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TMI Blog2019 (5) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of the previous year, which, in our opinion, has been rightly treated by the Tribunal as an advance to the Director falling within the mischief of Section 2(22)(e). The same was therefore, liable to be taxed as deemed dividend in the hands of the Assessee. Therefore, the Appellate Tribunal has not committed any error. We do not find any merit in the appeal filed by the Assessee and thus the questions of law are answered in favour of the Revenue and against the Assessee. Maintainability of the appeal - Instruction of CBDT for not filing or withdrawing appeal on low tax effect - binding on Tribunal or Court - HELD THAT:- The Court or the concerned Tribunal cannot compel the litigant, be it Revenue Department or the Assessee, to wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55/MDS/2016, raising the following substantial questions of law: 1.Whether the Appellate Authority was right in law to hold that the transaction of transferring the asset of the Company for a due consideration amounts to dividend as per the provisions of Section 2(22)(e) of the Income Tax Act, 1961? 2.Whether the Authorities were right in preferring an appeal against the order passed by the CIT(A) deleting the addition done by the Assessing Officer holding that the transaction does not fall under the purview of Sec.2(22)(e) of the Income Tax Act, 1961 in derogation of the bar imposed by the CBDT vide its Circular No.21/2015 dated 10th December 2015 in filing appeals by the Department before the Income Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities. As per Sec.2(22)(e) of the Income Tax Act deemed dividend is - any payment by a company, not being a company in which the public are substantially interested, of any sum otherwise) by way of advance or loan to a shareholder being a person who is the beneficial owner of shares holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. 6.From the above definition, deemed dividend u/s.2(22)(e) is any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal Vs. CIT (41 ITR 275) held that Dividend need not be distributed in money; it may be distributed by delivery of property or right having monetary value . We reproduced the relevant extract of the Hon'ble Supreme Court cited supra. Dividend need not be distributed in money; it may be distributed by delivery of property or right having monetary value. The resolution, it is true, did not purport to distribute the right amongst the shareholders as dividend. It did not also take the form of a resolution for distribution of dividend; it took the form of distribution of a right which had a monetary value. But by the form of the resolution sanctioning the distribution, the true character of the resolution could not be altere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the judgment of the Hon'ble Supreme Court in Director of Income Tax, Circle 26(1), New Delhi vs. S.R.M.B.Dairy Farming (P) Ltd., reported in (2018) 13 SCC 239, in support of his preliminary contention. 5.Per contra, Mr.T.R.Senthilkumar, learned Senior Standing Counsel for the respondent, submitted that the case falls within the exception of Clause 6(c) of the said Instruction No.3 of 2011 dated 09.02.2011 and therefore the Revenue was not bound to withdraw the said appeal from the Tribunal and the Tribunal has rightly decided the case on merits. On the merits of the case, the learned counsel for the Revenue has supported the impugned order and submitted that the unpaid price of the flat sold by the company to the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s there is objection raised by the other side and the Court upholds such objection. Such Instructions of CBDT are neither binding on the Court or the Tribunal, nor the Board could direct the concerned Court or Tribunal to compel the litigant to withdraw such appeal. 7.Once the learned Tribunal has pronounced upon the merits of the appeal of the Assessee, the first contention raised by the learned counsel for the Assessee that the appeal before the Tribunal was not maintainable, is infructuous and this Court cannot set aside the order passed by the Income Tax Appellate Tribunal on merits, on account of the aforesaid Instruction No.3 of 2011 dated 09.02.2011, even if it is held to be applicable to this case. 8.Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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