TMI Blog2014 (7) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pure Drinks (New Delhi) Ltd. is not the shareholder of the assessee (company) ignoring the fact that payment to this entity is very much covered by the definition of ‘dividend’ u/s 2(22)(e) of the Act - Revenue has failed to controvert the findings of CIT(A) on the issue – thus, there was no infirmity in the order of CIT(A). Assessee has also been able to prove that the provisions of section 2(22)(e) of the Act are not applicable in as much as both the conditions of a shareholder holding 10% shares in the payer company and more than 20% beneficial stakes in the payee entity do not exist - since the payments have been made to Statutory authorities for meeting the liabilities of the payee company Pure Drinks (New Delhi) Ltd. - the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) has held that this is not a case which is hit by the provisions of Section 2(22)(e) read with Section 194 of the Act. The CIT(A) has also held that the proceedings initiated under Section 201(1)/201(1A) of the Act were barred by limitation in all the three years by following the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. NHK Japan Broadcasting Corporation [2008] 305 ITR 137 (Delhi) and CIT Vs. Hutchison Essar Telecome Ltd. [2010] 323 ITR 230 (Delhi). Now, the Revenue is in appeal before us by taking the following grounds of appeal:- 1. Holding that the relevant payments could not be treated as deemed dividend in view of the fact that no income on account of deemed dividend has been assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as after eleven years from the FY 1999-2000. When the Additional Commissioner of Income Tax, Range-49, New Delhi initiated proceedings, the assessee took a plea that in view of the decision of Hon'ble Jurisdictional High Court in the case of NHK Japan Broadcasting Corporation (supra), the proceedings have got time barred. The learned Additional CIT took a view that since Department has gone in SLP against the judgment of Hon'ble Delhi High Court cited supra, therefore, to keep the matter alive, the contention of the assessee with regard to proceedings barred by limitation was rejected. The CIT(A) has granted the relief by relying on the decision of Hon'ble Jurisdictional High Court (supra), wherein Hon ble High Court observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove that the provisions of section 2(22)(e) of the I.T. Act are not applicable in the present case in as much as both the conditions of a shareholder holding 10% shares in the payer company and more than 20% beneficial stakes in the payee entity do not exist in the present case as clarified in the chart given above. Further since the payments have been made to Statutory authorities for meeting the liabilities of the payee company Pure Drinks (New Delhi) Ltd., the transactions have not resulted in any benefit to any of the shareholders of the company. Admittedly, in the case of deemed dividend the provisions of section 194 are applicable. However, no such proceedings had been initiated in the normal assessment proceedings for the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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