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National Travel Services v. Commissioner of Income Tax, Delhi VIII

Civil Appeal · 2018 INSC 35Decided 18 Jan 2018
Civil Appeal Nos. 2068-2071 of 2012
Justice Rohinton Fali Nariman · Justice Navin Sinha

Background

This is a referral order, not a final judgment. The question was whether a partnership firm that holds shares in a company only in its partners' names can be treated as a shareholder for deemed dividend under Section 2(22)(e) of the Income Tax Act.

Decision Breakdown

This is a referral order, not a final judgment. The Court found it difficult to accept the High Court's reasoning and was prima facie of the view that the Delhi High Court's decision in CIT v. Ankitech Pvt. Ltd. needs reconsideration. It referred the matter to the Chief Justice of India to constitute a bench of three judges. The appeals were not decided.

Lesson Learnt

There is no final ruling yet. Deemed dividend in the hands of a firm was left to a larger bench.

Official source (sci.gov.in)View Judgment (PDF)

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