ASSISTANT COMMISSIONER OF INCOME TAX, CENRTALCIRCLE-1, VISAKHAPATNAM vs. VIJAYNAGAR FOOD AND NUTRACEUTICALS PVT LTD, VISAKHAPATNAM

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ITA 246/VIZ/2022Status: DisposedITAT Visakhapatnam29 March 2023AY 2018-19Bench: SHRI DUVVURU RL REDDY, HON’BLE (Judicial Member), SHRI S BALAKRISHNAN, HON’BLE (Accountant Member)7 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding that Section 2(32) of the Act defines substantial interest as holding not less than twenty percent of the voting power. Since the common director held only 19.05% of shares, the provisions of Section 2(22)(e) were not attracted.

What were the facts?

The Revenue appealed against the CIT(A)'s order which deleted the addition of Rs. 6,12,05,651/- made by the AO as deemed dividend under Section 2(22)(e). The AO treated advances received by the assessee from M/s. Vijaynagar Biotech Private Limited as deemed dividend.

What were the issues?

Whether advances received by the assessee company from another company constitute deemed dividend under Section 2(22)(e) when the common shareholder holds less than 20% of the shares in the assessee company.

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 2(32),Section 153A,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE

Hearing: 09/03/2023

Heard together (2 matters)

I.T.A. No. 246/Viz/2022
C.O. No. 2/Viz/2023

Read from the judgment's own cause title. This page is filed under one of them.

of 20% in order to have substantial interest in a company. The ground raised by Revenue on Explanation 3(b) to section 2(22)(e) refers to a concern other than a company and hence not relevant for the instant case. We therefore find that there is no requirement to interfere in the order of the Ld. CIT(A) on this ground. Accordingly the appeal of the Revenue on this ground is dismissed.

7.

Ground No.2 with respect to legal issue raised by the Revenue, since the appeal is adjudicated on merits against the Revenue, this legal issue need not be adjudicated.

8.

Ground Nos. 1 & 4 are general in nature and needs no adjudication.

9.

In the result, appeal of the Revenue is dismissed.

7 10. Cross Objection raised by the assessee is supportive in nature and therefore the adjudication of the CO becomes infructuous. Pronounced in the open Court on the 29th March, 2023.

Sd/- Sd/- (दु�वू� आर.एल रे�डी) (एस बालाकृ�णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) �या�यकसद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER Dated : 29.03.2023 OKK - SPS आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- �नधा�रती/ The Assessee – M/s. Vijaynagar Food and Nutraceuticals 1. Private Limited, 9-29-15/7, 3rd Floor, Padmavathi Towers, Balaji Nagar, Upstairs Canara Bank Regional Office, VIP Road, Siripuram, Visakhapatnam, Andhra Pradesh – 530003. राज�व/The Revenue – Assistant Commissioner of Income Tax, Central 2. Circle-1, 5th Floor, Direct Taxes Building, Sector-8, MVP Double Road, Visakhapatnam, Andhra Pradesh-530017.

3.

The Principal Commissioner of Income Tax, आयकर आयु�त (अपील)/ The Commissioner of Income Tax (Appeals)-3, 4. Visakhapatnam. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ 5. DR, ITAT, Visakhapatnam गाड� फ़ाईल / Guard file 6. आदेशानुसार / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam

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