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M/s. Periwinkle Fashions Pvt. Ltd. Versus Dy. Commissioner of Income Tax-8 (2) , Mumbai

2015 (8) TMI 1261 - ITAT MUMBAI

Deemed dividend addition U/S 2(22)(e) - Held that:- Based on the judgement of CIT vs. Universal Medicare Pvt. Ltd.(2010 (3) TMI 323 - BOMBAY HIGH COURT ) is liable to be upheld, thereby resulting in deletion of an addition in the hands of the assessee company. Accordingly direct the Assessing Officer to delete the addition made in the hands of the assessee on the ground that such dividend could not be taxed in the hands of the assessee as it is not a shareholder in M/s. Tainwala Holdings Pvt. Lt .....

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short the Act ) pertaining to assessment year 2003-04. 2. In this appeal, the assessee has raised the following grounds of appeal:- 1. Against addition of ₹ 905,515/- as deemed dividend U/S 2(22)(e) of the Income-tax Act, 1961 (Act). The Commissioner of Income-tax (Appeals) -17, Mumbai [hereinafter referred to as CIT (A)] has erred in upholding the addition of ₹ 905,515/ - made by the Assessing Officer ('AO') u/s 2(22)(e) of the Act ignoring the facts of the case. The CIT (A) .....

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ce, the provisions of section 2(22)(e) of the Act are not attracted. 2. Against addition of ₹ 28,74,875/- as deemed dividend U/S 2(22)(e) of the Act (i) The CIT (A) has erred in upholding an addition of ₹ 1,55,61,902/- (restricted to profits as on 31st March, 2010 ₹ 28,74,875/-) made by the AO without considering the facts of the case. The CIT (A) should have appreciated that the said sum of ₹ 1,55,61,902/ - represents following: a. ₹ 12,011,902/- represents mere tr .....

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s been received by the appellant from THPL during the year. (ii) The CIT(A) failed to appreciate that the additions u/s. 2(22)(e) of the Act should be restricted to the accumulated profits as on the date of receipt of loan/advance and not as at 31st March 2010. The appellant humbly prays that the impugned addition made by the CIT(A) be deleted, in the interest of natural justice. 2. The appellant before us is a company incorporated under the provisions of the Companies Act, 1956 and is inter-ali .....

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377; 37,80,390/-, which was added in the hands of the assessee company as deemed dividend within the meaning of section 2(22)(e) of the Act. The said addition has also been sustained by CIT(A); and, accordingly, assessee is in further appeal before us. 3. The addition of ₹ 37,80,390/- is comprising of two limbs, namely, a sum of ₹ 9,05,515/- purported to have been received from M/s. Tainwala Trading & Investment Company Ltd.; and, a sum of ₹ 28,74,875/- representing amount .....

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