The. Income-tax Officer, Kapurthala-I V. Sh. Kamaljit Singh, Kapurthala

ITA 441/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0545 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANAKER
• Assessee Lawyers: KIRHSAN VRIND JAIN
• Keywords: Salary income; Deemed dividend
• Section: 143(3); 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.440 & 441(ASR)/2014 ASSESSMENT YEARS:2009-10 & 2010-11 PAN: AJKPS0266M INCOME TAX OFFICER, VS. SH. KAMALJIT SINGH KAPURTHALA-1, S/O SH. GURDAWAR SINGH, VPO DUDWINDI, KAPURTHALA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANAKER, DR RESPONDENT BY: SH. KIRHSAN VRIND JAIN, CA DATE OF HEARING: 20/06/2016 DATE OF PRONOUNCEMENT: 24/06/2016 ORDER PER A.D. JAIN, JM; THESE ARE THE DEPARTMENTS APPEALS FOR THE ASSESSM ENT YEARS 2009-10 & 2010-11, AGAINST THE ACTION OF THE LD. CIT(A) IN D ELETING ADDITIONS OF RS.55,83,000/- FOR THE A.Y. 2009-10 AND RS.36,53,8 20/- FOR THE A.Y. 2010-11, MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTI ON 2(22)(E) OF THE INCOME TAX ACT, 1961. THE ISSUE INVOLVED IN BOTH THE APPEA LS IS COMMON. SO THEY ARE BEING DISPOSED OF BY THIS COMPOSITE ORDER. 2. THE FACTS, FOR THE SAKE OF CONVENIENCE, ARE BEIN G TAKEN FROM ITA NO.440(ASR)/2014 FOR THE A.Y. 2009-10. 2 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL WHO E- FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 19.01.2010 DECLARING TOTAL INCOME OF RS.1,39,000/- + AGRICULTU RE INCOME FOR RATE PURPOSES AT RS.1,75,000/-. THE ASSESSEE IS MANAGING DIRECTOR OF A COMPANY, NAMELY, M/S. PREHARI PROTECTION SYSTEM PVT. LTD., AND EARNE D SALARY INCOME FROM IT. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY ON T HE BASIS OF AIR INFORMATION, AS PER WHICH, THE ASSESSEE, DURING THE YEAR UNDER CONSIDERATION, HAD DEPOSITED RS.39,60,000/- IN CASH INTO HIS BANK ACCO UNT WITH AXIS BANK. DURING THE ASSESSMENT PROCEEDINGS, THE AO MADE ENQ UIRIES ABOUT THE SOURCE OF THE CASH DEPOSITS. THE ASSESSEE SUBMITTED THAT H E IS A MANAGING DIRECTOR OF THE COMPANY, I.E., M/S. PREHARI PROTECTION SYSTEM P VT. LTD., WHICH IS EXECUTING WORKS AT DIFFERENT PLACES IN INDIA. IT WAS ALSO SUB MITTED THAT THE ASSESSEE IS MAINTAINING AN ACCOUNT WITH AXIS BANK, CHANDIGARH, WHICH IS BEING USED BY HIM FOR THE COMPANYS PURPOSE, LIKE TO RECEIVE AMO UNT AND DISBURSE SALARY TO THE WORKERS OF THE COMPANY. THE AO FURTHER NOTICED THAT APART FROM CASH DEPOSITS, THE COMPANY IN WHICH THE ASSESSEE IS A MANAGING DIRECTOR, HAD ALSO TRANSFERRED HUGE AMOUNTS TO THE ASSESSEES BANK ACC OUNT, WHICH IS INTRICATELY CONNECTED WITH THE CASH DEPOSITS AND WITHDRAWALS AS THE DEPOSITS WERE MADE OUT OF AMOUNTS TRANSFERRED IN THE ACCOUNT OF THE AS SESSEE BY THE AFORESAID COMPANY. THE AO OPINED THAT THE DEPOSIT OF CASH IN THE BANK ACCOUNT AND TRANSFER OF FUNDS IN THE HANDS OF THE COMPANY