(Refer: CIT v. C.P.Sarathy Mudaliar

83 ITR 170Supreme Court of India1972#1811 most cited

What is (Refer: CIT v. C.P.Sarathy Mudaliar authority for?

For the purpose of deemed dividend under section 2(22)(e) of the Income-tax Act, the term 'shareholder' refers exclusively to a registered shareholder of the company, and not a beneficial owner or non-shareholder.

63

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2025.

Also referred to as

C.P.Sarathy Mudaliar · CIT v. C.P.Sarathy Mudaliar · section 2(22)(e) · section 2(6A) · deemed dividend · shareholder definition · registered shareholder · beneficial owner · closely held company · non-shareholder

Sections most often in play

Section 2(22)(e)Section 143(3)Section 147Section 148Section 142(2A)Section 14ASection 40(a)(ia)Section 40A(2)(b)

Issues it is cited on

section 40(3)short deduction of tdsclosely held companyinterest on interestaccumulated profitsshort deduction of taxsection 2(22)deemed dividendsection 2(22)(e)related party transactionbeneficial ownersection 194j

Judgments citing (Refer: CIT v. C.P.Sarathy Mudaliar

Pyramid Realtors Pvt. Ltd., New Delhi vs. ACIT, New Delhi

ITA 2057/DEL/2017[2010-11]Status: DisposedITAT Delhi08 Oct 2018AY 2010-11

Bench: Shri Bhavnesh Saini & Shri L.P. Sahu

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri Pradeep Singh Gautam
Section 143(1)Section 143(3)Section 2(22)(e)

…se for which they are created and should not be extended beyond their legitimate field as held by the Supreme Court in the case of CIT vs. Vadilal Lalubhai in 86 ITR 2 and 181 ITR 1 (Kerala), CIT vs. P.V. John. (iv) In the case of CIT vs. Sarathy Mudaliar in 83 ITR 170, the Hon’ble Supreme Court 65 ITA.Nos.2053, 2054, 2055, 2056 & 2057/Del./2017 M/s. Saamag Developers Pvt. Ltd., New Delhi & Others. 14.3.1 In the case of CIT vs. Sarathi Mudaliar in 83 ITR 170, the Hon’ble Supreme Court, while considering the provision of Section 2(6A)(e) of the Indian Income-tax Act, 1922 (which is parimateria to Section 2(22)(…

Saga Developers Pvt. Ltd., New Delhi vs. ACIT, New Delhi

ITA 2056/DEL/2017[2010-11]Status: DisposedITAT Delhi08 Oct 2018AY 2010-11

Bench: Shri Bhavnesh Saini & Shri L.P. Sahu

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri Pradeep Singh Gautam
Section 143(1)Section 143(3)Section 2(22)(e)

…se for which they are created and should not be extended beyond their legitimate field as held by the Supreme Court in the case of CIT vs. Vadilal Lalubhai in 86 ITR 2 and 181 ITR 1 (Kerala), CIT vs. P.V. John. (iv) In the case of CIT vs. Sarathy Mudaliar in 83 ITR 170, the Hon’ble Supreme Court 65 ITA.Nos.2053, 2054, 2055, 2056 & 2057/Del./2017 M/s. Saamag Developers Pvt. Ltd., New Delhi & Others. 14.3.1 In the case of CIT vs. Sarathi Mudaliar in 83 ITR 170, the Hon’ble Supreme Court, while considering the provision of Section 2(6A)(e) of the Indian Income-tax Act, 1922 (which is parimateria to Section 2(22)(…

Saamag Construction Ltd., New Delhi vs. ACIT, New Delhi

ITA 2054/DEL/2017[2010-11]Status: DisposedITAT Delhi08 Oct 2018AY 2010-11

Bench: Shri Bhavnesh Saini & Shri L.P. Sahu

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri Pradeep Singh Gautam
Section 143(1)Section 143(3)Section 2(22)(e)

