusion can be reached. As a matter of fact, a Division Bench of this Court, in the case of Commissioner of Income Tax vs. Printwave Services P. Ltd. , (2015) 373 ITR 665 (Mad. ), has reached a somewhat similar conclusion. 5. Mr. Senthil Kumar, however, contends to the contrary and relies upon the judgment of the Supreme Court in Gopal and Sons (HUF) vs. Commissioner of Income-tax, Kolkata-XI, (2017) 77 taxmann. com 71 (SC). 5. 1 In our view, the question of law considered by the Supreme Court in the case of Gopal and Sons (supra) was different from the issue which arises in the present matter. The question of law which the Supreme Court was called upon to consider was whether loans and advances received by a HUF could be deemed as a dividend within the meaning of Section 2(22)(e) of the Act. The assessee in that case was the HUF and the payment in question was made to the HUF. The shares were held by the Karta of the HUF. It is in this context that the Supreme Court came to ..... 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