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TMI Blog2017 (9) TMI 1936X X X X Extracts X X X X X X X X Extracts X X X X ..... e, assessee company is engaged in business of running Hotel and Restaurants. It was seen from Annexure-2 of Tax Audit Report that the following payments towards the contribution of employees' PF and ESI were not made within due dates. Provident Fund - CAMA Hotels Ltd. Month Employee's Contribution Due Date Paid Date J uly 9 09 43,368 20/08/2009 21/08/2009 Sep 9 09 43,339 20/10/2009 21/10/2009 Total 86,707 Provident Fund - CAMA Caterers Ltd. Month Employee's Contribution Due Date Paid Date J uly 9 7,630 20/08/2009 21/08/2009 Sep 9 6,982 20/10/2009 21/10/2009 Total 14,612 Provident Fund - CAMA Rajputana Club Resort Month Employee's Contribution Due Date Paid Date J uly 9 17,441 20/07/2009 27/07/2009 Sep 9 17,346 20/08/2009 31/08/2009 March 10 15,019 20/04/2010 22/04/2010 Total 49,806 ESI Contribution - CAMA Hotels Ltd Month Employee's Contribution Due Date Paid Date J uly 9 6,069 20/08/2009 21/08/2009 Sep 9 5,816 20/10/2009 21/10/2009 Total 11,885 ESI Contribution - CAMA Caterers Ltd Month Employee's Contribution Due Date Paid Date J uly 9 1,541 20/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a Public Limited Company and is not holding any share in the said companies. Moreover, though Shri Jehangir R. Cama, Mrs. Mehroo J. Cama and Shri Rustom J. Cama hold more than 10% of the Share Capital i.e. the voting power, none of them holds 20% or more of the Share Capital of the above assessee company. Therefore, the provisions of Section 2(22)(e) of the Act are not applicable at all on facts of the case and, hence, there is no question of taxing such amounts as 'Deemed dividend' in the hands of the above assessee company. In view of the facts of the case, there is no need to rely upon the decision of the special bench, Mumbai in the case of ACIT V. Bhaumik Colour Pvt. Ltd. reported in 118 I.T.D. 1 (Mum) (SB), a copy of which is enclosed herewith. As regards the Loan received from RJ. Cama & Co. Pvt. Ltd., we have further to state that the said company is in the business of borrowing money and lending money. Majority of income is by way of interest income and therefore the said loan is excluded by virtue of the Subclause (ii) of Section 2(22)(e) of the I.T. Act. Kindly, therefore, note that the loan of Rs. 1,69,38,020/- was in the ordinary course of business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company is a Public Limited Company and is not holding any share in the said companies is not acceptable. 3. Against the said order assessee preferred first statutory appeal before the learned CIT(A) who partly allowed the appeal of the assessee. 4. We have gone through the relevant record and impugned order. Ld. AR stated that Cama Hotel Ltd. is not having any share holding in Cama Motors Pvt. Ltd. and issue is squarely covered in favour of the assessee. Similarly, matter came before the ITAT for Asst. Year 2009-10, in which assessee company had paid interest of Rs. 32,43,885/- to person covered u/s.40A(2)(b) of the Income Tax Act. He further observed that interest has been paid @15% in the case of Cama Motors Pvt. Ltd. and @16% in the case of R.J. Cama & Co. Pvt. Ltd. The ld. Assessing Officer has allowed the interest payment @12% and disallowed the balance. The disallowance has been computed by the Assessing Officer as under: "Disallowance is computed as under R. J. Cama & Co. Pvt. Ltd. Interest @ 16% Rs. 23,50,167/- Interest @ 12% Rs. 17,62,625/- Difference Rs. 5,87,542/- Cama Motors Pvt. Ltd. Interest @ 16% Rs. 4,78,846/- Interest @ 12% Rs. 3,83, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of DCIT(OSD) vs. M/s. Cama Hotels Pvt. Ltd. in ITA No.1834/Ahd/2012. Similar facts have been taken in this appeal which is filed by the department and appeal is dismissed for Asst. Year 2009-10. The brief facts of the case were that on perusal of the accounts, it reveals to the Assessing Officer that assessee has received an amount of Rs. 62,06,638/- from Cama Motors Pvt. Ltd. and received Rs. 1,69,38,020/- from R. J. Cama and Co. Pvt. Ltd. The ld. Assessing Officer has considered these loans as deemed dividend in the hands of assessee. He accordingly made addition of Rs. 2,63,12,188/- u/s.2(22)(e) of the Income Tax Act. On appeal, ld. CIT(A) has deleted the addition. 4.5 Learned AR at the very outset, submitted that issue in dispute is clearly covered in favour of assessee. He pointed out that assessee is not a share holder of either Cama Motors Pvt. Ltd. or R. J. Cama & Co. Pvt Ltd. Section 2(22)(e) can be applied if the assessee is registered share holder of the lender company and availed some amounts which can be treated as deemed dividend. The Ld. Assessing Officer has treated the alleged loan as deemed dividend on the ground that the Directors are holding more than 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund or funds on or before the "due date" mentioned in explanation to section 36(l)(va). Consequently, it is held that the learned tribunal has erred in deleting respective disallowances being employees' contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees' accounts in the relevant fund on or before the due date as per the explanation to section 36(l)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act. Consequently, all these appeals are allowed and the impugned judgement and orders passed by the tribunal in deleting the disallowances made by the AO are hereby quashed and set aside and the disallowances of the respective sums with respect to the Provident Fund / ESI Fund made by the AO is hereby restored. The questions raised in present appeal are answered in favour of the revenue. With this, all these appeals are allowed. 6.3 Section 36(1)(va) and section 43B(b) operate in different fields, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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