…se for which they are created and should not be extended beyond their legitimate field as held by the Supreme Court in the case of CIT vs. Vadilal Lalubhai in 86 ITR 2 and 181 ITR 1 (Kerala), CIT vs. P.V. John. (iv) In the case of CIT vs. Sarathy Mudaliar in 83 ITR 170, the Hon’ble Supreme Court 65 ITA.Nos.2053, 2054, 2055, 2056 & 2057/Del./2017 M/s. Saamag Developers Pvt. Ltd., New Delhi & Others. 14.3.1 In the case of CIT vs. Sarathi Mudaliar in 83 ITR 170, the Hon’ble Supreme Court, while considering the provision of Section 2(6A)(e) of the Indian Income-tax Act, 1922 (which is parimateria to Section 2(22)(…

Saamag Developers Pvt. Ltd., New Delhi vs. ACIT, New Delhi

ITA 2053/DEL/2017[2010-11]Status: DisposedITAT Delhi08 Oct 2018AY 2010-11

Bench: Shri Bhavnesh Saini & Shri L.P. Sahu

For Appellant: Shri M.P. Rastogi, AdvocateFor Respondent: Shri Pradeep Singh Gautam
Section 143(1)Section 143(3)Section 2(22)(e)

…se for which they are created and should not be extended beyond their legitimate field as held by the Supreme Court in the case of CIT vs. Vadilal Lalubhai in 86 ITR 2 and 181 ITR 1 (Kerala), CIT vs. P.V. John. (iv) In the case of CIT vs. Sarathy Mudaliar in 83 ITR 170, the Hon’ble Supreme Court 65 ITA.Nos.2053, 2054, 2055, 2056 & 2057/Del./2017 M/s. Saamag Developers Pvt. Ltd., New Delhi & Others. 14.3.1 In the case of CIT vs. Sarathi Mudaliar in 83 ITR 170, the Hon’ble Supreme Court, while considering the provision of Section 2(6A)(e) of the Indian Income-tax Act, 1922 (which is parimateria to Section 2(22)(…

DCIT, New Delhi vs. M/S. Baheti Rohoplast Pvt. Ltd., New Delhi

In the result, appeal of the Department is dismissed

ITA 2583/DEL/2016[2012-13]Status: DisposedITAT Delhi23 Apr 2018AY 2012-13

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

For Appellant: -None-For Respondent: Shri S.R. Senapati, Sr. D.R
Section 2Section 2(22)(e)

…ITA.No.2583/Del./2016 M/s. Baheti Rohoplast Pvt. Ltd.,New Delhi. 7. We have considered the submissions of the Ld. D.R. and perused the findings of the authorities below. The Hon’ble Supreme Court in the case of Rameshwarlal Sanwarmal vs. CIT, Assam (1980) 122 ITR 1 (SC) held as under : “It is only where a loan is advanced by the company to a registered shareholder and the other conditions set out in s. 2(6A)(e) of the Indian I.T. Act, 1920 are satisfied, that the amount of the loan would be liable to be regarded as “deemed dividend ” within the meaning of s. 2(6A)(e). A loan granted to a beneficial owner o…

ACIT, Bhubaneswar vs. Mazda Concrete Products (P) Ltd, Hyderabad

In the result, appeal of the Revenue is dismissed

ITA 118/CTK/2014[2010-11]Status: DisposedITAT Cuttack12 Mar 2018AY 2010-11

Bench: Shri N.S.Saini, Am & Shri Pavan Kumar Gadale, Jm आयकर अपीऱ सं./Ita No.118/Ctk/2014 (नििाारण वषा / Assessment Year : 2010-2011) Acit,Circle-2(1), Vs. M/S Mazda Concrete Bhubaneswar Products (P) Ltd., 3Rd Floor, The Grand, Rajbhawan Road, Somajiguda, Hyderabad स्थायी लेखा सं./ Pan No. : Aabcm 9883 H (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) .. राजस्व की ओर से /Revenue By : Shri Piyush Kolhe, Citdr निर्ाारिती की ओर से /Assessee By : Shri B.Satyanarayana Murty, Fca Ar सुनवाई की तारीख / Date Of Hearing : 21/03/2018 घोषणा की तारीख/Date Of Pronouncement 23/03/2018 आदेश / O R D E R Per Shri Pavan Kumar Gadale, Jm: The Revenue Has Filed This Appeal Against The Order Of Cit(A)-Ii, Bhubaneswar Dated 12.02.2014. 2. The Revenue Has Raised The Following Grounds :- 1. On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Is Not Justified In Law As Well As Facts In Deleting The Addition Of Rs.3,50,24,517/- Made By The Ao On Account Of Suppression Of Closing Stock. 2. On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Is Not Justified In Law As Well As Facts In Deleting The Addition Of Rs. 17,34,99120/- Made By The Ao On Account Of Deemed Dividend U/S.2(22)(E) Of-The Act. 3. On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Is Not Justified In Law-As Well As Facts In Deleting The Addition Of Rs.57,75,425/- Made By The Ao On Account Of Interest Paid U/S.40(A)(Ia) Of The Act. 4. On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Is Not Justified In Law As Well As Facts In Deleting The Addition Of Rs. 15,59,634/- Made By The Ao On Account Of Rent Paid U/S.40(A)(Ia) Of The Act.

