ACIT v. Bhaumik Colour (P) Ltd.

120 TTJ 865Income Tax Appellate Tribunal2009#8901 most cited
12

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2016 to 2025.

Sections most often in play

Section 143(3)Section 147Section 2(22)(e)Section 246ASection 264Section 271(1)(c)Section 274Section 40A(3)

Issues it is cited on

section 36(l)(iii)closely held companysection 2(22)deemed dividendsection 2(22)(e)beneficial ownersection 36(1)(iii)childtransferpersoncompanysection 143(3)

Judgments citing ACIT v. Bhaumik Colour (P) Ltd.

MADISON TEAMWORKS FILM PROMOTIONS AND ENTERTAINMENT PRIVATE LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX- 10(2)(2), MUMBAI, MUMBAI

In the result, the appeal of the assessee is allowed

ITA 3533/MUM/2025[2013-14]Status: DisposedITAT Mumbai26 Sept 2025AY 2013-14

Bench: Shri Vikram Singh Yadav & Shri Rahul Chaudharyassessment Year : 2013-14 Madison Teamworks Film Deputy Commissioner Of Promotions & Entertainment Income Tax-10(2)(2), Private Limited, Vs. Aayakar Bhavan, 1St Floor, 349 Business Point, M.K. Road, Western Express Highway, Mumbai-400020. Andheri (East), Mumbai-400069. Pan : Aaecm1006B (Appellant) (Respondent) For Assessee : Mr. Siddesh Chaugule & Ms. Manmeet Kaur Saini For Revenue : Shri Annavaram Kosuri, Sr.Dr

For Appellant: Mr. Siddesh Chaugule &For Respondent: Shri Annavaram Kosuri, Sr.DR
Section 143(3)Section 2(22)(e)Section 271(1)(c)Section 274Section 40A(3)

…erein it was held that “the deemed dividend can be taxed only in the hands of the shareholder and not the recipient company”. 10. In this regard, the Ld.AR has placed reliance on the following judicial precedents: a) ACIT Vs. Bhaumik Colour (P.) Ltd. (2009) 120 TTJ 865 (Mumbai Tribunal). In this ruling, the Hon'ble Special Bench of the Tribunal has held “that the intention behind the provisions of section 2(22)(e) is to tax dividend in the hands of shareholder”. "The deeming provisions as it applies to the case of loans or advances by a company to a concern in which its shareholder has substantial interest, is…

ACIT , RATLAM vs. M/S SHIRANI AUTOMOTIVES PVT. LTD, RATLAM MP

ITA 555/IND/2018[2014-15]Status: DisposedITAT Indore31 Mar 2023AY 2014-15

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2014-15 Acit, M/S. Shirani Automotive Ratlam P. Ltd. बनाम/ 29, Shirani Pura, Vs. Ratlam (Appellant / Revenue) (Respondent / Assessee) Pan: Aancs 1007 M Revenue By Shri P.K. Mishra, Cit-Dr Assessee By None Date Of Hearing 02.03.2023 Date Of Pronouncement 31.03.2023

Section 143(3)Section 2(22)(e)Section 36

…goods as the loan was given at beginning of the year whereas goods were sold at year-end-However, since assessee is not a registered or beneficial owner of shares; dividend cannot be added in hands of assessee in view of ACIT v. Bhaumik Colour (P) Ltd. (2009) 120 TTJ 865 (AT) SB(Mumbai)-Matter is remanded back to CIT(A) to decide afresh. (f) Agni Engineers v. Asst. CIT (2011) 17 ITJ 38 (Trib-Indore): Partners of assessee-firm has substantial interest in a closely held Page 5 of 10 M/s Shirani Automotives Pvt. Ltd. Assessment year 2014-15 Company - Assessee-firm obtained loan from closely held company – AO he…