WERE CONNECTED ISSUES. HE, THEREFORE, ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE , AS TO WHY THE AMOUNTS RECEIVED FROM THE COMPANY, IN WHICH HE IS A MANAGIN G DIRECTOR, SHOULD NOT BE 3 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 TREATED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND TO BE SATISFACTORY BY TH E AO AND, THEREFORE, HE TREATED THE AMOUNT OF RS.55,83,000/- AS DEEMED DIV IDEND IN THE HANDS OF THE ASSESSEE AND MADE ADDITION OF RS.55,83,000/- TO TH E RETURN INCOME OF THE ASSESSEE. 4. THE LD. CIT(A) ALLOWED THE ASSESSEES APPEAL BY VIRTUE OF THE IMPUGNED ORDER, HOLDING AS FOLLOWS: 6.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE A.O . AS MADE BY HIM IN THE ASSESSMENT ORDER AS WELL AS WRITTEN SUBMISSIONS FILED BY THE ASSESSEE VIDE LETTERS DATED 31.05.2013 AND 05.03.20 14 ON THE ISSUE UNDER REFERENCE. I HAVE ALSO CONSIDERED THE JUDICIA L PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE AND THE A.O. ON CAREFUL CONSIDERATION OF THE OBSERVATIONS OF THE A.O. AS MADE BY HIM IN THE AS SESSMENT ORDER, IT HAS BEEN NOTICED THAT THE AO HAS NOT MADE ANY ADDITION IN RESPECT OF CASH DEPOSITS MADE BY THE ASSESSEE INTO HIS BANK ACCOUNT ON THE BASIS OF WHICH CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTIN Y AS EACH CASH DEPOSIT WAS SATISFACTORILY EXPLAINED WITH THE HELP OF EARLI ER WITHDRAWALS FROM THE SAME BANK ACCOUNT AS PER THE VERSION OF THE A.O. IT HAS ALSO BEEN NOTICED THAT THE AO HAS MADE THE IMPUGNED ADDITION BY TREATING THE AMOUNT TRANSFERRED BY THE COMPANY OF WHICH THE ASSE SSEE IS MANAGING DIRECTOR AS DEEMED DIVIDEND UNDER THE PROVISIONS OF SELECTION 2(22)(E) OF THE ACT AS IT HAS BEEN ALLEGED BY THE AO THAT THE A MOUNTS TRANSFERRED BY THE COMPANY HAVE BEEN UTILIZED FOR EITHER MAKING CA SH DEPOSITS ON SUBSEQUENT DATES OF WITHDRAWAL OR HAVE BEEN UTILIZE D FOR PERSONAL EXPENSES. ONE THE OTHER HAND, THE ASSESSEE SUBMITTE D THAT THE AMOUNTS TRANSFERRED BY THE COMPANY HAVE BEEN UTILIZED FOR E ITHER DISBURSEMENT OF SALARY ON BEHALF OF THE COMPANY OR INCURRING OTHER EXPENDITURE ON BEHALF OF THE COMPANY. 5. THE ASSESSEE GAVE THE DETAILS OF THE AMOUNTS TRA NSFERRED BY THE COMPANY AND DETAILS OF EXPENDITURE INCURRED ON BEHALF OF THE COMPANY. THE LD. CIT(A) HAS REPRODUCED THESE DETAILS AT PAGES 21 TO 24 OF T HE IMPUGNED ORDER. FROM THE PERUSAL OF THE DETAILS, THE LD. CIT(A) OBSERVED THAT THE AMOUNTS TRANSFERRED BY THE COMPANY, OF WHICH, THE ASSESSEE IS MANAGING DIRECTOR, WERE EITHER 4 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 UTILIZED FOR DISBURSEMENT OF SALARY ON BEHALF OF TH E COMPANY OR FOR INCURRING OTHER EXPENDITURE ON BEHALF OF THE COMPANY, SUCH AS TRAVELLING EXPENSES, MISCELLANEOUS EXPENSES, ENTERTAINMENT EXPENSES, BAN K CHARGES, ETC., OR THE AMOUNTS WERE TRANSFERRED BACK TO THE COMPANY; THAT THE