For Appellant: Shri B.Satyanarayana Murty, FCA ARFor Respondent: Shri Piyush Kolhe, CITDR
Section 139(1)Section 139(5)Section 143(1)Section 143(2)Section 2(22)(e)Section 40Section 40A(7)

…ings of AO, has deleted the addition made by the AO by observing as under :- “The appellant during hearing has submitted many decisions of higher legal authorities which emanated from the principle set forth in the case of CIT vs C. P. Sarathy Mudaliar (1972) 83 ITR 170 (SC) . The apex court concluded that amounts paid by way of advance of loan to a registered share holder alone can be taxed as deemed dividend in the hands of the share holder. Following this judgement number of courts have held that while invoking the 6 provisions of Section 2(22)(e) of the I. T. Act, a registered share holder of a company alone…

DCIT, Circle-16(2), Hyderabad vs. Margadarsi Marketing Private Limited, Hyd, Hyderabad

In the result, all the appeals filed by the Department are dismissed

ITA 763/HYD/2017[2011-12]Status: DisposedITAT Hyderabad24 Jan 2018AY 2011-12

Bench: Smt. P. Madhavi Devi & Shri S. Rifaur Rahmanassessment Year: 2011-12

For Appellant: Shri K. Gopal ChoudaryFor Respondent: Smt. Suman Malik
Section 143(2)Section 2(22)(e)

…IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ‘A', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Assessment Year: 2011-12 Dy. Commissioner of vs. M/s Margadarsi Marketing Income-tax, Circle – 16(2) Pvt. Ltd., Hyderabad. Hyd. PAN – AABCM4752F Appellant Respondent Revenue by: Smt. Suman Malik Assessee by: Shri K. Gopal Choudary Date of hearing: 16/01/2018 Date of pronouncement: 24/01/2018 O R D E R PER S. RIFAUR RAHMAN, AM: This appeal is filed by the revenue against the order of CIT(A) - 4, Hyderabad, dated 16/2/2017 relates to the AY 2011-12. 2.…

ACIT, New Delhi vs. M/S. A & A Earthmovers Pvt. Ltd., New Delhi

In the result the appeal filed by the revenue is dismissed

ITA 237/DEL/2015[2010-11]Status: DisposedITAT Delhi29 Sept 2017AY 2010-11

Bench: Shri R. K. Panda & Ms. Suchitra Kambleassessment Year : 2010-11

For Appellant: Shri Somil Agarwal, AdvFor Respondent: Shri R.C.Dandey, Sr. DR
Section 10(34)Section 14ASection 14A(2)Section 198

…ich was synonymous to section 2(22)(e) of the current Act, held that shareholder in the context of deemed dividend referred to only registered shareholder. The above view was also confirmed by the apex court in the case of Rameshwarlal Sanwarmal v. CIT (1980) 122 ITR 1 14.4. Respectfully following the ratio of the above judgments on the issue, the addition of Rs.42,97,686/- in the hands of the appellant company cannot be sustained as the amount can be brought to tax only in the hands of the shareholders of the lender company, i.e. Shri Ashish Anand and Shri Amarpreet Anand and not in hands of the appellant compa…

