TMI Blog2017 (12) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... For The Appellant : Shri Mudit Nagpal, Sr.DR For The Respondent : Shri S.N.Soparkar with Shri Parin Shah, ARs ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal by the Revenue is directed against the order of the Commissioner of Income Tax(Appeals)-1, Ahmedabad [CIT(A) in short] dated 03/03/2015 in the matter of assessment order dated 30/12/2011 passed by the AO s.143(3) rws 147 of the Act relevant to Assessment Year (AY) 2004-05. 2. The grounds of appeal raised by the Revenue read as under:- The CIT(A) has erred in law and on facts by deleting the addition of ₹ 1,99,78,921/- towards deemed dividend u/s.2(22)(e) despite the fact that the advance given by Cadila Pharmaceuticals Ltd. to ass compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f us are party to the aforesaid decision) dealing with the issue in assessee s own case is reproduced hereunder for the sake of ready reference. 6. The short controversy in the present case is whether the assesseecompany can be taxed towards the loans/advances received from the lender by virtue of deeming fiction under s.2(22)(e) of the Act where the assesseecompany itself is not a shareholder of the lending company, notwithstanding the fact that both the companies (lender-company and assessee-company) had common shareholders having substantial interest in both the companies. 6.1 As observed by the Hon ble Supreme Court in the case of Gopal And Sons (HUF) vs. CIT (Supreme Court) in Civil Appeal No. 12274 of 2016 arising out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder having substantial interest in both the companies. For this proposition, the CIT(A) relied upon certain judicial precedents as noted in the operative para quoted above. 6.3. We find that the legal fiction in section 2(22)(e) enlarges the definition of dividend but does not extend to or broaden the concept of a shareholder . As the assessee is not a shareholder of the lender-company, the receipt is not susceptible to tax under s.2(22)(e) in its hands in view of long line of judicial precedents including Baumik Colour Pvt.Ltd. 313 ITR 146 (Bom)[SB] approved in Universal of Medicare 324 363 (Bom) and CIT vs. Impact Containers (P) Ltd. (2014) 367 ITR 346 (Bom). In view of the judicial precedents governing the issue, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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