The Deputy Commissioner of Income-tax, Company Circle-I(1), Chennai v. M/s Arjun Chemicals Pvt. Ltd
[Citation -2016-LL-0915-54]
| Citation | 2016-LL-0915-54 |
|---|---|
| Appellant Name | The Deputy Commissioner of Income-tax, Company Circle-I(1), Chennai |
| Respondent Name | M/s Arjun Chemicals Pvt. Ltd. |
| Court | ITAT-Chennai |
| Relevant Act | Income-tax |
| Date of Order | 15/09/2016 |
| Assessment Year | 2005-06 |
| Judgment | View Judgment |
| Keyword Tags | distribution as dividend • accumulated profit |
| Bot Summary: | Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that the assessee-company has a common shareholder along with M/s Arjun Technologies Ltd. M/s Arjun Technologies Ltd. was having accumulated profits for distribution as dividend to the extent of 87,75,665/- as on 31.03.2004 and 1,49,09,446/- as on 31.03.2005. The Ld. D.R. further pointed out that M/s Arjun Global Holdings Limited is a common shareholder in assessee-company as well as in M/s Arjun Technologies Ltd., holding more than 20 of the shares. According to the Ld. D.R., the money received by the assessee from M/s Arjun Technologies Ltd. from its accumulated profit has to be treated as dividend under Section 2(22)(e) of the Act. According to the Ld. D.R., the CIT(Appeals) deleted the addition made by the Assessing Officer on the ground that the addition, if any, has to be made only in the hands of M/s Arjun Global Holdings Limited and not in the hands of the assessee-company. On the contrary, Shri Mohammed Shaffiq, the Ld.counsel for the assessee, submitted that the assessee-company is not a shareholder in M/s Arjun Technologies Ltd. M/s Arjun Global Holdings Limited was holding more than 20 shares in M/s Arjun Technologies Ltd. as well as in the assessee- company. According to the Ld. counsel, the addition, if any to be made, it has to be made only in the hands of M/s Arjun Global Holdings Limited and definitely not in the hands of the assessee. It is not in dispute that the assessee is not a shareholder in M/s Arjun Technologies Ltd. The assessee-company received a sum of 18,00,000/- from M/s Arjun Technologies Ltd. The question arises for consideration is when the assessee-company is not a shareholder in M/s Arjun Technologies Ltd., whether the receipt of 18,00,000/- can be treated as dividend under Section 2(22)(e) of the Act The claim of the Revenue appears to be that 4 I.T.A. No.2530/Mds/14 M/s Arjun Global Holdings Limited is holding 20 shares in M/s Arjun Technologies Ltd. as well as in the assessee- company the amount of 18,00,000/- received by the assessee-company can be assessed as dividend. |