DCIT CC-8(2),MUMBAI, MUMBAI vs. RAKESH S KATHOTIA, MUMBAI

ITA 4295/MUM/2025Status: DisposedITAT Mumbai13 October 2025AY 2017-18Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to delete the addition. It noted that M/s Authum Investment was a listed NBFC, and the loan was advanced in its ordinary course of business, thus not falling under the purview of Section 2(22)(e).

What were the facts?

The revenue challenged the deletion of an addition made under Section 2(22)(e) by the Assessing Officer (AO). The AO treated a loan received by the assessee from M/s Authum Investment as deemed dividend, alleging it was routed through pass-through entities from M/s Subhkam Venture Pvt. Ltd., in which the assessee held substantial shares.

What were the issues?

Whether a loan received from a listed NBFC, even if indirectly funded by a shareholder's company, constitutes deemed dividend under Section 2(22)(e) and if additions can be made under Section 153A without incriminating material in unabated assessments.

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 153A

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SANDEEP GOSAIN & SHRI PRABHASH SHANKAR

For Appellant: Mr. Prashant Ghumare
For Respondent: Shri Umashankar Prasad, CIT DR
Hearing: 09.09.2025Pronounced: 13.10.2025

Per: SHRI. SANDEEP GOSAIN, J.M.:

The present appeal has been filed by the revenue challenging the impugned order dt. 03.04.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2017-18. The revenue has raised the following grounds of appeal:

1.

The Ld.CIT(A) ought to have appreciated that the addition under section 2(22)(e) is based on material available on record, including financial transactions and shareholding patterns, which are relevant and sufficient for determining total income under section 153A, irrespective of whether such material was se

The order continues below.

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