TMI Blog2022 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... that the disallowance does not have any merit and accordingly directed the Assessing Officer to delete the addition. Under the above facts and circumstances, we find no reason to interfere with the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the Revenue is dismissed for all the assessment year under appeal. Disallowance of deemed dividend income - HELD THAT:- A similar view by relying on the ratio in the case of ACIT vs. Bhaumik Color P. Ltd [ 2008 (11) TMI 273 - ITAT BOMBAY-E] in which, it was held that the expression 'shareholder' referred to in section 2(22)(e) of the Act refers to both a registered shareholder and the beneficial shareholder. And further that if a person is a registered shareholder but not a beneficial shareholder, then the provisions of section 2(22)(e) of the Act would not apply and likewise if a person is a beneficial shareholder but a registered shareholder then also the provisions of section 2(22)(e) of the Act would not apply. While in the case at hand the ITAT noted that the assessee was not a shareholder at all and hence the provisions of section 2(22)(e) of the Act would not apply. DR could not contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT 372 ITR 694. We find no infirmity in the order of the ld. CIT(A) and accordingly, the ground raised by the Revenue is dismissed for both the assessment years. 2.4 In the assessment year 2012-13 also against the disallowance under section 14A r.w. Rule 8D of ₹.3,21,97,329/-, the ld. CIT(A) has observed that the disallowance in this case has to be restricted to the amount of dividend earned at ₹.2,04,12,283/- in view of the decision of the Hon ble Delhi High Court in the case of Joint Investments P. Ltd. v. CIT (supra). Further it was observed that having regard to the fact that the assessee had offered voluntary disallowance of ₹.19,22,139/- and the same has to be reduced for the purpose of working the net disallowance which in this case is worked out at ₹.1,84,90,144/- [₹.2,04,12,283 ₹.19,22,139]. Accordingly, the ld. CIT(A) has rightly directed the Assessing Officer to modify the disallowance under section 14A of the Act. We find no infirmity in the order of the ld. CIT(A) and thus, the ground raised by the Revenue is dismissed for the assessment year 2012-13. 3. The next common ground raised in all the appeals relates to deletion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the assessment years 2011-12 and 2012-13 relates to disallowance of deemed dividend income. 4.1 In the assessment year 2012-13, while examining the issue relating to deemed dividend the Assessing Officer has noted that a sum of ₹.8,84,00,060/- was received as loans by the assessee from two of its group concerns viz., M/s. Aban Infrastructure Pvt. Ltd. and M/s. Aban Hotel Resorts P Ltd of ₹.8,41,00,060 and ₹.43,00,000 respectively on the ground that the assessee company and the two entities from whom loans were received have common shareholders holding more than 10% of shareholding, the Assessing Officer was of the view that the provisions of section 2(22)(e) of the Act are attracted and accordingly added to the total income of the assessee under the head Income from other sources for the assessment year 2012-13. 4.2 On appeal, before the ld. CIT(A) the assessee has submitted that it was not a shareholder of Aban Infrastructure Pvt. Ltd. or Aban Hotels Resorts Pvt. Ltd. from whom it had received the loans and hence section 2(22)(e) of the Act could not be made applicable to the assessee. That the provisions of section 2(22)(e) can neither be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deepa Reji Abraham, Shema Renny Abraham hold more than 10% shares in one of the three concerns or some of the concerns (as in the table). The issue of deemed dividend would therefore arise in the hands of these shareholders if any. This issue has not been examined by the AO. As regards the appellant is concerned it is not a registered shareholder and therefore the ratio of the jurisdictional court in CIT v. Printwave Services P Ltd 373 ITR 665 (Mad) would apply squarely to its case. The appellant has no doubt pressed into service Delhi High Court decision in the case of CIT v Ankitch P Ltd (supra). 16. In this context reference is invited to the case-law relied upon by the appellant. The Hon'ble Madras High Court in CIT v. Printwaves Services P Ltd 373 ITR 665 have held that deemed receipt of dividend can only be in the hands of a substantial shareholder. In that case the assessee company itself was not a shareholder in the company Frontline Printers which had lent the sum of monies to Printwave Services P Ltd., a sister concern. It was found that the director T.R. Jawahar was holding 10% of shareholding in Printwave Services P Ltd and 43.9% in assessee's sister conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company and the two entities from whom loans were received have common shareholders holding more than 10% of shareholding, the Assessing Officer treated it as deemed dividend and brought to tax under section 2(22)(e) of the Act. Before the ld. CIT(A), it was the submissions of the assessee that it was not a shareholder of Aban Infrastructure Pvt. Ltd. or Aban Hotels Resorts Pvt. Ltd. from whom it had received the loans and hence, the provisions of section 2(22)(e) could not be made applicable to the assessee. Further, the assessee also contended before the ld. CIT(A) that the loan received were in the nature of inter corporate deposits advanced in the course of business and interest has been charged by both the companies. Such deposits therefore would not constitute loans advances contemplated u/s 2(22)(e) of the Act. After considering the submissions of the assessee as well as shareholding pattern given in the assessment order, the ld. CIT(A) has observed that since the individuals being shareholders viz., Saley Abraham, Deepa Reji Abraham, Shema Renny Abraham holding more than 10% shares in one of the three concerns or some of the concerns as has been tabulated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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