DCIT 10(1), MUMBAI vs. PRAVEEN B. NAPATE, MUMBAI

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ITA 5380/MUM/2013Status: DisposedITAT Mumbai16 December 2015AY 2007-082 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 2(22)(e) cannot be invoked against a beneficial owner who is not a shareholder, citing various High Court and ITAT precedents. Therefore, the CIT(A)'s deletion of the addition was upheld.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 55 lakhs representing deemed dividend under Section 2(22)(e). The assessee argued that the provision is not applicable to a beneficial owner who is not a shareholder.

What were the issues?

Whether the provisions of Section 2(22)(e) of the Income Tax Act, 1961, can be applied to a beneficial owner who is not a shareholder.

Which sections of the Income-tax Act were involved?

Section 2(22)(e)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI AMARJIT SINGH

For Appellant: Ms. R.M. Madhavi, DR
For Respondent: Shri Bhupendra Karkhanis
Hearing: 16.12.2015Pronounced: 16.12.2015

सुनवाई की तायीख / Date of Hearing : 16.12.2015 घोषणा की तायीख /Date of Pronouncement : 16.12.2015 आदेश / O R D E R PER D. KARUNAKARA RAO, AM:

This appeal filed by the Revenue on 2.8.2013 is against the order of the CIT (A)-21, Mumbai for the assessment year 2007-2008. In this appeal, Revenue raised the following solitary ground which reads as under: “On the facts and circumstances of the case and in law the CIT (A) Erred in deleting the addition of Rs. 55 lakhs representing deemed dividend u/s 2(22)(e) of the Act.”

2.

At the outset, Ld Counsel for the assessee demonstrate that this is the case where the assessee is merely a beneficial owner of the companies between whom there was a loan transaction recorded in their respective books of accounts. In the assessment, AO invoked the provisions of section 2(22)(e) of the Act in this case of beneficial owner only ignoring the settled legal proposition that the said provisions are not to be invoked in the case of such beneficial owner. For this proposition, he relied on the order of the Tribunal in the case of DCIT vs. Vikas Oberoi ( 37 Taxman.com 46) (Mum – ITAT), wherein one of us (AM) is a party to the said order [ITA Nos. 4363 to 4364, 4440 & 4495 of 2011, dated 20.3.2013]. The said proposition is approved by the Hon’ble jurisdictional High Court in the case of CIT vs.

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