AMOUNTS WHICH HAD BEEN TRANSFERRED BY THE COMPANY TO THE ASSESSEE, W ERE CLAIMED AS EXPENSES BY THE COMPANY, THE AUTHENTICITY OF WHICH HAD NOT BEEN DOUBTED BY THE AO; THAT THE EXPENSES INCURRED BY THE MANAGING DIRECTOR OF THE COMPANY, I.E., THE ASSESSEE, HAD BEEN ALLOWED AS EXPENSES IN THE HANDS OF THE COMPANY; THAT IF THE AMOUNTS WERE TRANSFERRED BY THE COMPANY, WHICH HAD BEEN UTILIZED BY THE ASSESSEE FOR INCURRING EXPENSES ON BEHALF OF THE CO MPANY AND HAD ALSO BEEN ALLOWED AS EXPENSES IN THE HANDS OF THE COMPANY, TH E AMOUNT TRANSFERRED BY THE COMPANY COULD NOT BE TREATED AS LOAN OR ADVANCE IN THE HANDS OF THE ASSESSEE; AND THAT THIS ALSO COULD NOT BE TREATED A S DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, IN THE H ANDS OF THE ASSESSEE; THAT IT HAD ALSO BEEN SUBMITTED THAT THE AO HAD NOT MADE AN Y ADDITION ON THE ISSUE UNDER REFERENCE WHILE COMPLETING ASSESSMENT U/S 143 (3) OF THE ACT, FOR THE A.Y. 2008-09, UNDER SIMILAR FACTS AND CIRCUMSTANCES; THA T IT WAS ALSO SUBMITTED THAT THE ASSESSMENT OF THE COMPANY, IN WHICH THE AS SESSEE IS A DIRECTOR AND EMPLOYEE FOR THE A.Y. 2010-11, WAS ALSO COMPLETED U /S 143(3) OF THE ACT AND NO ADVERSE VIEW WAS TAKEN IN THE HANDS OF THE COMP ANY, ALTHOUGH THE FACTS AND CIRCUMSTANCES WERE THE SAME AS THOSE OF THE YEA R UNDER CONSIDERATION, RATHER THE AMOUNT TRANSFERRED BY THE COMPANY TO THE ASSESSEE HAD BEEN 5 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 ALLOWED AS EXPENSES IN THE HANDS OF THE COMPANY; AN D THAT IT WAS ALSO CLEAR THAT THE AMOUNTS HAD NOT BE UTILIZED BY THE ASSESSE E FOR HIS INDIVIDUAL BENEFIT. 6. IT WAS FURTHER OBSERVED THAT IT HAD BEEN HELD BY THE ITAT, CHENNAI BENCH IN THE CASE OF ACIT VS. HARSHAD V. DOSHI, THAT TH E MONEY ADVANCED TO SHAREHOLDER FOR SPECIFIC PURPOSE CANNOT BE TREATED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT; THAT SIMILARLY, IN ANOTHER CAS E OF DCIT VS. LAKRA BROTHERS, 106 TTJ CHD 250, THE CHANDIGARH BENCH OF THE TRIBUN AL HAS HELD THAT ADVANCES MADE DURING THE ORDINARY COURSE OF BUSINES S FOR BUSINESS EXPEDIENCIES DO NOT CONSTITUTE LOAN FOR THE PURPO SES OF SECTION 2(22)(E) OF THE ACT AND CANNOT BE TAXED AS DEEMED DIVIDEND, THAT IN THE CASE OF ACIT VS. SMT. LAKSHMIKUTTI NARAYANAN, REPORTED AT 112 TTL 396, T HE COCHIN BENCH OF THE ITAT HAS HELD THAT ADVANCES TO ASSESSEE SHAREHOLDER DIRECTOR HAVING BEEN MADE IN THE NORMAL COURSE OF BUSINESS TRANSACTION BETWEEN ASSESSEE AND COMPANY, THE SAME COULD NOT BE TREATED AS DEEMED DI VIDEND U/S 2(22)(E) OF THE ACT; AND THAT THE HONBLE PUNJAB & HARYANA HIGH COU RT, VIDE ITS JUDGMENT DATED 11.02.2014, HAS HELD IN THE CASE OF CIT-II, LUDHIANA VS. SHRI SURAJ DEV DADA C/O DADA MOTORS PVT. LTD. (ITA NO.23 OF 2013 (O & M) HAS HELD AS UNDER: 10. FROM THE ABOVE, IT EMERGES THAT THE CIT(A) AND THE TRIBUNAL HAD CONCURRENTLY RE