ACIT, RATLAM, RATLAM vs. M/S SAGAR AUTOMOBILES PVT. LTD, RATLAM

In the result, the appeal filed by the Revenue in ITA No

ITA 569/IND/2018[2014-15]Status: DisposedITAT Indore27 Feb 2023AY 2014-15

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri B.M. Biyani (Accountant Member)

Section 143(3)Section 2(22)(e)Section 36(1)(iii)

…oods as the loan was given at beginning of the year whereas goods were sold at year-end- However, since assessee is not a registered or beneficial owner of shares; Dividend cannot be added in hands of assessee in view of ACIT v. Bhaumik Colour (P) Ltd. (2009) 120 TTJ 865 (AT) SB(Mumbai)-Matter is remanded back to CITA to decide afresh. (f) Agni Engineers v. Asst. CIT (2011) 17 ITJ 38 (Trib-Indore). Partners of assessee-firm has substantial interest in a closely held Company-Assessee-firm obtained loan from closely held company- held the same to be dividend in the hands of assessee-firm-HELD- Deemed dividend u/s…

ACIT, RATLAM vs. M/S SHIRANI MOTORS PVT. LTD., RATLAM (MP)

In the result, the appeal filed by the Revenue in ITA No

ITA 554/IND/2018[2015-16]Status: DisposedITAT Indore27 Feb 2023AY 2015-16

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri B.M. Biyani (Accountant Member)

Section 143(3)Section 2(22)(e)Section 36(1)(iii)

…oods as the loan was given at beginning of the year whereas goods were sold at year-end- However, since assessee is not a registered or beneficial owner of shares; Dividend cannot be added in hands of assessee in view of ACIT v. Bhaumik Colour (P) Ltd. (2009) 120 TTJ 865 (AT) SB(Mumbai)-Matter is remanded back to CITA to decide afresh. (f) Agni Engineers v. Asst. CIT (2011) 17 ITJ 38 (Trib-Indore). Partners of assessee-firm has substantial interest in a closely held Company-Assessee-firm obtained loan from closely held company- held the same to be dividend in the hands of assessee-firm-HELD- Deemed dividend u/s…

ACIT, RATLAM vs. M/S SHIRANI MOTORS PVT. LTD., RATLAM (MP)

In the result, the appeal filed by the Revenue in ITA No

ITA 553/IND/2018[2014-15]Status: DisposedITAT Indore27 Feb 2023AY 2014-15

Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri B.M. Biyani (Accountant Member)

Section 143(3)Section 2(22)(e)Section 36(1)(iii)

…oods as the loan was given at beginning of the year whereas goods were sold at year-end- However, since assessee is not a registered or beneficial owner of shares; Dividend cannot be added in hands of assessee in view of ACIT v. Bhaumik Colour (P) Ltd. (2009) 120 TTJ 865 (AT) SB(Mumbai)-Matter is remanded back to CITA to decide afresh. (f) Agni Engineers v. Asst. CIT (2011) 17 ITJ 38 (Trib-Indore). Partners of assessee-firm has substantial interest in a closely held Company-Assessee-firm obtained loan from closely held company- held the same to be dividend in the hands of assessee-firm-HELD- Deemed dividend u/s…

ITO, NEW DELHI vs. SMT. SAROJ CHACHRA,, NEW DELHI

In the result, both appeals of the Revenue are dismissed

ITA 5932/DEL/2016[2012-13]Status: DisposedITAT Delhi28 Feb 2020AY 2012-13

Bench: Ms. Sushma Chowla & Dr.B.R.R.Kumar, Am आयकर अपील सं. / Ita Nos.5931 & 5932/Del/2016 "नधा"रण वष" / Assessment Years 2011-12 & 2012-13

For Appellant: Sh. H.K.Choudhary, CIT DRFor Respondent: Sh. Abhishek Mathur, Adv
Section 143(3)Section 2(22)(e)

