TMI Blog2015 (2) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... icial shareholder. Special Bench of the Tribunal in the case of ACIT vs. Bhaumik Colour Pvt. Ltd. [ 2008 (11) TMI 273 - ITAT BOMBAY-E] has held that the deemed dividend can be assessed only in hands of a person who is a shareholder of lender company and not in hands of a person other than a shareholder. The view taken by the Special Bench has been approved by the Hon ble Madras High Court in the case of CIT v. Printwave Services (P.) Ltd [ 2014 (11) TMI 694 - MADRAS HIGH COURT] while dealing with similar controversy held that since the assessee company is not beneficial or registered owner of shareholding in the company (sister concern), no dividend, normal or deemed could have been received by the assessee-company. Therefore, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 2,69,79,601/- as on 31.3.2007. The Assessing Officer treated the amounts advanced by M/s. Fairmacs Shipping Transport Services Pvt. Ltd. as deemed dividend within the meaning of Sec.2(22)(e) of the Act. Aggrieved by the assessment order dated 31.12.2009, the assessee preferred an appeal before the Commissioner of Income-tax(Appeals). The Commissioner of Income-tax(Appeals) vide impugned order upheld the findings of the Assessing Officer and dismissed the appeal of the assessee. Now, the assessee has come in second appeal before the Tribunal assailing the order of the Commissioner of Incometax( Appeals). 3. Shri G. Seetharaman, appearing on behalf of the assessee, submitted, that for the application of provisions of Sec.2(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -company falls within the ambit of deemed dividend as defined in Sec.2(22)(e) of the Act. From the records, it is evident that the assessee-company is not the shareholding company of M/s. Fairmacs Shipping Transport Services Pvt. Ltd.. To fall within the scope of deemed dividend u/s.2(22)(e) of the Act, the payment should have been made by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares. Thus, the amounts can be treated as deemed dividend only if it is advanced to a person (including juristic person) who is a beneficial shareholder. 6. The Special Bench of the Tribunal in the case of ACIT vs. Bhaumik Colour Pvt. Ltd. (supra) has held that the deemed dividend can be assessed only in ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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