PCIT Vs Apeejay Surendra Amanagement Services Pvt Ltd (Calcutta High Court)
The Calcutta High Court dismissed the Revenue’s appeal concerning the taxability of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. Before considering the appeal, the Court condoned a delay of 477 days in filing the matter after finding the explanation offered by the Revenue satisfactory.
The Revenue had challenged the order of the Income Tax Appellate Tribunal, Kolkata Bench, for Assessment Year 2014-15. The substantial question raised was whether the Tribunal was justified in holding that an addition on account of deemed dividend under Section 2(22)(e) could be made only in the hands of a registered or beneficial shareholder, despite there being no express provision in the section specifying who should be taxed in respect of such income.
The assessee contended that the issue was already covered in its favour by the decision of the Supreme Court in Commissioner of Income Tax v. Madhur Housing & Development Co. and by other judicial precedents reported in 340 ITR 14 (Delhi) and 120 taxmann.com 125 (Madras).
The High Court noted that the Revenue had not brought any distinguishing feature on record that would justify taking a view different from the decisions relied upon by the assessee. Following the Supreme Court decision in Madhur Housing & Development Co. and the other cited judgments, the Court answered the substantial question of law against the Revenue.
