TMI Blog2019 (3) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... al, VP And Shri Partha Sarathi Chaudhury, JM Assessee by: Shri Sanket Joshi Revenue by: Shri M.K. Verma ORDER Partha Sarathi Chaudhury, These appeals preferred by the Revenue emanates from the order of the Ld. CIT(Appeals)-2, Nashik dated 02.01.2017 in separate orders for the assessment years 2008-09, 2009-10 and 2011-12 as per grounds of appeal on record. That for all the assessment years, the Revenue has challenged deletion of addition in respect of deemed dividend u/s.2(22)(e) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. These cases were heard together. Since issues common and facts are similar, these cases are being disposed of vide this consolidated order. For the sake of convenience, we would take up ITA No.789/PUN/2017 as lead case. 3. With regard to the issue, during First Appellate Proceedings, the Ld. CIT(Appeals) has held as under: 9.3 I have carefully considered the facts of the case and rival contentions. I find that the identical issue has been considered by me in the appellate order dated 30/06/2016 passed in appellant s own case for A.Y.2012-13. After detailed discussions, the above issue has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the above contention. 10.2 I find that similar issue came up for consideration before Honourable Calcutta High Court in the case of Pradeep Kumar Malhotra v. CIT [(2011)338 ITR 538]. In that case, the assessee had allowed the company [wherein he was a substantial shareholder] to mortgage his property for acquiring loan from bank. When the assessee was in need of funds, he approached the company to release the mortgage or purchase the property. The company was unable to do either of the two and hence, it advanced loan to the assessee. The AO treated the same as deemed dividend u/s 2(22)(e) of the Act. Honourable ITAT upheld the action of the AO. and the assessee carried the issue before Honourable High Court. Honourable Court held that the provisions of section 2(22)(e) are attracted only in cases where the loan given by the company is in the nature of gratuitous loan advanced only because of the fact of the assessee being a substantial shareholder. The Court held that the loans given for any further consideration cannot be treated as deemed dividend within the meaning of section 2(22)(e). The 'Head Notes' of the above decision are reproduced hereunder: ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the same view has been reiterated by various Honourable Tribunals by following the above decision of Honourable Calcutta High Court. I find that similar issue had come up for consideration before Honourable ITAT, Chennai in the case of ACIT v. Smt. G. Sreevidya reported at 138 ITD 427. In that case, the company had made advances to the assessee which were treated as deemed dividend u/s 2(22)(e) by the AO. The assessee contended that she had offered collateral security and personal guarantee for the purposes of raising loan for the company. It was submitted that at the time of extending security, it was mutually agreed that the company would lend funds to the assessee as and when required by her and that it was in this background that the company had made advances to the assessee. The CIT(A) deleted the addition by holding that such advances made out of commercial expediency did not fell within the ambit of 'loan or advances' as specified in section 2(22)(e). The Revenue challenged the said decision before Honourable ITAT. Dismissing the appeal of the Revenue, Honourable ITAT held as under: '7. In order to attract the provisions of section 2(22)(e), the important ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CIT Vs. Creative Dyeing Printing P. Ltd. reported as 318 ITR 476(Del). In the instant case also the assessee was allowed to withdraw funds from the company as per requirement for personal purposes against the personal guarantee and the collateral security given by her to facilitate her availing of credit facility of the company. 9. It is a well settled law 'that loan or advance given to a shareholder by a company in which public is not substantially interested and which had accumulated profits, the amount advanced as loan to such shareholder is deemed to be dividend as per the provisions of section 2(22)(e) of the Act. However, the facts and circumstances of each case have to be scrutinized before applying the ratio of the cases holding above well settled law. In the facts and circumstances of the instant case, judgments relied upon by the DR in the cases of Sarada P.(supra), P.K. Abubucker (supra) and TarulauiShyam (supra) are not applicable. 10.4 I find that following the above two decisions of Honorable Calcutta High Court and Honorable ITAT, Chennai, Honorable Amritsar Tribunal has also decided the issue in favour of the assessee and against the Revenue, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2012-13 and the Ld. CIT(Appeals) in that case of the assessee after placing reliance on the decision of the Hon'ble Calcutta High Court in the case of Pradeep Kumar Malhotra v. CIT (supra.) has provided relief to the assessee. Thereafter, the Revenue had preferred an appeal before the Tribunal wherein the Co-ordinate Bench of the Pune Tribunal after placing reliance on the same judgment of the Hon'ble Calcutta High Court has upheld the findings of the Ld. CIT(Appeals) and dismissed the Revenue s appeal. In all the assessment years under consideration before us, the Ld. CIT(Appeals) has provided relief to the assessee following his own order for the assessment year 2012-13. 7. The Ld. AR of the assessee apprised the Bench that on the issue, the decision of the Hon'ble Calcutta High Court is the only decision which is being till date followed by the various Benches of the Income Tax Appellate Tribunal and that there has been no contrary decision against that decision. Hence, placing reliance on the observation of the Hon'ble Calcutta High Court in the case of Pradeep Kumar Malhotra v. CIT (Supra.) is absolutely mandatory and justified. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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