Commissioner Of Income Tax Central-1 v. Ajitabh Bachchan

dik IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. INCOME TAX APPEAL NO. 1664 OF 2016 Commissioner of Income Tax Central-1...Appellant vsAjitabh Bachchan...Respondent. WITH INCOME TAX APPEAL NO. 1557 OF 2016 Pr. Commissioner of Income Tax Central-1...Appellant vsAjitabh Bachchan...Respondent. ..... Mr Suresh Kumar, advocate for the Appellant in both appeals. Mr Atul Jasani for the Respondent in both appeals. ..... CORAM : AKIL KURESHI & B.P.COLABAWALLA, JJ. FEBRUARY 01, 2019. P.C. : Both these appeals arising on the similar background andconcern the same assessee. The issue being short, we have heard thelearned counsel for parties for final hearing, at this stage. 2The appeals are filed by the revenue to challenge theJudgment of the Income Tax Appellate Tribunal raising the followingquestions for our consideration. Pg 1 of 3 “(1) Whether on the facts and circumstances of the case and in law, theHon'ble ITAT was correct in law to hold that Assessing Officer whiletaxing deemed dividend under section 2(22)(e) of the IT Act 1961had not taken into consideration the facts that Moonrise Engineering(Bom) P Ltd. (hereinafter referred to as Moonrise) had takenunsecured loan from Lotus Investment Ltd (hereinafter referred toas Lotus) and Moonrise Ltd did hold any shares of Lotus andsimilarly Lotus also did not own any shares of Moonrise withoutappreciating that the assessee held substantial share of 50 % and 29% in Moonrise and Lotus respectively?Hon'ble ITAT was correct in law to hold that Assessing Officer whiletaxing deemed dividend under section 2(22)(e) of the IT Act 1961had not taken into consideration the facts that Moonrise Engineering(Bom) P Ltd. (hereinafter referred to as Moonrise) had takenunsecured loan from Lotus Investment Ltd (hereinafter referred toas Lotus) and Moonrise Ltd did hold any shares of Lotus andsimilarly Lotus also did not own any shares of Moonrise withoutappreciating that the assessee held substantial share of 50 % and 29% in Moonrise and Lotus respectively? (2) Whether on the facts and circumstances of the case and in law, theHon'ble ITAT was correct in law to set aside the issue to the file ofAssessing Officer, with a direction to look into whether the amountof loan given by Lotus to Moonrise is to be taxed as deemeddividend in assessee's hand or in any other shareholder's handwithout appreciating the fact that the assessee had substantialinterest and therefore deemed dividend had been correctly taxed inthe hands of the assessee?”.Hon'ble ITAT was correct in law to set aside the issue to the file ofAssessing Officer, with a direction to look into whether the amountof loan given by Lotus to Moonrise is to be taxed as deemeddividend in assessee's hand or in any other shareholder's handwithout appreciating the fact that the assessee had substantialinterest and therefore deemed dividend had been correctly taxed inthe hands of the assessee?”. 3At the outset, the learned counsel for the respondent –assessee pointed out that by the impugned judgment the Tribunal hasremanded the issue of applicability of Section 2(22)(e) of the IncomeTax Act, 1961 before the Assessing Officer for fresh consideration. Hestated that pursuant to such judgment of the Tribunal, the AssessingOfficer has already passed a fresh order holding against the assessee,against which the assessee is in appeal before the Commissioner. He,therefore, submits that the present appeals may not be entertained. Pg 2 of 3 901.ITXA.1664.2016;1557.2016.doc 4On the other hand learned counsel for the revenuesubmitted that while restoring the issue before the Assessing Officer,the Tribunal has made certain observations which the revenue doesnot accept. 5Learned counsel for the assessee agreed that thedirections of the Tribunal may be treated as remand for freshconsideration without any further observation or direction to decidethe issue in a particular manner. Pg 2 of 3 901.ITXA.1664.2016;1557.2016.doc 4On the other hand learned counsel for the revenuesubmitted that while restoring the issue before the Assessing Officer,the Tribunal has made certain observations which the revenue doesnot accept. 5Learned counsel for the assessee agreed that thedirections of the Tribunal may be treated as remand for freshconsideration without any further observation or direction to decidethe issue in a particular manner. 6In this view of the matter, now that the Assessing Officerhas already passed a fresh order, we do not see any reason toentertain these appeals any longer. However, before disposal of theseappeals, we clarify that the issue at hand will be decided in furtherproceedings uninfluenced by any of the observations made by theTribunal in the impugned judgment. In other words, the entire issuebe judged independently and on the basis of the applicable law. Withthese observations, both the appeals are disposed of. No order as tocosts. (B.P.COLABAWALLA, J.) (AKIL KURESHI, J. ) Pg 3 of 3