TMI Blog2014 (8) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhaumik Colour P. Ltd.,[2008 (11) TMI 273 - ITAT BOMBAY-E ]. Respectfully following the same, we delete the addition and reverse the orders of the lower authorities. - Decided in favour of assessee. - I.T.A No.1729/Kol/2011 - - - Dated:- 1-8-2014 - SHRI P. K. BANSAL, AM SHRI MAHAVIR SINGH, JM] For the Appellant: Shri S. Jhajaria, FCA Shri S. Sen, Advocate For the Respondent: Shri Ravi Jain, CIT, DR ORDER Per Shri Mahavir Singh, JM : This appeal by assessee is arising out of order of CIT(A), Central-I, Kolkata in Appeal No. 258/CIT(A),C-1/CC-VII/10-11 dated 24.11.2011. Assessment was framed by DCIT, CCVII, Kolkata u/s. 263/251/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as having beneficial interest therein or not and in case assessee is registered s shareholder but not the beneficial shareholder provisions of section 2(22)(e) will not apply as held by Special Bench, ITAT, Mumbai in Bhaumik Colour Pvt. Ltd. (supra) and in this case the appellant company having filed all evidences that the appellant company was registered share holders of only 10,99,300 Shares of M/s. Mega Resources Ltd. (MRL) out of total paid up shares of MRL being 1,20,00,000 shares and your petitioner being registered share holders of less than 10% in MRL, provisions of section 2(22)(e) will not apply and all evidences in this regard having been produced before the AO and the CIT(A), the AO as well as CIT(A) were wholly unjustifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,300 shares out of 1,20,00,000 equity shares issued. In support of the stand the assessee has filed a certificate from Mega Resources Ltd. to the effect that the assessee holds only 10,99,300 shares. The undated certificate does not say as to what date such holding relates to and also what is the total paid up share in relation to which the assessee holds 0,99,300 equity share. We have already seen that the assessee holds 13,99,100 shares out of paid up shares numbering 1,20,00,000. Hence, the holding being more than 10%, the Assessing Officer should have assessed the loan of 11,87,00,000 as deemed dividend. In the result the order passed by the Assessing Officer, as discussed above, was erroneous and prejudicial to the interests of revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d claimed that as per such shareholders register, the assessee company was holding on 1099300 no. of shares as registered shareholder. The total share capital of MRL was 1,20,00,000 no. of equity shares. Thus, the assessee company was holding only 9.16% of the total share capital of MRL. Since the total registered and beneficial shareholding of the company was less than 10% the provision of section 2(22)(e) was not applicable to the assessee company. Though the share holding as per share holders register is found to be 1099300 but we have already seen from the Balance Sheet of the assessee company for the year ended 31.3.05 that the assessee holds 13,99,100 no. of shares out of paid up shares numbering 1,20,00,000. Hence the holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The share holding of M/s Mega Recourses Ltd. as on 31.03.2004 was also 13,99,100/ and no share transaction of the shares of M/s Mega Recourses Ltd has been carried out during the year. Moreover even during the course of assessment proceeding unit wise balance sheet was filed and in the same the share holding of 13,99,100/ shares in M/s Mega Recourses Ltd has been duly declared. Here it may be mentioned that the number of share holding also represent the amount invested by the assessee company in shares of particular company and if the share holding was only 1099300 the corresponding figure of the amount invested should also be much lower figure. Further if there was mistake in both the figures, the balance sheet of the assesses company will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, the questions referred to the Special Bench are answered as follows: On the first question: Deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder. On the second question: The expression shareholder referred to in section 2(22)(e) refers to both a registered shareholder and beneficial shareholder. If a person is a registered shareholder but not the beneficial shareholder than 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 provisions of section 2(22)(e) will not apply. From the above facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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