1 ITXA: 4198/2009 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4198 of 2009 The Commissioner of Income-Tax-1 … Appellant Vs. Vinit Arun Phatak, Mumbai ..... Respondent Mr. Vimal Gupta, Advocate for Appellant. Mr. S.G. Dalal, Advocate for respondent. CORAM : J.P. Devadhar & Smt. R.P. SondurBaldota, J. Date : 15th June 2011 P.C. : 1. The question raised in this appeal is whether the Tribunal was justified in deleting the addition of Rs.79,31,016/- confirmed by the C.I.T.(A) as deemed as dividend under Section 2(22)(e), Income Tax Act, 1961? 2. The assessee is an individual. The assessee had 49% share holding in Omega Telecommunication Systems Limited. In the assessment year 2003-2004, assessee had received a sum of Rs.1.12 Crores as security deposit for obtaining office premises on lease from 2 ITXA: 4198/2009 the assessee. The Assessing Officer held that the amount advanced by the Company, Omega Telecommunication Systems Limited was in the nature of loan and by applying the provisions of Section 2(22)(e) of the Income Tax Act treated the loan amount of Rs.1.12 Crores as deemed dividend in the hands of the assessee. On appeal filed by the assesee, the C.I.T.(A) while confirming the order of the assessing officer held that the accumulated profits computed in the hands of Omega Telecommunication Systems Limited to the extent of 79.31 lacs shall alone be deemed dividend in the hands of the assessee under Section 2(22)(e) of the Income Tax Act, 1961. On further appeal, the Tribunal has deleted the additions sustained by the C.I.T.(A) by holding that if the Company, Omega Telecommunication Systems Limited thinks it fit to give security deposit for taking office premises on lease from the assessee, which is being acquired by the assessee, the security deposit given cannot be said to be a loan. In the present case, the genuineness of the transaction is not in dispute and in fact the asseessee on acquisition of the property has given it on lease to the Company, Omega Telecommunication Systems Limited. In this view of the matter, in our opinion, the decision of Tribunal is based on finding of facts and does not give rise to substantial question of 3 ITXA: 4198/2009 law. The appeal is dismissed. (Smt. R.P. SondurBaldota, J.) ( J.P. Devadhar, J.)