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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI B.R. BASKARAN & SHRI VIKAS AWASTHY
आदेश /O R D E R
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The appeal filed by the assessee is directed against the order dated 27.10.2014, passed by the Ld. Commissioner of Income Tax (Appeals)-III, Chennai and it relates to assessment year 2010-
The assessee is aggrieved by the decision of Ld. CIT(Appeals) in confirming the assessment of `50 lakhs as deemed dividend in (in short 'the Act').
We heard the parties and perused the record. The Assessing Officer noticed that the assessee has received a loan of ` 50 lakhs from a concern named M/s Beekeyer Freights Pvt. Ltd..
The assessee-company as well as the above said company are closely held companies. The A.O. further noticed that the three Directors of the assessee-company are holding more than 10% of the shares in M/s Beekeyer Freights Pvt. Ltd. Hence, the Assessing Officer took the view that the amount of `50 lakhs received by the assessee is assessable as deemed dividend under Section 2(22)(e) of the Act. The Ld. CIT(Appeals) also confirmed the same and hence the assessee has filed this appeal before us. At the time of hearing, it was brought to our notice that the Hon'ble Madras High Court in the case of CIT v. Printwave Services (P.) Ltd. [Tax Case (Appeal) No.747 of 2014 dated 10th November, 2014] has held that the deemed dividend under Section 2(22)(e) of the Act can be assessed only in the hands of the beneficial or registered shareholder. The Ld. counsel submitted that the assessee herein does not hold any shares in the company M/s Beekeyer Freights Pvt. Ltd. Hence, the decision rendered by the Hon'ble Madras High Court in the above said case squarely applies to the assessee and
The Ld. counsel also submitted that the assessee had received advance from M/s Beekeyer Freights Pvt. Ltd. in the course of business transactions and hence the provisions of Section 2(22)(e) of the Act shall not apply to the same. However, we do not find it necessary to go into the issue in view of the decision mentioned in the earlier paragraph.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court after conclusion of hearing on the 5th day of February, 2015 at Chennai.