ITO 2(3)(2), Mumbai vs. Saturn Advisory Services P.Ltd, Mumbai

The appeal of the Revenue is dismissed

ITA 802/MUM/2015[2006-07]Status: DisposedITAT Mumbai12 Sept 2017AY 2006-07

Bench: Shri Joginder Singh & Shri G. Manjunathaassessment Years: 2006-07 Income Tax Officer-2(3)(2), M/S Saturn Advisory Room No. 518A, Services Pvt. Ltd., बनाम/ Aayakar Bhavan, M.K. Road, 44, Strategic House, Vs. Mumbai-400020 Mint Road, Fort, Mumbai-400001 (राज"व /Revenue) ("नधा"रती/Assessee) Pan No.:-Aajcs2674N

Section 143(1)

…ic was not substantially interested. Nor was there any dispute that these companies possessed accumulated profits to the extent of the loan or advance. [Para 19] In view of the judgments of the Supreme Court in the cases of CIT v. C.P. Sarathy Mudalian [1972] 83 ITR 170 and Rameshwarlal Sanwarlal v. CIT [1980] 122 ITR 1/3 Taxman 1 (AP), it is clear that to attract the first limb of the provisions of section 2(22 )(e) the payment must be to a person who is a registered holder of shares. As already mentioned the condition under the 1922 Act and the 1961 Act regarding the payee being a shareholder remains the same a…

Bharat Bir Mohindra, Chennai vs. ACIT, Chennai

In the result, the appeal of the assessee is partly allowed for

ITA 462/CHNY/2013[2007-08]Status: DisposedITAT Chennai04 Sept 2017AY 2007-08

Bench: Shri N.R.S. Ganesan & Shri Chandra Poojari] आयकर अपील सं./I.T.A. No. 462/Mds/2013 "नधा"रण वष" /Assessment Year : 2007-2008

For Appellant: Shri. K. Gangadhara Sastry, ITPFor Respondent: Shri. P. Suresh Rao, JCIT
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 2(22)Section 2(22)(e)

…आयकर अपील"य अ"धकरण, ‘’सी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘ C’ BENCH : CHENNAI "ी एन.आर.एस. गणेशन, "या"यक सद"य एवं "ी चं" पूजार", लेखा सद"य के सम" । [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER] आयकर अपील सं./I.T.A. No. 462/Mds/2013 "नधा"रण वष" /Assessment year : 2007-2008 Bharat Bir Mohindra, Vs. The Assistant Commissioner of No.3-E, Mnasarovar, Income Tax, Binny Road, Poes Garden Company Circle II(3) Chennai 600 006. Chennai. [PAN AAEPM 4105A] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant by : Shri. K. Gangadhara Sastry,…

DCIT, Cir-I, Kolkata vs. M/S the Hooghly Mills Co. Ltd., Kolkata

In the result the appeal by the revenue is dismissed

ITA 423/KOL/2014[2009-2010]Status: DisposedITAT Kolkata02 Jun 2017AY 2009-2010

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am]

For Appellant: Shri Niraj Kumar, CIT(DR)For Respondent: Shri S.Jhajharia, FCA
Section 143(3)Section 2Section 2(22)Section 2(22)(e)Section 2(32)

…section 2(22)(e ) refer to a shareholder who is both the ‘registered’ shareholder and the beneficial shareholder ?” It was held by the Special Bench as follows: “In view of the judgments of the Supreme Court in the cases of CIT v. C.P. Sarathy Mudalian [1972] 83 ITR 170 and Rameshwarlal Sanwarlal v. CIT [1980] 122 ITR 1/3 Taxman 1 (AP), it is clear that to attract the first limb of the provisions of section 2(22 )(e) the payment must be to a person who is a registered holder of shares. As already mentioned the condition under the 1922 Act and the 1961 Act regarding the payee being a shareholder remains the same a…

Late Ramesh Chand Goyal, New Delhi vs. ITO, New Delhi

In the result, the appeal is allowed in part for statistical purposes

ITA 1187/DEL/2014[2009-10]Status: DisposedITAT Delhi15 Feb 2017AY 2009-10

Bench: Sh. S.K. Yadav & Sh. O.P. Kantassessment Year: 2009-10 Vs. Income Tax Officer, Ward-24(4), Late Ramesh Chand Goyal Through L/H Smt. Manorma New Delhi Goyal, A-15/5, Vasant Vihar, New Delhi Pan : Aagpg7119L (Appellant) (Respondent) Appellant By Sh. M.L. Dua, Adv. Respondent By Sh. F.R. Meena, Sr.Dr Date Of Hearing 11.01.2017 Date Of Pronouncement 15.02.2017 Order Per O.P. Kant, A.M.:

