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TMI Blog2012 (10) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... n Inds. Ltd. (in short DIL) advanced a loan of ₹ 90 lakhs to another group concern M/s Cedar D cor P. Ltd. (in short CDPL). The assessee held 22.10% shares in the said M/s DIL and 11.65% in the previously mentioned CDPL. On the basis of the aforesaid fact that the A.O. issued a show cause notice to the assessee as to why deemed dividend income should not be taxed to the extent of accumulated profits of the said M/s DIL. In response the assessee replied that the chargeability of deemed dividend income u/s 2(22)(e) of the Income Tax Act, 1961 (the Act) did not arise in the case of the assessee on the facts of the case. The A.O., however, concluded that the assessee was holding not less than 10% of the voting power in both the companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in section 2(32) of the Act without appreciating the provisions of section 2(22)(e) define substantial interest as 10% of share holding and above and not 20% or above share holding as per provisions of section 2(32) of the I.T. Act. (ii) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in relying on the decision in Bhaumik Color (P) Ltd. 118 ITD 1 (Spel. Bench) which has been overruled by the Delhi High Court in National Travel Services 269.0 KiB 549 DLS (ITATONLINE.ORG) . 4. At the time of hearing the ld. D.R. supports the order of the A.O. 5. On the other hand, the ld. counsel for the assessee, after giving the factual matrix of the case that one of the essential pre-requisites for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing power in CDPL. Section 2(32) of the Act clearly defines that person who has a substantial interest in the company in relation to company, as a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty percent of the voting power. We further find that similar issue has been considered by the Tribunal in Anand Rathi Direct India (P.) Ltd. (supra) wherein the Tribunal vide para 6 of its order has held as under:- 6. We have considered the issue. As seen from order of Assessing Officer, he has considered that a common share holder M/s Predict Investment has substantial share holding of more than 10%. While ..... X X X X Extracts X X X X X X X X Extracts X X X X
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