CORDED THAT THE ASSESSEE HAD RUNNING ACCOUNT WITH T HE COMPANY- M/S. DADA MOTORS PVT. LTD., AND HAD BEEN ADVANCING MONEY TO IT. IT WAS FURTHER OBSERVED THAT THE PROVISION OF SECTION 2(22)(E) OF THE ACT WERE NOT ATTRACTED IN THE PRESENT CASE AS THIS PROV ISION WAS INSERTED TO STOP THE MISUSE BY THE ASSESSEE BY TAKING THE FUND S OUT OF THE COMPANY BY WAY OF LOAN ADVANCES INSTEAD OF DIVIDENDS AND THEREBY AVOID TAX- IN THE PRESENT CASE, THE ASSESSEE HAD IN FACT ADVANCED MONEY TO THE COMPANY AND THERE WAS CREDIT FOR ONLY 55 DAYS FOR WHICH PROVISIONS OF 6 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 SECTION 2(22)(E0 OF THE ACT COULD NOT BE INVOKED. THESE FINDINGS WERE NOT SHOWN TO BE ERRONEOUS OR PERVERSE IN ANY MANNER. 11. IN VIEW OF THE ABOVE, NO SUBSTANTIAL QUESTION O F LAW ARISES IN THIS APPEAL. CONSEQUENTLY, FINDING NO MERIT IN THE APPEA L, THE SAME IS HEREBY DISMISSED. 7. IN VIEW OF THE ABOVE FACTS, THE LD. CIT(A) WAS O F THE OPINION THAT THE AMOUNT TRANSFERRED TO THE BANK ACCOUNT OF THE ASSE SSEE WAS PURELY FOR THE PURPOSES OF BUSINESS OF THE COMPANY, AS ALMOST THE ENTIRE AMOUNT HAD BEEN UTILIZED FOR THE PURPOSES OF DISBURSEMENT OF SALARY TO THE EMPLOYEES OF THE COMPANY, OR FOR INCURRING OTHER EXPENDITURE ON BEHA LF OF THE COMPANY AND THERE WAS HARDLY ANY AMOUNT LEFT WITH THE ASSESSEE AT THE END OF THE YEAR. IT WAS OBSERVED THAT MOREOVER, THE TRANSFERRED AMOUNT WAS NOT UTILIZED BY THE ASSESSEE FOR HIS INDIVIDUAL BENEFIT IN ANY WAY; THA T THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE AO HAVE ENTIRELY DIFFERENT FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE; AND THAT THUS, THE AMOUNT TRANSFERRED TO THE ASSESSEE COULD NOT BE SAID TO BE A LOAN OR ADVAN CE FOR THE INDIVIDUAL BENEFIT OF ASSESSEE AND HENCE, COULD NOT BE TREATED AS DEEM ED DIVIDEND IN THE HANDS OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 2(22)( E) OF THE ACT. THE ADDITION OF RS.55,83,000/- MADE BY THE AO UNDER THE PROVISIONS OF SECTION 2(22)(E)OF THE ACT WAS, THEREFORE, DIRECTED TO BE DELETED. 8. BEFORE US, THE LD. DR HAS CONTENDED THAT THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION CORRECTLY MADE AND THAT WHILE DOING SO, THE LD. CIT(A) WRONGLY FOLLOWED THE DECISION OF THE HONBLE PUNJA B & HARYANA HIGH COURT IN 7 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 THE CASE OF CIT-II, LUDHIANA VS. SH. SURAJ DEV DAD A C/O DADA MOTORS PVT. LTD.;, ITA NO.23 OF 2013 (O&M) (SUPRA), SINCE THE F ACTS IN THAT CASE ARE ENTIRELY DIFFERENT FROM THOSE IN THE CASE OF THE PRESENT ASS ESSEE. 9. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS PLACED RELIANCE ON THE IMPUGNED ORDER. WRITTEN SUBMISSIONS/SYNOPSIS HAVE ALSO BEEN FILED. COPIES OF REPRESENTATION-1 AND REPRESENTATION-2 BEF ORE THE LD. CIT(A) AND REPRESENTATION 1 & 2 BEFORE THE AO, IMPREST ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE COMPANY AND ASSESSMENT ORDER DATED 24 .12.2010 PASSED UNDER SECTION 143(3) OF THE ACT IN THE ASSESSEES CASE, F OR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, I.E., A.Y. 2008-09 HAVE BEEN PLAC ED ON FILED. COPIES OF THE FOLLOWING DECISIONS HAVE ALSO BEEN FURNISHED; WHILE RELYING ON THEM: I) ACIT VS. HARSHAD V. DOSHI, 9 TAXMAN.COM 48 (C HENNAI ITAT) II) DCIT-1, LUDHIANA VS. LAKRA BROTHERS, 162 TAX MAN 170 (CHD.) III) ACIT, CIR.1(1) VS. SMT. LAKSHMIKUTTY NARAYANA N, 105 ITD 558 (COCHIN) IV) CIT-II, LUDHIANA VS. SURAJ DEV DADA, 46 TAXMA N.COM 402 (P&H) V) CIT-1, LUDHIANA VS. AMRIK SINGH, 56 TAXMAN.COM 460 (P&H) VI) CIT VS. ARVIND KUMAR JAIN, 18 TAXMAN.COM 132 (DEL) VII) FARIDA HOLDINGS (P) LTD. V. DCIT, 21 TAXMAN. COM 462 (CHENNAI) VIII) PRADIP KUMAR MALHOTRA VS. CIT, 15 TAXMAN.CO M 66 (CAL.) IX) CIT VS. SUNIL SETHI, 26 SOT 95 (ITAT DEL.) X) SUNIL CHOPRA VS. DCIT, 26 SOT 95 (DEL) XI) SHALIMAR INFONET (P) LTD. VS. ITO, 37 TAXMAN. COM 224 (CHD. TRIB.) XII) BEGMANE CONSTRUCTIONS (P) LTD. VS. CIT, 277 CTR 338 XIII) CIT VS. NAGIN DAS M. KAPADIA, 177 ITR 393 (BOM.) 8 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 XIV) CIT VS. AMBASSADOR TRAVELS P. LTD., 318 ITR 376 (DEL) XV) CIT VS. RAJ KUMAR, 318 ITR 462 (DEL) 10. ON HAVING HEARD THE RIVAL CONTENTIONS IN THE L IGHT OF THE MATERIAL PLACED ON RECORD, IT IS SEEN THAT THE ASSESSEE, AN INDIVID UAL, DURING THE YEAR, WAS THE MANAGING DIRECTOR OF PREHARI PROTECTIONS SYSTEM PVT . LIMITED. HE HAD INCOME FROM SALARY AND AGRICULTURE INCOME. HE HAD DEPOSIT ED RS.39,60,000/- IN CASH IN HIS ACCOUNT WITH AXIS BANK. ON QUERY, HE EXPLAIN ED THAT THE COMPANY WAS PROVIDING SECURITY SERVICES; THAT THE ASSESSEE, AS THE MANAGING DIRECTOR OF THE COMPANY HAD TO VISIT THE PLACES WHERE SECURITY PERS ONS PROVIDED BY THE COMPANY WERE POSTED, IN PUNJAB, HARYANA, HIMACHAL PRADESH, DELHI AND RAJASTHAN; THAT THESE VISITS WERE ESSENTIAL FOR MAN AGEMENT PURPOSES OF THE SECURITY PERSONS; THAT IN MANY CASES, THE ASSESSEE HAD TO DISTRIBUTE SALARY TO SOME EMPLOYEES ON SITE; THAT AS SUCH, THE COMPANY T RANSFERRED FUNDS IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE AND IT WAS FRO M THERE THAT THE ASSESSEE INCURRED EXPENDITURE FOR TRAVELING AND SALARY AND DISTRIBUTION ETC., AND FILED THE BILLS WITH THE COMPANY FOR ADJUSTMENT TO BE MAD E AGAINST THE RUNNING IMPREST ACCOUNT; AND THAT THE COMPANY HAD ALSO TAKE N SECURED LOANS FROM VARIOUS BANKS; AND THAT THESE LOANS WERE SECURED FR OM THE PERSONAL PROPERTY OF THE ASSESSEE/MANAGING DIRECTOR AND THE MEMBERS OF HIS FAMILY, ALONG WITH THEIR PERSONAL GUARANTEES WITH THE BANK. THE ASSESS EE PROVIDED ALL THE DETAILS CONCERNING OPERATION OF THE IMPREST ACCOUNT FOR TH E CONDUCT OF THE BUSINESS OF THE COMPANY. THE ASSESSEE PROVIDED TO THE AO, HIS