Section 143(1)Section 143(2)Section 147Section 148Section 2(22)Section 2(22)(e)

…the provisions of Section 2(22)(e) are concerned, we have already extracted this provision and taken note of the conditions/requisites which are to be established for making provision applicable. In Commissioner of Income Tax Vs. C.P. Sarathy Mudaliar [1972] 83 ITR 170, the Supreme Court had traced out the assessee of this provision in the following manner: ―Any payment by a company, not being a company in which the public are substantially interest, of any sum (whether as representing a part of the assets of the company or otherwise) made after 31.05.19987 by way of advance or loan. First limb a) to a sharehold…

Jaidev R. Shroff, Mumbai vs. DCIT CC- 6(3) Earstwhile ACIT - CC-38, Mumbai

In the result, appeal of the assessee is allowed

ITA 4660/MUM/2015[2010-11]Status: DisposedITAT Mumbai09 Sept 2016AY 2010-11

Bench: Shri D. Karunakara Rao & Shri Amit Shuklajaidev R. Shroff, फनाभ/ Acit, Central Circle-38, Cd Marg, Khar (W), (After Restructuring New Vs. Mumbai – 400 052. Jurisdiction Dcit, Cc 6(3)), Mumbai. स्थामी रेखा सं./ Pan : Aalps9283N (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Rajnikant D. Shroff, फनाभ/ Acit, Central Circle-38, Uniphos House, 11Th Road, Mumbai. Vs. Cd Marg, Khar (W), Mumbai – 400 052. स्थामी रेखा सं./ Pan : Aalps9281Q (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Vikram R. Shroff, फनाभ/ Acit, Central Circle-38, Cd Marg, Khar (W), (After Restructuring New Vs. Mumbai – 400 052. Jurisdiction Dcit, Cc 6(3)), Mumbai. स्थामी रेखा सं./ Pan : Aaops8597C (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) फनाभ/ Sandra R. Shroff, Acit, Central Circle-38, Cd Marg, Khar (W), (After Restructuring New Vs. Mumbai – 400 052. Jurisdiction Dcit, Cc 6(3)), Mumbai. स्थामी रेखा सं./ Pan : Ahhps2731G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) ..

For Appellant: Shri Precy Pardiwala, Mr. JasFor Respondent: Shri N.P. Singh, DR
Section 115Section 143(3)Section 2(22)(a)Section 47Section 56(1)(viia)Section 56(2)(vii)

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Jaidev R. Shroff, फनाभ/ ACIT, Central Circle-38, CD Marg, Khar (W), (After restructuring new Vs. Mumbai – 400 052. jurisdiction DCIT, CC 6(3)), Mumbai. स्थामी रेखा सं./ PAN : AALPS9283N (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Rajnikant D. Shroff, फनाभ/ ACIT, Central Circle-38, Uniphos House, 11th Road, Mumbai. Vs. CD Marg, Khar (W), Mumbai – 400 052. स्थामी रेखा सं./ PAN : AALPS9281Q (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) Vikram R. Shroff, फनाभ/ ACIT, Cen…

DCIT 28(3), Navi Mumbai vs. S.R.M Agro Foods, Navi Mumbai

ITA 7397/MUM/2014[2011-12]Status: DisposedITAT Mumbai24 Aug 2016AY 2011-12
For Appellant: Shri Mitesh ThakkarFor Respondent: Shri N. Sathya Moorthy-DR
Section 2Section 2(22)(e)Section 22(22)(e)Section 254(1)

…in the case of UNIVERSAL MEDICARE P. LTD. [2010] 324 ITR 263does not require any reconsideration. The High Court 7397/M/2014-SRMAgroFoods merely restated the principle which remains unaltered throughout from the case of RAMESHWARLAL SANWARMAL v. CIT [1980] 122 ITR 1. The Supreme Court held that it is only where a loan is advanced by the company to the registered shareholder and other conditions set out in section 2(6A)(e) of the Indian Income-tax Act, 1922, are satisfied that the amount of the loan would be liable to be regarded as deemed dividend within the meaning of that provision. The loan granted to the b…