…the appellant was registered shareholder but she was not beneficial shareholder of the company. In this regard, reliance was placed by the appellant on the judgement of Special Bench of ITAT, Mumbai, in the case of ACIT Vs. Bhaumik Color Pvt. Ltd. reported T: 120 TTJ 865 (SB). In the instant case also, though, both the companies were pertaining to one group of companies but M/s. Superior Clothing Pvt. Ltd. was neither registered nor beneficial shareholder of M/s. Superior Films Pvt. Ltd. as interest was received on the loan amount. Similarly, though the appellant was registered shareholder of M/s. Superior films…

ITO, NEW DELHI vs. SMT. SAROJ CHACHRA,, NEW DELHI

In the result, both appeals of the Revenue are dismissed

ITA 5931/DEL/2016[2011-12]Status: DisposedITAT Delhi28 Feb 2020AY 2011-12

Bench: Ms. Sushma Chowla & Dr.B.R.R.Kumar, Am आयकर अपील सं. / Ita Nos.5931 & 5932/Del/2016 "नधा"रण वष" / Assessment Years 2011-12 & 2012-13

For Appellant: Sh. H.K.Choudhary, CIT DRFor Respondent: Sh. Abhishek Mathur, Adv
Section 143(3)Section 2(22)(e)

…the appellant was registered shareholder but she was not beneficial shareholder of the company. In this regard, reliance was placed by the appellant on the judgement of Special Bench of ITAT, Mumbai, in the case of ACIT Vs. Bhaumik Color Pvt. Ltd. reported T: 120 TTJ 865 (SB). In the instant case also, though, both the companies were pertaining to one group of companies but M/s. Superior Clothing Pvt. Ltd. was neither registered nor beneficial shareholder of M/s. Superior Films Pvt. Ltd. as interest was received on the loan amount. Similarly, though the appellant was registered shareholder of M/s. Superior films…

THE ITO, WARD-2(1)(1),, AHMEDABAD vs. M/S. GPSAR HEALTHCARE LTD.,, AHMEDABAD

In the result, both the appeals filed by the revenue on this issue for A

ITA 2905/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad18 Jan 2019AY 2011-12
For Appellant: Shri S.N. Soparkar, A.RFor Respondent: Shri Kamlesh Makwana, Sr. D.R
Section 73

…en the amount of loan transacted. 12.It is a settled proposition of law that if the recipient is not the shareholder provisions of section 2(22)(e) of the Act would not apply as held by the Special Bench of the Tribunal in the case of Bhaumik Colour Pvt. Ltd. 120 TTJ 865 which was confirmed by the Hon’ble High Court of Bombay in the case of Universal Medicare Pvt. Ltd. 324 ITR 263 wherein the Hon’ble High Court has laid down the ratio that deemed dividend have to be taxed in the hands of the shareholder and not in the hands of the assessee company. A similar view was taken by the Hon’ble Rajasthan High Court in t…

GPSAR HEALTH CARE LTD.,,AHMEDABAD vs. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-4,, AHMEDABAD

In the result, both the appeals filed by the revenue on this issue for A

ITA 2894/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad18 Jan 2019AY 2011-12
For Appellant: Shri S.N. Soparkar, A.RFor Respondent: Shri Kamlesh Makwana, Sr. D.R
Section 73

…en the amount of loan transacted. 12.It is a settled proposition of law that if the recipient is not the shareholder provisions of section 2(22)(e) of the Act would not apply as held by the Special Bench of the Tribunal in the case of Bhaumik Colour Pvt. Ltd. 120 TTJ 865 which was confirmed by the Hon’ble High Court of Bombay in the case of Universal Medicare Pvt. Ltd. 324 ITR 263 wherein the Hon’ble High Court has laid down the ratio that deemed dividend have to be taxed in the hands of the shareholder and not in the hands of the assessee company. A similar view was taken by the Hon’ble Rajasthan High Court in t…

