TMI Blog2015 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was rightly deleted by the CIT(A) following the decision of Hon’ble Jurisdictional High Court of Delhi in the case of CIT vs Ankitech (2011 (5) TMI 325 - DELHI HIGH COURT ).- Decided in favour of assessee. Addition on interest on PDCs paid out of books of account - CIT(A) deleted the addition - Held that:- From the order of the Tribunal in the case of Precision Infrastructure Pvt. Ltd. (2015 (2) TMI 105 - ITAT DELHI ), we note that the similar issue was decided in favour of the assessee wherein held as after examining the loose papers seized at the time of search at the assessee’s premises, it was noticed that interest is paid on the PDCs only during the period of extension of PDCs and, therefore, he directed the Assessing Officer to recompute the interest on PDCs at the time of extension of the PDCs. He has further observed that if it is not possible to work out the extension of PDCs in each case, then the Assessing Officer is directed to recompute interest on PDCs after six months from the date of issue of the PDCs. Therefore, the ground of appeal of the Revenue that the CIT(A) deleted the addition of ₹ 5,06,625/- made by the Assessing Officer on account of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. (a group company of the assessee) and was confirmed by the CIT(A). Ld. counsel further contended that in the assessee s appeal, the Tribunal dealt with the matter at length and concluded thus in para 10.10 on page 29 of assesse s paper book. The relevant operative part of the order of the Tribunal in the case of M/s Westland Developers for AY 2006-07 dated 22.8.2014 reads as under:- 10.10. We have also taken ourselves through the judgement of the Jurisdictional High Court in the case of CIT vs Industrial Engineering Projects Pvt. Ltd. (cited supra) which has been relied upon before us for the proposition that reimbursement of expenses cannot be treated to be a Revenue receipt. How the judgement of the Apex Court in Tuticorin Alkali Chemicals Fertilizers is applicable to the facts of the present case has not been set out in the order of the authorities nor has the Ld. DR been able to address the applicability of the said judgement to the issue at hand. We have taken ourselves through the said judgement and seen that it proceeds on entirety different facts and circumstances and has no applicability to the facts of the present case. Consequently, it is seen that from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/- made by the AO in view of the provisions of section 2(22)(e) of the Income Tax Act, 1961 on account of deemed dividend. Ld. DR submitted that the impugned order may be set aside by restoring that of the AO on this issue. Ld. counsel of the assessee supporting the impugned order submitted that to invoke provisions of section 2(22)(e) of the Act, it is mandatory for the AO to establish that the assessee is a registered shareholder of payer company, then the impugned amount cannot be taxed in the hands of the assessee u/s 2(22)(e) of the Act. Ld. counsel placed reliance on the decision of Hon ble Jurisdictional High Court of Delhi in the case of Ankitech (P) Ltd. (2011) 11 taxman.com 100 (Delhi) and submitted that the issue is squarely covered in favour of the assessee by this judgement of Hon ble High Court. 7. On careful consideration of above submissions, we note that the CIT(A) granted relief to the assessee with following observations and conclusion:- The Hon'ble High Court of Delhi in the case of CIT vs. Ankitech (P) Ltd. [20 11] 11taxman.com 100 (Delhi) has held as under in para 25 of the judgment. Further, it is an admitted case that under normal circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act treating the loan and advance as deemed dividend are established in these cases. Therefore, it would always be open to the revenue to take corrective measure by treating this dividend income at the hands of the shareholders and tax them accordingly. As otherwise, it would amount to escapement of income at the hands of those shareholders. The Hon'ble Delhi High Court has followed the decision in the case of Ankitech (supra) in the following recent judgment dated 21.11.2011: I. CIT vs. Navyug Promoters Pvt. Ltd. (2011) 16 Taxmann.com 292 (Delhi) 2. CIT vs. MCC Marketing Pvt. Ltd. (2011 )16 Taxmann.com 411 (Delhi) The gist of the above judgment is that deemed dividend u/s 2(22) (e) can be taxed only in the hands of the person who is a shareholder/member of the, payer company. 3.7 Respectively following the decisions of the jurisdictional High Court cited supra, it is held that the amount of ₹ 16, 85,489/- is not taxable as deemed dividend in the hands of the appellant u/s 2(22) (e) as the appellant is not a shareholder or member of M/s Payor Companies. Therefore this ground is allowed and the said addition is deleted. 8. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards order of the ITAT Delhi C Bench dated 9.1.2015 in ITA No. 2542/Del/2013 for AY 2008-09 in the case of ACIT vs M/s Precision Infrastructure Pvt. Ltd. and submitted that in similar set of facts and circumstances in the case of group company of the assessee, the issue of post dated cheques (PDC) was decided in favour of the assessee, therefore, the issue is squarely covered and CIT(A) was right in granting relief for the assessee. Ld. DR strongly supported the assessment order and the observations made by the AO. However, ld. DR could not show us any order or other facts to show that the order of the Tribunal (supra) in the case of Precision Infrastructure Pvt. Ltd. has been modified or set aside. 