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2018 (2) TMI 2043 - AT - Income TaxDisallowance of interest on secured loan and deducting the same from capital work-in-progress by AO - HELD THAT:- We find that the AO has not properly examined the nexus between inflow and outflow of liquidity. Therefore, we set aside the order of the CIT(A) and restore the matter to the file of the AO to examine the contentions of the appellant delineated and pass a de novo order, after giving reasonable opportunity of being heard to the appellant. We direct the appellant to file the relevant documents/evidence before the AO. As the matter has been set aside, the appellant may file the documents submitted before us as additional evidence before the AO. Thus the 1st ground of appeal is allowed for statistical purposes. Deemed dividend u/s 2(22)(e) - unsecured loans - HELD THAT:- As decided in NATIONAL TRAVEL SERVICES VERSUS COMMISSIONER OF INCOME TAX, DELHI, VIII [2018 (1) TMI 1159 - SUPREME COURT whole object of the provision is clear from the Explanatory memorandum and the literal language of the newly inserted definition clause which is to get over the two judgments of this Court referred to hereinabove. This is why "shareholder" now, post amendment, has only to be a person who is the beneficial owner of shares. One cannot be a registered owner and beneficial owner in the sense of a beneficiary of a trust or otherwise at the same time. It is clear therefore that the moment there is a shareholder, who need not necessarily be a member of the Company on its register, who is the beneficial owner of shares, the Section gets attracted without more. To state, therefore, that two conditions have to be satisfied, namely, that the shareholder must first be a registered shareholder and thereafter, also be a beneficial owner is not only mutually contradictory but is plainly incorrect. Also, what is important is the addition, by way of amendment, of such beneficial owner holding not less than 10% of voting power. We are prima facie of the view that the Ankitech judgment [2011 (5) TMI 325 - DELHI HIGH COURT] itself requires to be reconsidered, and this being so, without going into other questions that may arise, including whether the facts of the present case would fit the second limb of the amended definition clause, we place these appeals before the Hon'ble Chief Justice of India in order to constitute an appropriate Bench of three learned Judges in order to have a relook at the entire question. Disallowance of interest on unsecured loan and deducting the same from capital WIP - HELD THAT:- We find that the AO has not properly examined the nexus between inflow and outflow of liquidity. Therefore, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to examine the contentions of the appellant delineated and pass a de novo order, after giving reasonable opportunity of being heard to the appellant. We direct the appellant to file the relevant documents/evidence before the AO. As the matter has been set aside, the appellant may file the documents submitted before us as additional evidence before the AO. Thus the 1st ground of appeal is allowed for statistical purposes.
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