TMI Blog2020 (7) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... cept the view taken by the CIT(A) that as the assessee company is not a shareholder in either of the aforesaid lender companies viz. (i). M/s Vrisa Creations Pvt. Ltd.; and (ii). M/s Sesha-sai projects Pvt. Ltd., therefore, the amount received from them could not have been brought to tax as deemed dividend within the meaning of Sec. 2(22)(e) in its hands. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [ 2020 (5) TMI 359 - ITAT MUMBAI ] - ITA No.4217/Mum/2016 C.O No. 174/Mum/2019 - - - Dated:- 9-6-2020 - Shri G. Manjunatha, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : S/shri V. Vinod Kumar, Udol Raj Singh, D.Rs For the Respondent : Shri Kishore B. Phadke, A.R ORDER PER RAVISH SOOD, JM The present appeal filed by the revenue is directed against the order passed by the CIT(A)-24, Mumbai, dated 24.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount received from M/s Sesha-sai Infraprojects Pvt. Ltd was concerned, it was claimed that the same was an advance that was received way back in the F.Y 2008-09 towards booking amount for the offices in a project developed by the assessee company. In the backdrop of its aforesaid claim, it was submitted by the assessee that the respective receipts could not be assessed in its hands as deemed dividend within the meaning of Sec. 2(22)(e) of the Act. However, the A.O was not persuaded to subscribe to the contentions advanced by the assessee. It was observed by the A.O that the shareholding pattern of the assessee company and the aforesaid lenders viz. (i). M/s Vrisa Creation Pvt. Ltd; and (ii). M/s Sesha-sai Infraprojects Pvt. Ltd. during the year under consideration was as under: (A). M/s Vrisa Infotech Pvt. Ltd (assessee company) (As on 31.03.2011) Sr. No. Name No. of shares Share Capital 1. Praveen Tulsiram Sankpal 9999 shares of 100 each ₹ 9,99,900/- 2. Rajshree Praveen Sankpal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-] as deemed dividend u/s 2(22)(e) of the Act, the income of the assessee was assessed at ₹ 6,04,79,060/-. 4. Aggrieved, the assessee inter alia assailed the addition made by the A.O u/s 2(22)(e) of the Act, before the CIT(A). It was observed by the CIT(A) that as the assessee company was not a shareholder in either of the lender companies viz. (i). M/s Vrisa Creations Pvt. Ltd.; and (ii). M/s Sesha-sai projects Pvt. Ltd., therefore, the receipt of the amounts by the assessee company would not be hit by the mischief of Sec. 2(22)(e) of the Act. Also, it was observed by the CIT(A) that though the assessee company might have received an advance from a company in which one of its shareholder holding not less than 10% equity shares was holding substantial interest, but then, as the assessee company was not a shareholder of the lending company, the provisions of Sdc. 2(22)(e) would not be attracted. The CIT(A) supported his aforesaid view by relying on the judgment of Hon ble High Court of Bombay in the case of CIT Vs. Impact Containers (P) Ltd. (2014) 367 ITR 346 (Bom) and ACIT Vs. Britto Amusement Pvt. Ltd. (2014) 360 ITR 544 (Bom). On the basis of his aforesaid observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of or for the individual benefit of a shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. As such, the dividend within the meaning of cl. (e) of Sec. 2(22) can only be brought to tax in the hands of the shareholder. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. Universal Medicare (P) Ltd. (2010) 324 ITR 263. In the totality of the facts of the case, we are inclined to accept the view taken by the CIT(A) that as the assessee company is not a shareholder in either of the aforesaid lender companies viz. (i). M/s Vrisa Creations Pvt. Ltd.; and (ii). M/s Sesha-sai projects Pvt. Ltd., therefore, the amount received from them could not have been brought to tax as deemed dividend within the meaning of Sec. 2(22)(e) in its hands. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. 7. The appeal filed by the revenue is dismissed in terms of our aforesaid observations. 8. We shall now advert to the cross-objections filed by the assessee, which are found to be merely supportive in nature. On a perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression ordinarily has been used in the said rule itself. This rule was inserted as a result of directions of Hon ble High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein it was inter alia, observed as under: We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment . In the rule so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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