Loading judgment…
No AI summary yet for this case.
Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�,राजे� के अनुसार -Per Rajendra,AM: Challenging the order,dated 26.12.2014,of the CIT(A)-49,Mumbai the Assessing officer (AO)has filed the present appeal.Assessee,an individual,deriving income from salary, commission and house property filed his return of income on 31.07.2006 declaring income of Rs. 2.57 Crores.The AO completed the assessment u/s.143(3)r.w.s.147 of the Act,on 31.10. 2013,determining his income at Rs.3.03 Crores.
2.Effective ground of appeal is about deleting the addition,made by the AO,u/s.2(22)(e) of the Act.The First Appellate Authority(FAA),following the order of the Tribunal for the subsequent AY.,allowed the appeal filed by the assessee.
3.It was brought to our notice that identical issue was deliberated upon by the Tribunal in its order dated 26.09.2012(ITA/5635/Mum/2010-AY.2007-08).We find that while deciding the appeal for the AY. 2007-08 the Tribunal had dealt the identical issue as under:
“8. Before us, the DR relied heavily on the observation of the AO and pleaded strenuously to sustain the addition made by the AO.
On the other hand, the AR pleaded that the case is squarely covered by the decisions mentioned in the submissions made and specially cited the case of ITO vs S.S. Barodawala, reported in 4 ITD 186 (Bom) wherein identical circumstance was decided and also placed reliance on the Special Bench decision in the case of ACIT vs Bhaumik Colour (P) Ltd. The AR, thus, pleaded that the decision taken by the CIT (A) is well founded and in accordance with law.
2352/Mum/15-Xerxes -
We have heard the rival contentions and also perused the orders of the revenue authorities. It is imperative that we look into the exact words used in the provision, which are, “section 2(22)(e): any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits”.
From the plain reading of the relevant section, it is abundantly clear that the provision shall get triggered only if:
a) recipient is a registered and beneficial owner of shares; (both inclusive) b) holding not less then 10% of the voting rights. (we are not concerned with other conditions at present) In the circumstances at hand, we find that the assessee is neither the beneficial owner nor holding 10% of the voting rights, therefore, on the face of circumstances, the provisions of section 2(22)(e) cannot be triggered on the assessee.
We have also referred to the case laws relied upon by the assessee and the CIT(A), to decide the issue in favour of the assessee.
Reading the case laws conjointly, with the relevant section, we are of the considered opinion, that provisions cannot be triggered in the present set of circumstances, and we, therefore, sustain the decision of the CIT(A).
In the result, the appeal filed by the department is dismissed.” Respectfully following the above order of the Tribunal ,we decide the effective grounds of appeal against the AO, as the facts are identical to the facts of subsequent year and the only difference is of the amount involved.
As a result,appeal filed by the AO stands dismissed. फलतः िनधा�रती अिधकारी �ारा दािखल क� गई अपीले नामंजूर क� जाती है. Order pronounced in the open court on 3rd January,2017. 2017 को क� गई । आदेश क� घोषणा खुले �यायालय म !दनांक 3 जनवरी , Sd/- Sd/- (पवन�सह पवन�सह / PawanSingh ) (राजे�� / Rajendra) पवन�सह पवन�सह �याियक सद�य / JUDICIAL MEMBER लेखा लेखा सद�य सद�य / ACCOUNTANT MEMBER लेखा लेखा सद�य सद�य मुंबई Mumbai; !दनांक Dated : 03.01.2017. Jv.Sr.PS. आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1.Appellant /अपीलाथ# 2. Respondent /$%यथ# 2
2352/Mum/15-Xerxes -