The Assistant Commissioner Of Income Tax, Nagpur v. Apex Multitrade Pvt.ltd., Nagpur

itas30.13+3 IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR. INCOME TAX APPEAL NOS.30, 36, 41 AND 43 OF 2013 The Assistant Commissioner of Income Tax, Nagpur -vs- Apex Multitrade Pvt.Ltd., Nagpur ------------------------------------------------------------------------------------------------------------------------------------Office notes, Office Memoranda ofCoram, appearances, Court's ordersCourt's or Judge's Orders.or directions and Registrar's orders. ------------------------------------------------------------------------------------------------------------------------------------Mr.Anand Parchure, counsel for the petitioner.Mr.A.F.Hirani, counsel for the respondent. CORAM : SMT. VASANTI A. NAIK & P. R. BORA, JJ.DATE : 26.09.2014. Since the issue involved in these appeals is similar and since they arise from similar orders passed by the Commissioner of Income Tax (Appeals)-II, Nagpur and the Income Tax Appellate Tribunal, they are heard together and are decided by this common order. The assessee is a private limited company involved in lending of money on interest. During the Assessment Years in question, the assessee had accepted certain amounts from Chawla Sarees Private Limited (hereinafter referred to as the 'CSPL' for the sake of brevity). The Assessing Officer noticed that one of the shareholders in the assessee company was also a shareholder in the CSPL holding more than 10% share in the CSPL and having a share holding of more than 20% in the assessee company. Since one of the shareholders was the same, in view of the Assessing Officer, the deemed dividend income was liable to be assessed in view of the provisions of Section 2(22(e) of the Income Tax Act. The assessee company filed an appeal against the order of the Assessing Officer before the Commissioner. The Commissioner of Income Tax, by the impugned order allowed the appeal filed by the assessee company and set aside the order of the Assessing Officer. The department filed a second appeal before the Income Tax Appellate Tribunal. The appeal filed by the Department was, however, dismissed and the order of the Commissioner of Income Tax was upheld. On hearing the learned counsel for the parties and on a perusal of the impugned orders, it appears that no substantial question of law arises for determination in these appeals. On a perusal of the material on record, the Commissioner of Income Tax and the Tribunal held that the advances were taken by the assessee company from the CSPL in business connection, as the assessee company was involved in money lending business on interest and earned interest. Moreover, according to the Tribunal, the assessee company was not a shareholder directly. While holding so, the Commissioner of Income Tax relied on the balance-sheet, which was duly verified and signed by the Auditor and the Board of Directors. The Tribunal upheld the finding of fact recorded by the Commissioner of Income Tax in regard to the transaction. The Tribunal considered the judgment of the Division Bench of this Court at the Principal Seat reported in [2010] 190 Taxman 144 (Commissioner of Income Tax v.Universal Medicare (P.) Ltd.) by which the issue involved in this case was answered in favour of the assessee therein. The Tribunal observed that the advances were taken by the assessee in business connection, as the assessee company was involved in money lending business on interest. The finding of fact recorded by the Commissioner of Income Tax and the Tribunal is based on a proper appreciation of the material on record and the same would not give rise to a substantial question of law. The Tribunal has rightly held that the judgment reported in[2010] 190 Taxman 144(Commissioner of Income Tax v. Universal Medicare (P.)Ltd.)would apply to the facts of this case. Since Section 2(22)(e) is not applicable to the facts of the case, the ground raised by the Department in regard to the deletion of the additions on account of interest on deemed dividend would also fall. Since the orders of the authorities are just and proper and since they do not give rise any substantial question of law, the appeals are dismissed with no order as to costs. JUDGE JUDGE