Asst.C.I.T., Hubli vs. M/S Bellad & Co, Hubli

In the result, the appeal filed by the revenue is dismissed

ITA 1029/BANG/2015[2010-11]Status: DisposedITAT Bangalore27 Jul 2016AY 2010-11

Bench: Shri Sunil Kumar Yadav & Shri Inturi Rama Raom/S.Bellad & Co., Vidyanagar, Hubli. … Appellant Pa No: Aabfb6457D Vs. Deputy Commissioner Of Income-Tax, Hubli. … Respondent & Asst. Commissioner Of Income-Tax, Circle 1(1), Hubballi. … Appellant Vs. M/S.Bellad & Co., Vidyanagar, Hubballi. … Respondent Assessee By : Shri C.R.Nulvi, Ca Revenue By : Shri C.N.Bipin, Jcit(Dr) Date Of Hearing : 04/07/2016 Date Of Pronouncement : 27/07/2016 O R D E R Per Inturi Rama Rao, Am : These Are Cross Appeals Filed By The Assessee As Well As The Revenue Directed Against The Order Of The Cit(A), Hubli, Dated 26/02/2015 For The Assessment Year 2010-11. Ita No.1004 & 1029/Bang/2015 Page 2 Of 13 2. Briefly Facts Of The Case Are As Under: The Assessee-Firm Is Engaged In The Business Of Dealers In Hmt Tractors, Spares, Hero Honda Motors-Cycles & Dealing In Sony Products & Also In The Business Of Generation Of Power Through Wind Mills. Return Of Income For The Assessment Year 2010-11 Was Filed On 30/09/2010 Declaring Income Of Rs.51,74,070/-. Against Said Return Of Income, Assessment Was Completed By The Acit, Circle 1(1), Hubli, Vide Order Dated 14/03/2013 Passed Under Section 143(3) Income-Tax Act, 1961 ['The Act' For Short] At A Total Income Of Rs.1,51,04,807/- After Making Several Disallowances. One Of Those Disallowances Relates To Expenditure Incurred On Renovation Of Showroom Of Rs.17,18,671/- Treating It Capital Expenditure Allowed Depreciation At 10%. He Also Made Addition Of Rs.29,02,161/- As Deemed Dividend Under Section 2(22)(E) Of The Act. The Ao Also Disallowed Deduction Under Section 80Ia(5) Of The Act As, According To The Ao, After Setting Off Of Brought Forward Loss, There Was No Eligible Profit For Deduction U/S 80Ia Of The Act.

For Appellant: Shri C.R.Nulvi, CAFor Respondent: Shri C.N.Bipin, JCIT(DR)
Section 143(3)Section 2(22)(e)Section 40Section 43BSection 80I

…y, the appellant is not a shareholder of M/s Countrywide Promoters Pvt. Ltd. It is trite law that the provisions of Section 2(22)(e) have no application to non-registered shareholders. The Hon'ble Apex Court in the case of CIT Vs. C.P. Sarathy Mudaliar (1972) 83 ITR 170 (SC) while construing the provisions of Section 2(6A)(e) of the Act, 1922 which are in pari materia with the provisions of Section 2(22)(e) of the Income-tax Act, 1961, held that the provisions governing the deemed dividend can be made applicable only in the hands of the registered shareholders. Since, admittedly, in the present case, the appellan…

