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TMI Blog2019 (1) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-interest bearing security deposit for mines as a commercial transaction. Therefore, we of the view that appreciation of the material on record by the Tribunal is just and appropriate. Even otherwise, we are also of the view that the issue involved revolves around appreciation of facts. We do not find that the order of the Tribunal suffers from any infirmity. There is no ground for any interference. Consequently, we hold that a sum of ₹ 17.50 crores received from MEL by Sri K.P. Poddar and transferred to the assessee, who was the shareholder, cannot be treated as dividend income of the assessee under Section 2(22)(e) of the Act. - Decided in favour of the assessee - Income Tax Appeal No.77 of 2010 - - - Dated:- 10-12-2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on different dates in all amounting to ₹ 17.90 crores. The assessee furnished a copy of the agreement said to have beenentered into between MEL and his father, Sri K.P. Poddar on 16-8-2004. In terms of the agreement, the mining lease rights were transferredfrom Sri K.P. Poddar to MEL and a sum of ₹ 17.50 crores was given to Sri K.P. Poddar as a refundabledeposit. A sum of ₹ 25 lakh was also given by MEL to Sri K.P. Poddar. The Assessing Officer came to the view that the agreement is artificially created for the purpose of withdrawing money by the assessee from the accumulated profits of MEL. That MEL was operating the mines even before and after the date of signing of the agreement. That the funds paid by MEL to Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 2(22)(e) of the Act. Therefore, the Assessing Officer was directed to delete the additions at ₹ 17.90 crores. Questioning the same, this appeal is filed by the Revenue. 3. By the order dated 19-10-2011, the appeal was admitted to consider the following substantial question of law: Whether a sum of ₹ 17.50 crores received from M/s. MEL by Sri K.P. Poddar and transferred to the assessee who was the shareholder constitutes dividend income of the assessee U/s.2(22)(e) of the Income Tax Act? 4. Sri K.V. Aravind, the learned counsel for the Revenue, contends that MEL was extracting mines much prior to the date of the agreement. The agreement is dated 16-8-2004 between MEL and Sri K.P. Poddar. The material on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities conducted by MEL even prior to the date of the agreement would really have no significance at all. The accounts of MEL would indicate the nature of transactions between it and Sri K.P. Poddar. The Appellate Authority does notdispute the said agreement. In fact, it came to the conclusion that the payment made to Sri K.P. Poddarby MEL was only an expenditure incurred for business expansion and profits of the Company. The Tribunal, on the other hand, considering the said agreement entered into between Sri K.P. Poddar and MEL, also recorded a finding that the genuineness of agreement is not disputed by the Assessing Officer, as could be evident from the assessment order of MEL and Sri K.P. Poddar. That the Company has since generated sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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