COMMISSIONER OF INCOME TAX Vs. A.R. MAGNETICS (P.) LTD.

JUDGEMENT

(1.) This appeal filed by the Revenue under section 260A of the Income-tax Act, 1961 ("the Act", for short), is directed against the order dated December 16, 2011, in the case of A.R. Magnetics Pvt. Ltd. It relates to the assessment year 2006-07. The respondent-assessee is a company and had received loan from another company Arcon (India) Pvt. Ltd. The respondent-assessee is not a shareholder in Arcon (India) Pvt. Ltd. The Assessing Officer, however, made an addition by invoking the provisions of deemed dividend under section 2(22)(e) of the Act on the ground that one Sanjay Bhaskar held more than 50.49 per cent. of the shares in Arcon (India) Pvt. Ltd. and also held 99.98 per cent. shares in the respondent-assessee. The aforesaid addition made under section 2(22)(e) was upheld by the Commissioner of Income-tax (Appeals).

(2.) The Tribunal has, however, deleted the said addition following decision of the jurisdictional High Court in CIT v. Ankitech (P.) Ltd., 2012 340 ITR 14 The said decision has been held that deemed dividend provisions cannot be invoked in such cases because the shareholders are common. In view of the authoritative pronouncement of this court in Ankitech (P.) Ltd.'s case no substantial question of law arises for consideration. The appeal is dismissed. No costs.