The judgment of the court was delivered by
1. This appeal under section 260A of the Income-tax Act, 1961 (the Act) challenges the order dated March 20, 2013 passed by the Income-tax Appellate Tribunal (the Tribunal). The impugned order is in respect of assessment year 2006-07.
2. This appeal raises the following questions of law for our consideration :
"(i) Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that the amounts received as share application money by companies from companies in both of which the respondent assessee has beneficial interest is not loans and advances for the purposes of invoking section 2(22)(e) of the Income- tax Act, 1961 ?
(ii) Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that investment made in two distinct adjacent flats would qualify for exemption under section 54F without appreciating the fact that the said section provides exemption in respect of a residential property implying a single residential unit only ?"
3. Re : question (i)
(a) The respondent-assessee holds more than 10 per cent. of the voting power (beneficial shareholder) in Siddhivinayak Realities Pvt. Ltd., M/s. Oberoi Construction Pvt. Ltd., Kingston Properties Pvt. Ltd. and R. S. Estate Developers Pvt. Ltd. During the subject assessment year, Siddhivinayak Realities Pvt. Ltd. received a sum of Rs. 10.35 crores from M/s. Oberoi Construction Pvt. Ltd. as share application money while Kingston Properties Pvt. Ltd. received a sum of Rs. 6.89 crores from R. S. Estate Developers Pvt. Ltd. as share application money. The Assessing Officer invoked section 2(22)(e) of the Act and brought to tax the amount received as share application money by M/s. Siddhivinayak Realities Pvt. Ltd. and Kingston Properties Pvt. Ltd. as loans and advances in the hands of the respondent-assessee as deemed dividend.
(b) Being aggrieved, the respondent-assessee filed an appeal before the Commissioner of Income-tax (Appeals) (CIT(A)). By an order dated March 23, 2011, the Commissioner of Income-tax (Appeals) on facts, records that the amount received as share application money was a business arrangement for the purposes of raising the capital by issue of shares as was evident from the entries in books of account of both i.e. the companies which paid share allotment money and the companies which received the same. Therefore, the same could not be treated as loans and advances. It also held that return of the share allotment money in a sub sequent financial year was for commercial reasons and would not change the character of the share allotment money. Thus, allowed the appeal of the respondent-assessee holding that the share application money received by the two companies from the other two companies (in all of which the respondent assessee had beneficial holding), cannot be treated as loan or deposit so as to warrant invoking of section 2(22)(e) of the Act.
(c) On further appeal by the Revenue to the Tribunal, the impugned order of the Tribunal confirmed the order of the Commissioner of Income- tax (Appeals) and dismissed the appeal. It in fact placed reliance upon the decisions of the Co-ordinate Benches of the Tribunal at Mumbai in ITO v. Direct Information Pvt. Ltd. [2012] 18 ITR (Trib) 562 (Mumbai), dated January 31, 2012 and ITO v. Subhmangal Credit Capital Pvt. Ltd. I. T. A. No. 7238/Mum/2008, dated January 19, 2010 to hold that where share application money is received pending allotment of shares then, the same cannot be considered to be in the nature of loans and advances. The impugned order, on facts, held that in the absence of the Revenue alleging/establishing any mala fide, the book entries and resolutions passed by the two companies involved in applying for shares and allotment of shares has to be accepted as having been genuinely done. The subsequent return of the amounts in a subsequent assessment year was for commercial reasons. It was further held that the book entries and the resolution of the board clearly suggest that the share application money was not in the nature of loans and advances so as to stand covered by section 2(22)(e) of the Act. The impugned order also places reliance upon the decisions of the Delhi High Court in the case of Sumit Chopra, dated April 27, 2011 being Income Tax Appeal No. 106 of 2011 and also decisions of the Madras High Court in the case of CIT v. Rugmini Ram Ragav Spinners Pvt. Ltd. [2008] 304 ITR 417 (Mad) to uphold the order of the Commissioner of Income-tax (Appeals).
4. We find that the impugned order of the Tribunal has followed the decisions of the Co-ordinate Benches at Mumbai in Direct Information Pvt. Ltd. (supra) and Subhmangal Credit Capital Pvt. Ltd. (supra). Nothing has been pointed to us to indicate that the Revenue has not accepted the above decisions of the Co-ordinate Benches of the Tribunal. Further, no distinguishing features warranting a different view in the present case from that taken by the Co-ordinate Benches of the Mumbai Tribunal in Direct Information Pvt. Ltd. (supra) and Subhmangal Credit Capital (supra) is brought to our notice. Thus, there is no justification for the Revenue to urge a view contrary to that accepted by it in case of Direct Information Pvt. Ltd. (supra) and Subhmangal Credit Capital (supra). Further, we find that on similar facts, the Delhi High Court and Madras High Court in Sumit Chopra (supra) and Rugmini Ram Ragav (supra) has also taken a view that the share application money cannot be treated as loans and advances for purposes of section 2(22)(e) of the Act. Moreover, on examination of the facts, both the Commissioner of Income-tax (Appeals) and the Tribunal have held that what was received was share allotment money and, therefore, could not be considered to be a loan and/or advance. It is to be further noted that it is not the case of the Revenue that the transaction of taking money for allotment of shares was a colourable device to evade taxes.
5. In the aforesaid circumstances, no reason has been shown as to why the concurrent finding of fact arrived at by the Commissioner of Income-tax (Appeals) and the Tribunal holding that share allotment money could not be considered to be loans and advances is required to be disturbed. This finding was reached on an analysis of facts. Therefore, where on facts, the view taken by the Commissioner of Income-tax (Appeals) and the Tribunal is a possible view, we see no reason to interfere. Accordingly, question No. (i) as formulated above, does not raise any substantial question of law. Thus, not entertained.
6. Appeal is admitted on question No. (ii).
7. Registry is directed to communicate a copy of this order to the Tribunal. This would enable the Tribunal to keep the papers and proceedings relating to the present appeal available, to be produced when sought for by the court.