ITO 8(2)(3), MUMBAI vs. SOLAR READYMADES P.LTD, MUMBAI

In the result, appeal of the Revenue is dismissed and the Cross

ITA 3286/MUM/2015[2009-10]Status: DisposedITAT Mumbai02 Aug 2016AY 2009-10

Bench: Shri C.N. Prasad, Hon’Ble & Shri Ramit Kochar, Hon’Bleito-8(2)(3), Vs. M/S. Solar Readymades P. Ltd., Mumbai. 264, Geeta Niketan, Linking Road, Next To Shoppers Stop, Bandra (W), Mumbai - 50 Pan No. Aafcs 2382 D (Appellant) (Respondent)

For Appellant: Shri Umesh Kolapkar – CAFor Respondent: Shri Sanjeev Kashyap - DR
Section 2(22)(e)

…er company and there are no accumulated profits for the lending company and hence, the provisions of section 2(22)(e) have no application. The assessee also relied on the decision of the Special Bench of the Mumbai Bench in the case of Bhaumik Colour (P)Ltd. (120 TTJ 865). Admittedly, the assessee is not a shareholder of the lending company. On perusal of the case-laws, we find that the issue is squarely covered in favour of the assessee wherein Special Bench held that deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other th…

DCIT 8(2), MUMBAI vs. OMEGA SHIPPING AGENCIES P.LTD, MUMBAI

In the result, the appeal of the Revenue is partly allowed for statistical purposes

ITA 5652/MUM/2014[2011-12]Status: DisposedITAT Mumbai20 Jun 2016AY 2011-12

Bench: Sri Mahavir Singh, Jm & Sri Ramit Kochar, Am The Dy. Commissioner Of Vs. M/S. Omega Shipping Agencies Income Tax -8(2), Mumbai, Pvt. Ltd., 610, A-Wig, Kohinoor R. No.216-A, Aayakar Bhavan, City Mall, Kirol Road, Kurla (W), M. K. Road, Mumbai 400 020 Mumbai 400 070 Pan: Aaaco 3745 R Appellant .. Respondent Appellant By Shri Naveen Gupta, Dr Respondent By Shri Ajay R. Singh, Ar Date Of Hearing 15-06-2016 Date Of Pronouncement 20-06-2016

Section 143(3)Section 2Section 2(22)Section 2(22)(e)Section 271Section 274

…the decision of the Hon’ble Bombay High Court in the case of CIT Vs Universal Medicare Pvt. Ltd. [(2011) 237 CTR 147 (Bom.)] wherein the decision of the Special Bench of this Tribunal was approved in the case of ACIT Vs M/s. Bhaumik Colours Pvt. Ltd. [(2009) 120 TTJ 865 (Bom.) (SB)]. According to the learned Counsel for the assessee, similar view has been taken by the Hon’ble Rajasthan High Court in the case of CIT Vs Hotel Hilltop [(2008) 217 CTR (Raj.) 527]. The learned Counsel for the assessee stated that in assessee’s own case exactly on identical facts, the Tribunal in assessment year 2009-10 and 2010-11 in…

DCIT, NEW DELHI vs. M/S SEAVIEW DEVELOPERS PVT. LTD.,, NEW DELHI

ITA 2365/DEL/2013[2009-10]Status: DisposedITAT Delhi31 May 2016AY 2009-10

Bench: Shri J.S. Reddy & Shri Kuldip Singh

For Appellant: Shri Ravi Sharma, AdvocateFor Respondent: Smt. Paramita M. Bishvash, CIT DR
Section 143(2)Section 2(22)(e)

…AO. However, on the other hand, ld. AR for the assessee contended that the issue involved in this case is duly covered by the cases cited as Commission of Income- tax vs. Ankitech (P.) Ltd. 199 Taxman 341 (Delhi) and ACIT vs. Bhaumik Colour (P.) Ltd. (SB) 120 TTJ 865 (Mumbai). 9. AO treated the amount received by the assessee company as advance from five companies as deemed dividend to the extent accumulated profit is available with the company giving advance by invoking the provisions contained u/s 2(22)(e) of the Act primarily on the grounds inter alia that 60% of the actual and beneficial shares in all t…