PRINCIPAL COMMISSIONER OF IN vs. M/S KGS ARANMULA INTERNATION

TCA.No.192 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.03.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA Tax Case Appeal No.192 of 2021 Principal Commissioner of Income Tax, Corporate Ward-3(4), Nungambakkam, Chennai - 34. ...Appellant Vs M/s.KGS Aranmula International Airport Ltd., No.43, Besant Avenue Road, Adyar, Chennai - 20. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 17.01.2018 made in ITA.No.105/Mds/2017 on the file of the Income Tax Appellate Tribunal, Madras 'C' Bench for the assessment year 2012-13. For Appellant: Mr.R.Karthik Ranganathan, SSC For Respondent: Mr.G.Baskar 1/6 http://www.judis.nic.in TCA.No.192 of 2021 JUDGMENT (Delivered by

T.S.Sivagnanam,J

) This appeal, filed by the Revenue, is directed against the order dated 17.01.2018 made in ITA.No.105/Mds/2017 on the file of the Income Tax Appellate Tribunal, Madras 'C' Bench (for brevity, the Tribunal) for the assessment year 2012-13. 2. The appellant-Revenue has raised the following substantial questions of law for consideration: "1. Whether on the facts and in the circumstances of the case, the Tribunal is legally justified in deleting the addition of Rs.6,36,63,979/- made by the Assessing Officer in the hands of the assessee company u/s 2(22)(e) of the IT Act? and 2. Whether on the facts and in the circumstances of the case, the Tribunal is legally correct in following the decision of the Hon'ble Supreme Court in the case of M/s.Ankitech when the Hon'ble Supreme Court while deciding the similar issue in the case of M/s.National Travel Services in CA Nos.2068-2071 of 2012 dated 18.01.2018 held that Ankitech's case wrongly decided in stating that no change was made by introducing the deeming fiction in so far as the expression "shareholder" is concerned and requires to be reconsidered?" 2/6 http://www.judis.nic.in TCA.No.192 of 2021 3. We have heard Mr.R.Karthik Ranganathan, learned Senior Standing Counsel for the appellant-Revenue and Mr.G.Baskar, learned counsel appearing for the respondent. 4. It is not disputed before us that identical substantial questions of law have been answered against the Revenue in the case of The Commissioner of Income Tax Vs. M/s.Enmas Engineering Pvt. Ltd. in TCA.No.895 of 2019 dated 08.10.2020. The operative portion of the judgment reads as follows: "3. It is not disputed before us that the Substantial Questions of Law raised by the Revenue in the instant case was considered by this Court earlier in the case of The Commissioner of Income Tax, Chennai Vs. M/s.T.Abdul Wahid & Co., in T.C.A.Nos.512 & 513 of 2018 dated 21.09.2020. The said judgment was followed in the case of The Commissioner of Income Tax, Chennai Vs. M/s.Checkpoint Apparel Labelling Solutions India Ltd., in T.C.A.No.307 of 2019 dated 29.09.2020. 3/6 http://www.judis.nic.in TCA.No.192 of 2021 4. It would be useful to refer to the operative portion of the judgment in the case of The Commissioner of Income Tax, Chennai Vs. M/s.Checkpoint Apparel Labelling Solutions India Ltd., wherein they had followed the decision in The Commissioner of Income Tax, Chennai Vs. M/s T.Abdul Wahid & Co., and the operative portion of the judgment reads as follows: “8. We had an occasion to consider an identical substantial question of law in the case of CIT Vs. M/s.T.Abdul Wahid & Co. [TCA.Nos.512 & 513 of 2018 dated 21.9.2020]. As contended before us in this appeal, an argument was made by Mr.T.Ravikumar, learned Senior Standing Counsel in the said decision that loans or advances had to be treated as dividend to the extent of accumulated profits and loan or advances may be given directly to the shareholder or it may be given for the benefit of the shareholder or on behalf of the shareholder. Therefore, it was contended that the Assessing Officer was right in treating the loan as deemed dividend under Section 2(22)(e) of the Act. 9. In the said decision, in support of his contentions, the learned Senior Standing Counsel referred to the decisions in the cases of (i) Gopal & Sons (HUF) Vs. CIT [reported in (2017) 145 DR 0289 (SC)]; (ii) Miss.P.Sarada Vs. CIT [reported in [1998] 229 ITR 444 (SC)]; (iii) CIT Vs. National Travel Services [reported in (2012) 347 ITR 0305]; and 4/6 http://www.judis.nic.in TCA.No.192 of 2021 (iv) National Travel Services Vs. CIT, [reported in (2018) 401 ITR 0154 (SC)], in which, the Hon'ble Supreme Court doubted the correctness of the decision in the case of CIT Vs. Ankitech Pvt. Lt. [reported in (2012) 340 ITR 0014]." 5. Thus, following the above decision, the Tax Case Appeal filed by the Revenue has to be necessarily rejected. Accordingly, the Tax Case Appeal is dismissed and the Substantial Questions of Law are answered against the Revenue. No costs." 5. Thus, by following the above decision, this Tax Case Appeal is dismissed and the substantial questions of law are answered against the Revenue. No costs. (T.S.S.,J.) (R.N.M.,J.) 08.03.2021 Index: Yes/No Internet:Yes/No hvk 5/6 http://www.judis.nic.in TCA.No.192 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk To 1. The Income Tax Appellate Tribunal, 'B' Bench, Chennai. 2. ThePrincipal Commissioner of Income Tax, Corporate Ward-3(4), Nungambakkam, Chennai - 34. TCA.No.192 of 2021 08.03.2021 6/6 http://www.judis.nic.in