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TMI Blog2024 (10) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... S. AMIT INTERTRADE PVT. LTD [ 2022 (2) TMI 1397 - ITAT AHMEDABAD] as held the assessee in the case on hand was neither the beneficial owner of the shares nor registered owners of the shares, thus no addition u/s 2(22)(e) required. Thus provisions of section 2(22)(e) cannot be applied in the given set of facts as the assessee on hand is not a registered shareholder of the company - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri Soundararajan K., Judicial Member For the Appellant : Shri R. Krishnan, CA For the Respondent : Smt. Girly Albert, Sr. D.R. ORDER PER BENCH This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 17.12.2022 for Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares in M/s Nikunjam Constructions, and he had substantial interest in the appellant company. Thus, even though the appellant was not a shareholder of M/s Nikunjam Constructions Pvt Ltd and had not received any dividend, the advance received from M/s Nikunjam Constructions out of the accumulated profits, is hit by the deeming provision under section 2(22)(e) of the Act. As per judicial decisions, exceptions to this rule may be available to cases where there are business transactions between two entities. However, in the appellant's case, as there was no business transaction involved, the same did not fall under the exception. The grounds raised are rejected 5. Being aggrieved by the order of the learned CIT(A) the assessee is in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % shares in Assessee Company and also holding more than 20% shares in M/S JP Iscon Ltd. Likewise, the assessee has shown unsecured from impugned party in balance sheet for the year under consideration. Accordingly the AO in the case on hand has treated the amount of Rs. 8,94,41,125.00 as deemed dividend in the hands of the assessee on the reasoning that the transactions of advancing loan as discussed above falls within the purview of the provisions of section (2)(22)(e) of the Act. However, the learned CIT (A) was pleased to delete the addition made by the AO for the reasons as discussed in the aforesaid paragraphs. 8.1 The 1st question before us arises whether it is sine qua non that the assessee company, which is not a registered sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lender company. In this regard we find support and guidance from the judgment of Hon ble Jurisdictional High court in Tax appeal no. 891 of 2016 in case of PCIT vs. Mahavir Inductomelt Pvt Ltd where in similar facts the Hon ble court held as under: 50. Identical question came to be considered by the Division Bench of this Court in Tax Appeal No. 253 of 2015. After considering the decision of the Bombay High Court in the case of CIT vs. Impact Containers Private Limited ors rendered in I TA No. 114 of 2012 and the decision of the Delhi High Court in the case of CIT vs. Ankitech Pvt Ltd reported in 340 ITR 14 (Del) and on interpreting Section 2(22)(e), in para 4 has observed and held as under: 4. Shri Bhatt, learned Counsel appearing on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, admittedly the assessee company is not holding any shares or rights of M/s. JP Iscon Ltd. Thus considering the above discussion and judgment of Hon ble jurisdictional court in case of Mahavir Inductomelt (Supra), the AO was not justified in invoking the provision of section 2(22)(e) of the Act in its case. The learned CIT(A) rightly deleted the addition made by the AO. 8.4 At this juncture, it is also important to deal with the contention raised by the learned DR at the time of hearing as discussed above after referring to the judgment of Hon ble Supreme Court in the case of Gopal and Sons (HUF) Vs. CIT reported in 77 Taxmann.com 71. In Gopal And Sons (HUF) v. CIT [2017] 391 ITR 1/77 taxmann.com 71/245 Taxman 48 (SC) the assessee a HUF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in the case of Gopal and Sons (HUF) v. CIT [2017] 77 taxmann.com 71/245 Taxman 48/391 ITR 1 was distinguished by the Madras High Court after observing that as in the case before the Supreme Court the assessee was the beneficial shareholder, whereas on facts, it was not so, in the assessee's case. Admittedly, the assessee in the case on hand was neither the beneficial owner of the shares nor registered owners of the shares. Accordingly, in our humble understanding, the principles laid down by the Hon ble Supreme Court in the case of Gopal and Sons (HUF) Vs. CIT reported in 77 Taxmann.com 71 are not applicable in the given facts and circumstances. Thus the ground of appeal raised by the Revenue is hereby dismissed. 8.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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