ACIT, Coimbatore V. Shri Biju Thomas, Coimbatore

ITA 2161/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0858 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T S MANIAN
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE , ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.2161/MDS/2012 (ASSESSMENT YEAR : 2009-10) ASSISTANT COMMISSIONER OF , INCOME TAX, COMPANY CIRCLE-I(1), 7 TH FLOOR, 63A, RACE COURSE ROAD, COIMBATORE-641 018. VS. SHRI BIJU THOMAS, 6, ARACKPARAMBIL, RAINTREE SHIRE, PARSN SESH, NANJUNDAPURAM ROAD COIMBATORE. PAN:ABWPT4847P (APPELLANT) (RESPONDENT) APPELLANT BY : MR.SHAJI P.JACOB, ADDL. CIT RESPONDENT BY : MR. T.S .MANIAN, C.A., DATE OF HEARING : 19 TH FEBRUARY, 2013 DATE OF PRONOUNCEMENT : 19 TH FEBRUARY, 2013 O R D E R PER VIKAS AWASTHY, JM: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-I, COIMBATORE DATED 4 TH SEPTEMBER, 2012. THE ONLY GROUND RAISED IN THE APPEAL IS WITH REGARD TO ADDITION MADE BY THE ASSESSING OFFICER TO THE TUNE OF ` 42,44,848/- AS DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(2 2)(E) OF THE ACT BEING RESTRICTED TO ` 12,36,155/- BY THE CIT(A). 2. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 30.12.2009 DECLARING HIS TOTAL ITA NO.2161/MDS/2012 2 INCOME OF ` 42,30,360/-. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND THE NOTICE UNDER SECTION 143(2) WAS ISSUED ON 31.8.2010. THE ASSESSING OFFICER VIDE AS SESSMENT ORDER DATED 29.12.2011 MADE ADDITION TO THE TUNE OF ` 42,44,848/- ON ACCOUNT OF DEEMED DIVIDEND. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) V IDE ORDER DATED 4.9.2012 PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE AND HELD THAT AN AMOUNT OF ` 12,36,155/- WHICH HAS BEEN CONCEDED BY THE ASSESSEE AS PER WORK SHEET SUBMITTE D BEFORE THE CIT(A) BE TREATED AS DEEMED DIVIDEND UN DER SECTION 2(22)(E) OF THE ACT. 3. THE REVENUE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE ORDER OF THE CIT(A) ON THE G ROUND THAT THE CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION TH AT THE ASSESSING OFFICER HAS WORKED OUT THE PEAK PAYMENTS AFTER EXAMINING THE BOOKS OF ACCOUNTS, LEDGER ACCOUNT, EX TRACTS AND EXPLANATION GIVEN AT THE TIME OF ASSESSMENT. 4. SHRI SHAJI P.JACOB APPEARING ON BEHALF OF THE RE VENUE SUBMITTED THAT THE CIT(A) WITHOUT AFFORDING SUFFICI ENT ITA NO.2161/MDS/2012 3 OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER TO CONTROVERT THE SUBMISSIONS MADE BY THE ASSESSEE HAS ACCEPTED T HE WORKSHEET FILED BY THE ASSESSEE. THE DR FURTHER SUB MITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONSIDERING TH E ADVANCES GIVEN TO THE COMPANY BY THE ASSESSEE ON 4.4.2008 ( ` 10.00 LAKHS) AND 12.11.2008 ( ` 50.00 LAKHS) WHICH THE ASSESSING OFFICER HAD ALREADY DISCARDED AFTER TAKING THEM INT O CONSIDERATION. 5. ON THE OTHER HAND, SHRI T.S.MANIAN APPEARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE CIT(A). THE AR SUBMITTED THAT THE ASSESSING OFFICER HAS FAI LED TO TAKE INTO CONSIDERATION THE AMOUNTS ADVANCED BY THE ASSE SSEE TO THE COMPANY. THE AR FURTHER SUBMITTED THAT WITHDRA WALS MADE BY THE ASSESSEE WERE AGAINST CREDIT BALANCE IN HIS ACCOUNT AND WERE NOT ADVANCES BY THE ASSESSEE COMPA NY. THE SAID WITHDRAWALS WERE REQUIRED TO BE REDUCED F OR COMPUTING THE AMOUNT OF DEEMED DIVIDENDS. THE ASSE SSING OFFICER HAS WRONGLY COMPUTED THE DEEMED DIVIDEND BY TAKING THE TOTAL PAYMENTS OF THE ACCOUNTS WITHOUT CONSIDER ING THE CREDITS AVAILABLE IN THE ACCOUNT. THE AR SUPPORTIN G THE ORDER ITA NO.2161/MDS/2012 4 OF THE CIT(A) AND PRAYED FOR DISMISSAL OF THE APPEA L OF THE REVENUE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH THE PARTIES AND HAVE PERUSED THE ORDERS PASSED BY THE A UTHORITIES BELOW. THE ASSESSEE IS A MANAGING DIRECTOR OF M/S. NIRMALA MONOFIL PVT. LTD. THE ASSESSEE IS MAINTAINING RUNN ING ACCOUNT WITH THE SAID COMPANY. DURING THE FINANCIAL YEAR 2008-09, THE ASSESSEE HAS ADVANCED LOAN TO THE COMP ANY. THE SALARIES TO THE ASSESSEE ARE ALSO CREDITED IN T HIS ACCOUNT ALONG WITH COMMISSION ON SALES. THE ASSESSEE HAS GI VEN A DETAILED WORK SHEET FOR THE PERIOD FROM 1.4.2008 TO 31.3.2009 SHOWING THE CREDITS AND OUTSTANDING BALANCE ON VARI OUS DATES. THE ASSESSEE HAS CATEGORICALLY STATED THAT H E HAS ADVANCED MONEY TO THE COMPANY ON 4.4.2008 AND 12.11.2008 WHICH WAS SHOWN AS CREDIT BALANCE IN THE ACCOUNT. WE HAVE OBSERVED THAT THE ASSESSING OFFICE R HAS ONLY TAKEN INTO CONSIDERATION THE PEAK PAYMENTS AN D HAS NOT TAKEN INTO CONSIDERATION THE AMOUNTS ADVANCED BY TH E ASSESSEE TO THE COMPANY. THE CIT(A) HAS TAKEN A PRA GMATIC VIEW AND AFTER CONSIDERING SALARIES RECEIVED BY TH E ASSESSEE, ITA NO.2161/MDS/2012 5 AMOUNT ADVANCED BY THE ASSESSEE TO THE COMPANY AND WITHDRAWALS MADE BY THE ASSESSEE ON VARIOUS DATES H AS COME TO THE CONCLUSION THAT ONLY A SUM OF ` 12,36,155/- IS TO BE TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E ) OF THE ACT. THE DR HAS FAILED TO CONTROVERT THE FINDINGS O F THE CIT(A). WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(A) . THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND DI SMISS THE APPEAL OF THE REVENUE AS IT IS DEVOID OF MERIT. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 19 TH DAY OF FEBRUARY, 2013 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 19 TH FEBRUARY, 2013. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.