M/S Bellad & Company, Hubli vs. DCIT, Hubli

In the result, the appeal filed by the revenue is dismissed

ITA 1004/BANG/2015[2010-11]Status: DisposedITAT Bangalore27 Jul 2016AY 2010-11

Bench: Shri Sunil Kumar Yadav & Shri Inturi Rama Raom/S.Bellad & Co., Vidyanagar, Hubli. … Appellant Pa No: Aabfb6457D Vs. Deputy Commissioner Of Income-Tax, Hubli. … Respondent & Asst. Commissioner Of Income-Tax, Circle 1(1), Hubballi. … Appellant Vs. M/S.Bellad & Co., Vidyanagar, Hubballi. … Respondent Assessee By : Shri C.R.Nulvi, Ca Revenue By : Shri C.N.Bipin, Jcit(Dr) Date Of Hearing : 04/07/2016 Date Of Pronouncement : 27/07/2016 O R D E R Per Inturi Rama Rao, Am : These Are Cross Appeals Filed By The Assessee As Well As The Revenue Directed Against The Order Of The Cit(A), Hubli, Dated 26/02/2015 For The Assessment Year 2010-11. Ita No.1004 & 1029/Bang/2015 Page 2 Of 13 2. Briefly Facts Of The Case Are As Under: The Assessee-Firm Is Engaged In The Business Of Dealers In Hmt Tractors, Spares, Hero Honda Motors-Cycles & Dealing In Sony Products & Also In The Business Of Generation Of Power Through Wind Mills. Return Of Income For The Assessment Year 2010-11 Was Filed On 30/09/2010 Declaring Income Of Rs.51,74,070/-. Against Said Return Of Income, Assessment Was Completed By The Acit, Circle 1(1), Hubli, Vide Order Dated 14/03/2013 Passed Under Section 143(3) Income-Tax Act, 1961 ['The Act' For Short] At A Total Income Of Rs.1,51,04,807/- After Making Several Disallowances. One Of Those Disallowances Relates To Expenditure Incurred On Renovation Of Showroom Of Rs.17,18,671/- Treating It Capital Expenditure Allowed Depreciation At 10%. He Also Made Addition Of Rs.29,02,161/- As Deemed Dividend Under Section 2(22)(E) Of The Act. The Ao Also Disallowed Deduction Under Section 80Ia(5) Of The Act As, According To The Ao, After Setting Off Of Brought Forward Loss, There Was No Eligible Profit For Deduction U/S 80Ia Of The Act.

For Appellant: Shri C.R.Nulvi, CAFor Respondent: Shri C.N.Bipin, JCIT(DR)
Section 143(3)Section 2(22)(e)Section 40Section 43BSection 80I

…y, the appellant is not a shareholder of M/s Countrywide Promoters Pvt. Ltd. It is trite law that the provisions of Section 2(22)(e) have no application to non-registered shareholders. The Hon'ble Apex Court in the case of CIT Vs. C.P. Sarathy Mudaliar (1972) 83 ITR 170 (SC) while construing the provisions of Section 2(6A)(e) of the Act, 1922 which are in pari materia with the provisions of Section 2(22)(e) of the Income-tax Act, 1961, held that the provisions governing the deemed dividend can be made applicable only in the hands of the registered shareholders. Since, admittedly, in the present case, the appellan…

Shri Anuj Gupta, Noida vs. ITO, New Delhi

In the result, the appeals filed by the respective assessee are partly allowed

ITA 698/DEL/2015[2006-07]Status: DisposedITAT Delhi26 Jul 2016AY 2006-07

Bench: Shri R.K. Pandaassessment Year: 2006-07 Anuj Gupta, Vs. Ito, B-106, Sector-2, Ward-19(3), Noida. New Delhi. Pan: Aajpg2385D Assessment Year: 2006-07 Pankaj Gupta, Vs. Ito, B-106, Sector-2, Ward-19(3), Noida. New Delhi. Pan: Aadpg5224D (Appellant) (Respondent) Assessee By : Shri Sudhir Dash, Ca Revenue By : Shri R.K. Gupta, Sr. Dr Date Of Hearing : 16.06.2021 Date Of Pronouncement : 07.07.2021 Order The Above Two Appeals Filed By The Respective Assessees Are Directed Against The Separate Orders Dated 23.12.2014 Of The Cit(A)-7, New Delhi Relating To Assessment Year 2006-07. Since Identical Grounds Have Been Taken By Both The Assessees, Therefore, These Were Heard Together & Are Being Disposed Of By This Common Order.

