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Income Tax Appellate Tribunal, MUMBAI BENCHES “C”, MUMBAI
Before: Shri JOGINDER SINGH, & Shri G. MANJUNATHA
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 18-12-2015 of the learned first appellant authority, Mumbai challenging in taxing Rs.29,86,042/- as deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961 (hereinafter the Act), without considering the written submission along with the documents filed by the assessee vide letters dated 18-09-2015, 12-10-2015 & 04-11-2015.
During hearing the learned Counsel for the assessee Shri Jayesh Dadia, advanced arguments which are identical to the ground raised. Reliance was also (33 taxman.com 614 (Gujarat), Arvind Kumar Jain (18 taxman.com 132(Delhi), Suraj Dev Dada (367 ITR 78)
(P&H), Chariot International P Ltd (47 taxmann.com 374) (Bang-Trib.), NH Securities Ltd (11 SOT 32) (mum- Trib.) & Ishwar Chand Jindal (61 taxman.com 428) (Del- Trib.).
M/s Premier Estate & Equipments Pvt. Ltd.
2.1 On the other hand, Shri Rajat Mittal, the learned DR strongly defended the impugned order by inviting our invitation to the factual finding recorded in the impugned order. It was contended that section 2(22)(e) of the Act was rightly invoked by the learned Assessing Officer and confirmed by the learned CIT(A). It was pointed out that the assessee received loans from M/s.
Bajaj Hotels Pvt. Ltd., which have accumulated reserve and surplus, therefore these loans are covered under the provision of section 2(22)(e) of the Act. Reliance was placed upon the decision in CIT vs. P.K. Badiani (1970)
(76 ITR 369) (SC).
2.2 We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee declared loss of Rs. 51,14,961/- in its return filed on 15-09-2012, which was processed u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny, therefore, notices u/s 143(2) & 142(1) of the Act were served upon the assessee. From the balance sheet of the assessee it
M/s Premier Estate & Equipments Pvt. Ltd. was noticed by the learned Assessing Officer that the assessee had received loans and advances from Bajaj Hotel Pvt. Ltd. (its associate concern) amounting to Rs. 70,74,615/-. The assessee company was undisputedly holding more than 10% of shares of M/s. Bajaj Hotel Pvt. Ltd and thus, is a beneficial owner, therefore, so far as invocation of section 2(22)(e) of the Act, is concerned, the same is upheld. Out of the above amount, the assessee received Rs.29,86,042/- in the year under consideration. The learned Assessing Officer was of the view that why the loan issued from M/s. Bajaj Hotel Pvt. Ltd be treated as deemed dividend. The assessee responded vide reply dated 25-02-2015 as has been reproduced in the assessment order. As per the assessee, the assessee company is in the business of maintain and running a restaurant namely, “Dusk” at Vishakhapatnam in the hotel premises which belong to M/s. Bajaj Hotel Pvt. Ltd. The assessee provides paying guest facilities by running service apartment and union park, Khar (West), Mumbai. However, without going into much deliberation, we note that for Assessment Year
M/s Premier Estate & Equipments Pvt. Ltd.
2011-12 the learned Assessing Officer simply accepted the claim of the assessee without examining the factual matrix. So far as, the later year i.e. 2013-14 , is concerned, nothing was brought on record by the assessee as what happened to the same and even the factual matrix was not explained. The totality of the facts clearly indicates that the matter has not been examined in a required manner by the learned Assessing Officer and the facts are not clear. Before us, the grievance of the assessee is that the submissions of the assessee along with documents were not examined properly/ judiciously. Thus, keeping in view the principle of natural justice, we direct the learned Assessing Officer to examine the claim of the assessee afresh, in detail, and after providing due opportunity of being heard adjudicate the issue. The cases relied upon by the assessee may also be considered. The assessee is also directed to file the necessary documents, if any, to substantiate its claim. As mentioned earlier so far as invocation of section 2(22)(e) of the Act is concerned, we affirm the same as the assessee is a beneficial owner, is M/s Premier Estate & Equipments Pvt. Ltd. holding more than 10% of shares. Thus, the appeal of the assessee is allowed for statistical purposes only.
Finally, the appeal of the assessee is allowed for statistical purposes only.
This order was pronounced in the open court on 27/11/2017.