CIT Vs. Ankitech Pvt Ltd (Delhi High Court)
REPORT ABLE
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ITA No. 462 of 2009 with ITA Nos. 2087/2010, 901/2010, 902/2010, 903/2010, 960/2010, 1327/2010, 1436/2010, 1502/2010, 1865/2010, 461/2010, 998/2009, 1421/2009, 1618/2010, 1758/2010, 1978/2010, 622/2011, 623/2011, 270/20111588/2010, 211/2010, 352/2010 & 2014/ 2010.
Reserved On: April 27, 2011.
% Pronounced On: May 11, 2011.
1) ITA No. 462 of 2009
Commissioner of Income Tax Versus Ankitech Pvt Ltd.
2) ITA No. 2087 of 2010
Commissioner of Income Tax Versus Ankitech Pvt Ltd.
3) ITA No. 90 1 of 2010
Commissioner of Income Tax Versus M/S Mukul International Ltd.
4) ITA No. 902 of 2010
Commissioner of Income Tax Versus M/S Mukul International Ltd.
5) ITA No. 903 of 2010
Commissioner of Income Tax Versus M/S Mukul International Ltd.
6) ITA No. 960 of 2010
Commissioner of Income Tax Versus M/S R.C. Energy Metering Pvt. Ltd.
7) ITA No. 1327 of 2010
Commissioner of Income Tax Versus Active Securities Pvt. Ltd.
8) ITA No. 1436 of 2010
Commissioner of Income Tax Versus P And A Estates Pvt. Ltd.
9) ITA No. 1502 of 2010
Commissioner of Income Tax Versus Mehra Store
10) ITA No. 1865 of 2010
Commissioner of Income Tax Versus Mokul International Ltd.
11) ITA No. 461 of 2011
Commissioner of Income Tax Versus Cosmotech Communications Products Pvt. Ltd.
12) ITA No. 998 of 2009
Commissioner of Income Tax Versus Magic International Pvt. Ltd., New Delhi.
13) ITA No. 1421 of 2009
Commissioner of Income Tax Versus R.C. Energy Matering Pvt. Ltd.
14) ITA No. 1618 of 2010
Commissioner of Income Tax Versus Kaiser Export Pvt Ltd
15) ITA No. 1758 of 2010
Commissioner of Income Tax versus Pearl India Publishing House Pvt. Ltd.
16) ITA No. 1978 of 2010
Commissioner of Income Tax Versus Stelco India P. Ltd.
17) ITA No. 622 of 2011
Commissioner of Income Tax Versus Caparo India Development Pvt. Ltd
18) ITA No. 623 of 2011
Commissioner of Income Tax Versus Caparo India Pvt. Ltd.
19) ITA No. 270 of 2011
Commissioner of Income Tax Versus Shiva Commodities And Derivatives
Reserved On: April 29, 2011 Pronounced On: May 11, 2011
20) ITA No. 1588 of 2010
Commissioner of Income Tax Versus Timeless Fashions Pvt. Ltd.
21) ITA No. 211 of 2010
Commissioner Of Income Tax Versus Nandlala Securities Pvt. Ltd.
22) ITA No. 352 of 2011
Commissioner of Income Tax Versus Indian Technocraft Ltd.
Reserved On: May 02, 2011 Pronounced On: May 11, 2011
23) ITA No. 2014 of 2010
Commissioner of Income Tax Versus Roxy Investment
Counsels for the Revenue:
Ms. Prem Lata Bansal, Sr. Advocate with Mr. Deepak Anand.
Mr. Sanjeev Sabharwal, Sr. Standing Counsel.
Mr. N.P. Sahni, Sr. Standing Counsel.
Mr. Kamal Sawhney, Sr. Standing Counsel.
Ms. Rashmi Chopra, Sr. Standing Counsel.
Counsels for the Assessee:
Mr. Ajay Vohra with Ms. Kavita Jha, Advocates.
Mr. Salil Kapoor, Advocate.
Dr. Rakesh Kapoor with Ms. Poonam Ahuja, Advocates.
Mr. Satyen Sethi with Mr. A.T. Panda, Advocates.
Mr. Rajat Navet, Advocate.
Mr. Sandeep Sapra, Advocate.
CORAM :-
HONORABLE MR. JUSTICE A.K. SIKRI HONORABLE MR. JUSTICE M.L. MEHTA
1. Whether Reporters of Local newspapers may be allowed to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
1. In all these appeals, same questions of law touching the interpretation that is to be accorded to the provisions of Section 2(22)(e) of the amount received by the Income Tax Act (hereinafter referred to as ‗the Act‘), arise for consideration. Our purpose would be served by taking note of the questions of law framed in ITA No.462 of 2009, as concededly answer thereto shall cover the outcome of all these appeals. The substantial questions of law on which this appeal was admitted are as under:
“a) Whether ITAT was correct in law in deleting the addition of Rs. 6,32,72,265/- made by the Assessing Officer in the hands of assessee company under Section 2(22)(e) of the Act?
b) Whether ITAT was correct in law in holding that the addition could not have been made by the Assessing Officer in the assessee company as it was not the shareholder of M/s Jackson?
c) Whether ITAT has correctly interpreted the provisions of Section 2(22)(e) of the Act?
d) Whether order passed by ITAT is perverse in law and on facts when it deleted the addition holding that though the amount received by the assessee by way of book entry falls within the ambit of Section 2(22)(e) of the Act but the same cannot be assessed in the hands of Assessee?”
2. Though as many as four questions are framed, it is with singular focus, viz., whether the assessee who was not the shareholders of M/s. Jackson Generators (P) Ltd. (JGPL) could be treated as covered by the definition of ‘dividend’ as contained in Section 2(22)(e) of the Income Tax Act (hereinafter referred to as ‗the Act‘). This issue has arisen under the following circumstances.
3. The assessee filed the return declaring income at ‘Nil’ under normal provisions but at Rs. 1.45 Crores under Section 115JB of the Act. During the assessment proceedings, the Assessing Officer (AO) noticed that the assessee company had received advances of Rs. 6,32,72,265/- by way of book entry from JGPL and the shareholders having substantial interest in the assessee company were also having 10% of the voting power in JGPL. The AO specifically took note of the share-holding pattern in the assessee company as well as in JGPL, which was as following:
“The share holding pattern of the assessee company (hereinafter referred as APL) as on 31.03.2003 is as follows:
Percentage holding
