TMI Blog2011 (10) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... es the word "shareholder" and does not in any way alter the position that the shareholder has to be a registered holder not substitutes the requirement of merely holding a beneficial interest in shares without being a registered holder of shares. If a person is a registered shareholder but not the beneficial shareholder then the provisions of Section 2(22)(e) will not apply. Similarly, if a person is a beneficial shareholder but not a registered shareholder then also the first limb of provision of Section 2(22)(e) will not apply. In the present appeal, the assessee company is not a registered holder of shares, therefore, the provisions of Section 2(22)(e) would not be applicable at all to the case of the assessee firm. In view of CIT v. Hot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable for the subject transactions. 3(a) That, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 88,134/-, made by the ld. Assessing Officer, by making disallowance out of petrol expenses claimed by the appellant. (b) That without prejudice to the above, the ld. CIT(A) grossly erred in confirming the impugned addition without considering the material fact that the entire petrol expenses were incurred by the appellant firm wholly and exclusively for the purpose of its business only and therefore, there was no justification for ld. Assessing Officer in making the adhoc disallowance merely on guess work, conjectures and surmises." 2. During hearing, we have heard Shri Anil Kamal Garg, Ld. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Makhija Projects Pvt. Ltd. advanced loan to assessee firm out of its accumulated profit and also that lending of money was not the part of the business of this company, consequently, he treated the loan amount as deemed dividend u/s 2(22)(e) of the Act. On appeal, the ld. CIT(A) affirmed the stand of the ld. Assessing Officer which is under challenge before this Tribunal. Now question arises whether the loan, so received, attracts Section 2(22)(e) of the Act. The case of the assessee is squarely covered by the decision of Asstt. CIT v. Bhaumik Colour (P.) Ltd. [2009] 18 ITD 1 (Mum) (SB). The assessee must be both registered as well as beneficial shareholder of the company from whom loan is recieved. Before us, it is a case of a partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m as loans or advances to the shareholders or to a concern in which such shareholders has a substantial interest or make any payment on behalf of or for the individual benefit of such shareholder. In such an event, by the deeming provisions, such payment by the company is treated as dividend. The provision contemplates a charge to tax in the hands of the shareholders and not in the hands of a shareholder viz. the concerns. The ordinary and natural meaning of the term dividend would be a share in profit to an investor in the share capital of a limited company. If the definition of "dividend" is extended to a loan or advance to a non-shareholder, the ordinary and natural meaning of the word dividend is taken away. Deemed dividend u/s 2(22)(e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - claimed under the head "Petrol Expenses". These expenses were claimed for the purpose of business. The gross contract receipts of the assessee are to the tune of Rs. 3,14,76,642/- which amounts to 0.77%. The Ld. Counsel for assessee claimed that for assessment year 2006-07, the assessee claimed expenditure of Rs. 3,15,543/- on the gross receipt of Rs. 6,41,16,615/- which comes to 0.49%. It was claimed that there is an increase in expenditure under this head by 0.28%. Keeping in view the totality of facts and to meet the end of justice, we direct the Assessing Officer to disallow 10% on account of non-verification of vouchers/bills etc. out of total claim of Rs. 3,33,993/- as agreed by the Ld. Counsel for assessee, therefore, this ground i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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