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TMI Blog2012 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... - RS. 75,864/- 1. The Ld. CIT(A) has erred in law and on facts in confirming the disallowance on account of depreciation on electric fittings amounting to Rs.75,864/- by following the decision of his Predecessor in appellant's own case for A.Y. 2005-06. 2.1. In this regard, we have been informed that the assessee has claimed depreciation on Electric fitting at 15%, however, as per Assessing Officer, the depreciation of electric fitting is allowable only @10%. This very issue had come up in the past for A.Y. 2005-06 and the Respected Co-ordinate Bench ITAT "B" Ahmedabad titled as Troikaa Pharmaceuticals Ltd. vs. Asst. CIT bearing ITA No.1592/Ahd/2008 vide order dated 09/07/2010 has restored the matter back to the file of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : II. ADDITION ON ACCOUNT OF DEEMED DIVIDEND - Rs.1,22,260/- 1. The Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.1,22,260/- on account of deemed dividend. 2. The appellant submits that the provisions of section 2(22)(e) i.e. Deemed dividend is applicable when a shareholder takes loans and advances from the company (not being a company in which public are substantially interested). 4.1. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T.Act, 1961 dated 26/12/2008 were that M/s. Troikaa Exports Pvt.Ltd. had given loan to the assessee, i.e. Troikaa Pharmaceuticals Ltd. That loan was given during the Financial Year under consideration. It was noted by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any payment by a company to any concern in which such shareholder is a Member or in which he has a substantial interest. According to Assessing Officer, the provisions of section 2(22)(e) have application on fulfillment of the conditions, namely where a payment has been made after 31.5.1987 by a closely held company to a shareholder, who is beneficial owners of shares holding not less than 10% of the voting powers or, the other conditions is, that any concern in which such shareholder is a Member or a Partner and in which such shareholder has a substantial interest. He has, therefore, held that since S/Shri Ketan R Patel and Milan R.Patel have more than 20% share holding in both the companies, therefore, the loans and advances given by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 865 (Mumbai S.B.) 6.1. From the side of the Revenue, ld.Sr.DR Mr.Samir Tekriwal has placed reliance on the orders of the authorities below. He has mentioned that in a latest decision of National Travel Services reported at 202 Taxman 32 (Del.) the question of beneficial owner was decided and since the assessee being a beneficial owner of the said company and the Directors are common, therefore disallowance was rightly made. 7. Having heard the submissions of both the sides, we are of the view that the latest decision of Ankitech (P) Ltd. 242 CTR 129 (Del.) has held that, reproduced from the conclusion. "It is the definition of dividend which is enlarged by the deeming provision of s.2(22)(e) and not that of "shareholder" and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking section 2(22)(e), "such shareholder" in the concern to which loan is advanced must both be a registered shareholder as also a beneficial shareholder. It was held that the loan obtained by assessee-company in the "N" Trust had 20% share holding from a company in which "N" Trust had 10% share holding, could not be taxed as deemed dividend u/s.2(22)(e) since "N" Trust was only a registered shareholder and not a beneficial shareholder. Following these decisions, we are of the considered opinion that the criteria in which deemed dividend income is to be taxed in the hands of the assessee did not qualify, hence the view taken by the Revenue is hereby reversed and the addition thus stands deleted. 8, In the result, the appeal of the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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