For Appellant: Shri Sudhir Dash, CAFor Respondent: Shri R.K. Gupta, Sr. DR
Section 143Section 143(1)Section 143(3)Section 147Section 148Section 2Section 2(22)(e)Section 234B

…e Act:- i) CIT vs. Creative Dyeing and Printing Pvt. Ltd., 318 ITR 476 (Del); ii) Pradip Kumar Malhotra vs. CIT, ITA No.219 of 2003 (Kolkata High Court); iii) CIT vs. Hindustan Petroleum Corporation Ltd., 187 ITR 1 (Bom) and iv) CIT vs. C.P. Sarathy Mudaliar, 83 ITR 170 (SC) 10. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 11. I have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find, shareholder holding 2…

Suresh Enterprises Private Limited, Hubli vs. ACIT, Hubli

In the result, the appeal filed by the assessee-company is allowed

ITA 1284/BANG/2015[2011-12]Status: DisposedITAT Bangalore20 Jul 2016AY 2011-12

Bench: Smt. Asha Vijayaraghavan & Shri Inturi Rama Raom/S.Suresh Enterprises Pvt.Ltd. Akshay Chabbi Corner, Akshay Centre, Gokul Road, Hubli. … Appellant Pa No.Aaccs4691 N Vs. Asst. Commissioner Of Income-Tax, Circle 3(1), Hubli. … Respondent

For Appellant: Shri S.Parthasarathi, AdvocateFor Respondent: Shri Sunil Kumar Agarwala, JCIT(DR)
Section 2(22)(e)

…y, the appellant is not a shareholder of M/s Countrywide Promoters Pvt. Ltd. It is trite law that the provisions of Section 2(22)(e) have no application to non-registered shareholders. The Hon'ble Apex Court in the case of CIT Vs. C.P. Sarathy Mudaliar (1972) 83 ITR 170 (SC) while construing the provisions of Section 2(6A)(e) of the Act, 1922 which are in pari materia with the provisions of Section 2(22)(e) of the Income-tax Act, 1961, held that the provisions governing the deemed dividend can be made applicable only in the hands of the registered shareholders. Since, admittedly, in the present case, the appellan…

Shiv Transport & Travels, Kolkata vs. ITO, WD-56(1), Kolkata

In the result, the appeal of the Assessee is allowed

ITA 889/KOL/2015[2007-2008]Status: DisposedITAT Kolkata03 Feb 2016AY 2007-2008

Bench: Hon’Ble Sri N.V.Vasudevan, Jm ] I.T.A No. 889/Kol/2015 Assessment Year : 2007-08

For Appellant: Shri Anil Kochar, AdvocateFor Respondent: Md.Gayas Uddin Ansari, JCIT, Sr.DR
Section 2(22)Section 2(22)(e)Section 2(32)Section 77A

…was settled principle of law that the deeming provision has to be construed strictly. The Hon’ble Allahabad High Court also referred to the decision in the case of Howrah Trading Co. Ltd. vs. CIT (1959) 36 ITR 215 (SC) and CIT vs. C.P. Sarathy Mudaliar (1972) 83 ITR 170 (SC). In the later decision, s. 2(6A)(e) of the Act, 1922 was under consideration, which was synonymous to s. 2(22)(e) of the IT Act, 1961. In the said case, members of HUF acquired shares in a company with the fund of the family. Loans were granted to HUF and the question was whether the loans could be treated as dividend income of the family fal…

M/S. Sonal Industries (P) Ltd., Meerut vs. ACIT, Meerut

In the result, the appeal of the assessee is allowed

ITA 4416/DEL/2014[2009-10]Status: DisposedITAT Delhi22 Dec 2015AY 2009-10
For Appellant: Sh. Ravindra Aggarwal, C.AFor Respondent: Sh.Sheodan Singh Bhadoria, Sr.DR
Section 143(3)Section 2Section 2(22)Section 2(22)(e)

…e revenue. 22. Insofar as the provisions of section 2(22)(e) are concerned, we have already extracted this provision and taken note of the conditions/requisites which are to be established for making provision applicable. In CIT v. C.P. SarathyMudaliar [1972] 83 ITR 170, the Supreme Court had traced out the assessee of this provision in the following manner : ITA No.4416/Del./2014 4 Sonal Industries Private Limited V ACIT circle-2 Meerut A Y 2009-10 "Any payment by a company, not being a company in which the public are substantially interest, of any sum (whether as representing a part of the assets of the compan…