15. From the order of the CIT(A), we observe that the CIT(A) granted relief for the assessee with following conclusion:- Learned AR has been maintaining all along that interest is not paid as all the receipts are only memorandum only. Analysis of these above seized document reveals that these seized documents definitely proves that interest is paid on PDCs. Various voucher in seized documents conclusively proves that the recipient has signed on voucher for receipt of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Promoters Ltd. or in stray case by some other companies. Assessing Officer has applied the case of Eusuf Ali for applying interest on PDCs for all companies of BPTP Group for all Assessment Year under consideration. Ld AR has tried to differentiate the above cited case on facts. In my view, as interest payment on extension of period of PDCs are established on numerous seized document. A trend is established for the group as the overall management is controlled by one person Shri Kabul Chawla and activities of all companies are interrelated. If it is not possible to work out the extension of PDCs in each case then A.O. is directed to recompute interest on PO s after ix months from date of issue of PDCs i.e. date of sale, as six months is taken a reasonable period for giving PDCs a per sale deed. This view is formed on the basis of the statement of Sh. Chhotu Ram which says that normally PDCs are given for 8 to 10 months. Further Ld AR has also submitted few Sale Deed in respect of some of seized record in the case of Ramvati Beero etc where the interest working is made after 9/ 15 months. Taking these facts into consideration. It would be proper to compute interest afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) in this regard and accordingly, we reject ground No. 1 of the Revenue s appeal 8. Since, the facts of the present case are similar to the facts involved in the aforesaid referred to the case. So, respectfully ITA No. 2542/Del/2013 Precision Infrastructure (P) Ltd. 11 following the order dated 31.10.2014 in ITA Nos. 1674/Del/2013 1765/Del/2013 for the assessment year 2008- 09 in the case of sister concern of the assessee viz. M/s IAG Promoters and Developers Pvt. Ltd., we do not see any valid ground to interfere with the findings given by the ld. CIT(A) and accordingly do not see merit in this appeal of the department. 17. In view of above, we observe that the facts and circumstances of the present case are quite similar to the facts involved in the case of Precision Infrastructure Pvt. Ltd. (supra), therefore, respectfully following the order of the Tribunal dated 9.1.2015 in the case of Precision Infrastructure (supra), we are unable to see any infirmity, perversity or any other valid reason to interfere with the conclusion of the CIT(A) and hence ground no.1 of the revenue being devoid of merits is dismissed. Ground No. 2 18. Apropos ground no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance could be made. He however, gave certain directions to quantify the disallowance to be made. As per these directions while giving appeal effect the entire claim of ₹ 20,09,701/- is to be allowed. 7.1 He further submitted that the contention in Ground No. 4 however, is that the assessee having not claimed the expenditure, the same cannot be disallowed. Similar disallowance was made in the case of Westland Developers Pvt. Ltd for the AY 2006-07 and was partly confirmed by the CIT(A). The Hon'ble Tribunal vide order referred to supra deleted the addition vide para 13 passed in ITA No.1752/Del2/013 in the case of Westland Developers Pvt. Ltd. vs. ACIT (Page 67 of the Paper Book). Copy of the ITAT order is at page 34-68 of the PB. For the sake of convenience ITA NOS.1532 1756/Del/2013 6 the issue raised in Ground No. 3 and finding of the Tribunal in Para 13 of the said order is reproduced as under:- 13. We have heard the rival submissions and perused the material available on record. The case law relied upon by the parties has been taken into consideration. On a consideration of the same we are of the view that since in the facts of the present case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable with us specially the impugned order passed by the Revenue Authorities; Paper Book filed by the assessee, we find considerable cogency in the contention of the ld. Counsel of the assessee that the issue raised in ground no. 4 is squarely covered by the Order dated 22.8.2014 of the ITAT, Delhi H Bench passed in ITA No. 1752/Del/2013 (A.Y. 2006-07) in the case of M/s Westland Developers Pvt. Ltd., vs. ACIT wherein the Tribunal held that Ground No. 3 on the facts available on record considering the judicial precedent referred to in detail wile deciding Ground NO. 4 has to be decided in favor of the assessee. Respectfully following the precedent as aforesaid, we allow this ground of the assessee. 20. In view of above, respectfully following the order of the Tribunal (supra), we are inclined to hold that the CIT(A) was justified in granting relief to the assessee and we are unable to see any infirmity, perversity or any other valid reason to interfere in the order of the CIT(A). Accordingly, ground no. 2 is dismissed. 21. In the result, the appeals of the revenue in ITA No. 1590/D/2013 ITA No. 4064/Del/2013 are dismissed and appeal of the assessee in 1763/D/2013 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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