TMI Blog2019 (1) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-company. Section 2(22)(e) does not extend the meaning of the term ‘shareholders’ and that the loan so granted could not be taxed as dividend income in the hands of the recipient company who was not the shareholder of the lender company. On a plain reading of the provisions of Section 2 (22)(e) of the Act, no other conclusion can be reached to make the addition - decided in favour of assessee - I.T.A. No.5083/Mum/2017 - - - Dated:- 2-1-2019 - SHRI PAWAN SINGH, JM AND AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : Rajesh P.Shah - Ld.AR For The Revenue : S.Abirama Karthikeyan, Ld. DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 075/Mum/2013 dated 05/12/2018], which has been authored by one of us, and submitted that the aforesaid decision of Hon ble Apex Court was not applicable to the facts of the present case. The Ld. DR placed reliance on the stand of lower authorities. 4. We have heard the rival contentions and perused relevant material on record. It is undisputed fact that the two corporate entities do not hold beneficial interest in each other and do not have any direct shareholding rather these entities have one common shareholder holding more than 20% in each of these entities. The loan / advance is between the assessee and the other corporate entity. After careful consideration, we find that identical issue came for consideration before co-ordinate ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not the shareholder of the lender company. 6. The decision of Hon ble Apex Court rendered in Gopal Sons HUF Vs CIT [2017-TIOL-02-SC-IT] as relied upon by revenue has duly been considered by Hon ble Madras High Court in its decision rendered in CIT Vs. Ennore Cargo Container Terminal Private Limited [2017-TIOL-695-SC-MAD-IT] wherein Hon ble Court has distinguished the same by observing as under:- 4.2 The Revenue seeks to assess as income the capital advance received by the assessee-company from Indev Logistics Pvt. Ltd. on the ground that it is deemed dividend received by the assessee-company for the benefit of the registered shareholder. For this purpose, the provisions of Section 2(22)(e) of the Income-tax Act, 1961 (in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises in the present matter. The question of law which the Supreme Court was called upon to consider was whether loans and advances received by a HUF could be deemed as a dividend within the meaning of Section 2(22)(e) of the Act. The assessee in that case was the HUF and the payment in question was made to the HUF. The shares were held by the Karta of the HUF. It is in this context that the Supreme Court came to the conclusion that HUF was the beneficial shareholder. 5.2 In the instant case, however, both the registered and beneficial shareholders are two individuals and not the assessee-company. Therefore, in our view, the judgment of the Supreme Court does not rule on the issue which has come up for consideration in the instant mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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