ASSISTANT COMMISSIONER OF INCOME TAX -1(2)(1)MUMBAI, MUMBAI vs. MADHUSUDHAN BABUBHAI KOCHA, MUMBAI

ITA 3516/MUM/2023Status: DisposedITAT Mumbai10 July 2024AY 2013-14Bench: Shri Satbeer Singh Godara (Judicial Member), Shri Girish Agrawal ( (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the primary condition for invoking Section 2(22)(e), which requires the assessee to be a beneficial owner of shares holding more than 10% voting rights in the creditor company, was not satisfied. Therefore, the addition made by the Assessing Officer was not justified.

What were the facts?

The Revenue appealed the CIT(A)'s order deleting the addition made under section 2(22)(e) of the Income Tax Act, 1961. The AO had made an addition for deemed dividend on account of a loan given to the assessee. The assessee's shareholding in the creditor company was found to be 7.94%, which is less than the 10% threshold required under section 2(22)(e).

What were the issues?

Whether the loan/advance received by the assessee from M/s Capital Control India Pvt. Ltd. constitutes deemed dividend under Section 2(22)(e) when the assessee's shareholding is less than 10%.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 2(22)(e),Section 2(32)

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Income Tax Appellate Tribunal, Mumbai “D” Bench, Mumbai.

Before: Shri Satbeer Singh Godara (JM) & Shri Girish Agrawal (AM)

For Respondent: Smt. Mahita Nair
Hearing: 01.07.2024Pronounced: 10.07.2024

Per Satbeer Singh Godara (JM) :-

This Revenue’s appeal for A.Y. 2013-14, arises against the learned CIT(A)/National Faceless Appeal Centre “NFAC”, Delhi’s Din and order No. ITBA/NFAC/S/250/2023-24/10546986(1) dated 28.07.2023 in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. Case called twice. None appears at assessee’s behest. Case file indicates that the registry has received back its RPAD notice dated 4.6.2024. The assessee is accordingly proceeded ex-parte.

2.

Learned DR vehemently argued during the course of hearing that the learned CIT(A)/NFAC herein has erred in law and on fac

The order continues below.

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