HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.385 OF 2014 DATED:26.06.2014 Between:
Commissioner of Income Tax - II, IT Towers, AC Guards, Hyderabad.
… Appellant And M/s. Engineers Reddy Homes Private Limited, Hyderabad.
… Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.385 OF 2014 JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred and admitted against the judgment and order dated 29.11.2013 of the learned Tribunal in relation to the assessment year 2002-2003 on the following suggested question of law:
“In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that the provisions of Section 2(22) (e) of the Income Tax Act 1961 i.e., deemed dividend is not applicable to the inter-corporate deposits received by the respondent- assessee, remits from its group companies as it is not a registered share holder, when the said amounts are liable to be added as deemed dividend under law?”
After hearing Mr. B. Narasimha Sarma, learned counsel for the appellant and after going through the impugned judgment and order of the learned Tribunal, we are not going to admit the appeal as nothing is required to be decided on the issue suggested. It has become a settled issue that principle of deemed dividend is not applicable to the inter-corporate deposits received by the assessee. The Tribunal has followed on the same issue, the judgment of the Special Bench of the Tribunal in the case of ACIT Vs. Bhaumik Colour Pvt. Ltd (118 ITD 1) and also the judgment of the Kolkata High Court in the case of
Pradip Kumar Malhotra Vs. CIT (338 ITR 538). While following the rule of consistency in the judgments, the Tribunal has done the right thing. Besides that, going by the fact that the assessee is not the shareholder, the question of application of Section 2(22)(e) of the Income Tax Act, 1961 does not and cannot arise.
Accordingly, we dismiss the appeal. There will be no order as to costs.
Consequently, the miscellaneous petitions, if any, pending in the appeal shall stand closed.
K.J. SENGUPTA, CJ SANJAY KUMAR, J 26.6.2014 cbs/pnb