TMI Blog2017 (1) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2016 passed by the learned Income Tax Appellate Tribunal, Ahmedabad B Bench, Ahmedabad passed in 2191/AHD/2011 for AY 200708, the Revenue has preferred present Tax Appeal with the following proposed question of law. Whether Appellate Tribunal was right in law and on facts in not appreciating the facts contained in assessment order in holding that the assessee company is not a share holder in Mahavir Rolling Mills Pvt Ltd and no addition could be made u/s 2(22)(e) of the Act, as deemed dividend ? 2.0. The facts leading to the present Tax Appeal in nutshell are as under: 2.1. That the assessee company is engaged in the business of Ship Breaking filed its return of income for AY 200708 declaring total income at ₹ 47,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and no addition could be made u/s 2(22)(e) of the Act, as deemed dividend? 3.0. Shri Manish Bhatt, learned counsel for the revenue has vehemently submitted that as one Shri K.K. Bansal who was one of the Director of the company having substantial holding in the company and the assessee has paid interest to the said Shri K.K. Bansal of ₹ 17,55,132/, the learned Assessing Officer rightly made the addition on account of deemed dividend. It is submitted that therefore, the learned Tribunal has materially erred in deleting the addition made by the Assessing Officer made on account of deemed dividend. Shri Manish Bhatt, learned counsel for the Revenue has heavily relied upon Section 2(22)(e)of the Income Tax Act. 4.0. Heard Shri M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the aforesaid. If the contention on behalf of the revenue is accepted, in that case, it will be creating the third category / class, which is not permissible. What is provided under Section 2(22) (e) of the Act seems to be that the assessee-Company must be a shareholder in the Company from whom the loan or advance has been taken and should be holding not less than 10% of the voting power. It does not provide that any shareholder in the assessee-Company who had taken any loan or advance from another Company in which such shareholder is also a shareholder having substantial interest, Section 2(22)(e) of the act may be applicable. 5.1. Considering the aforesaid decision of the Division Bench of this Court and the facts narrated herein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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