A CCOUNT STATEMENT AS IN THE BOOKS OF THE COMPANY, WHEREIN, THE COMPANY HAD CERT IFIED THE AMOUNT 9 ITA NOS.440 & 441(ASR)/201 4 AYS. 2009-2010 & 2010-11 TRANSFERRED BY IT IN THE ACCOUNT OF THE ASSESSEE TO HAVE BEEN PROPERTY USED FOR EXPENSES OF THE COMPANY. THE ASSESSEE EXPLAINED THA T THERE WAS A CLOSING BALANCE OF RS.6600/- ONLY IN THE IMPREST ACCOUNT AN D THIS WAS ADJUSTED IN NEXT YEAR. THE ASSESSEE ALSO EXPLAINED TO THE AO A LL THE TRANSACTIONS OF THE BANK DEPOSITS AND WITHDRAWALS. HOWEVER, THE AO TREA TED ALL THE TRANSFERS AMOUNTING TO RS.55,83,000/- AS DEEMED DIVIDEND. 11. THE ABOVE CONTENTIONS OF THE ASSESSEE, IT IS S EEN, HAVE DULY BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(A). FIRST OF ALL, IT HAS NOT AT ALL BEEN REBUTTED BEFORE US THAT AS OBSERVED BY THE LD. CIT(A), NO A DDITION WAS MADE BY THE AO CONCERNING CASH DEPOSITS MADE BY THE ASSESSEE IN HI S BANK ACCOUNT, WHICH WAS THE VERY BASIS FOR SELECTION OF THE ASSESSEES CASE FOR SCRUTINY. EACH AND EVERY CASH DEPOSIT STOOD SATISFACTORILY EXPLAINED B Y THE EARLIER WITHDRAWALS FROM THE SAVINGS BANK ACCOUNT, WHICH WAS ALSO AFFIR MED BY THE AO. IT WAS ONLY THAT THE AO, WITHOUT BASIS, CAME TO THE CONCLUSION THAT THE AMOUNTS TRANSFERRED BY THE COMPANY TO THE ASSESSEE HAD BEE N UTILIZED BY THE ASSESSEE FOR EITHER MAKING CASH DEPOSITS ON DATES SUBSEQUENT TO THE WITHDRAWALS, OR HAD BEEN UTILIZED FOR PERSONAL EXPENSES. AS JUXTAPO SED TO THIS, THE ASSESSEE MAINTAINED AND DEMONSTRATED THE DETAILS OF THE AMO UNTS TRANSFERRED TO HIS ACCOUNT BY THE COMPANY AND THE DETAILS OF THE EXPEN DITURE INCURRED ON BEHALF OF THE COMPANY; THAT THE AMOUNTS TRANSFERRED TO THE ASSESSEE BY THE COMPANY HAD BEEN UTILIZED ONLY FOR EITHER DISBURSEMENT OF S ALARY, OR EXPENDITURE AND THAT BOTH THESE TYPES OF OUTGO WERE ON BEHALF OF TH E COMPANY AND NOT ON THE 10 ITA NOS.440 & 441(ASR)/20 14 AYS. 2009-2010 & 2010-11 ASSESSEES BEHALF. THE COPY OF IMPREST ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDED ON 31.03.2009, AS APPEARING IN THE BOOKS OF T HE COMPANY, HAS BEEN REPRODUCED BY THE LD. CIT(A) AT PAGES 21 TO 24 OF THE ORDER UNDER APPEAL. A PERUSAL THEREOF CLEARLY SHOWS THAT THE AMOUNTS TRAN SFERRED BY THE COMPANY TO THE ASSESSEE WERE INDEED UTILIZED FOR THE PURPOSES OF THE COMPANY, I.E., SALARY DISBURSEMENT TO ITS EMPLOYEES AND EXPENSES LIKE TRA VELLING EXPENSES, MISCELLANEOUS EXPENSES, ENTERTAINMENT EXPENSES, BAN K CHARGES, ETC., ELSE THE AMOUNTS WERE RETRANSFERRED BY THE ASSESSEE TO THE COMPANY. NEITHER IS THERE ANYTHING OPPOSING THE ABOVE DETAILS IN THE ASSESSME NT ORDER, NOR HAS ANY CHALLENGE THERE-AGAINST BEEN STAKED BEFORE US BY T HE DEPARTMENT. 12. FURTHER, IT ALSO REMAINS UNDISPUTED THAT THE COMPANY CLAIMED AMOUNTS TRANSFERRED BY IT TO THE ASSESSEE, AS ITS EXPENSES AND THE AO DID NOT HAVE ANY QUESTION TO ASK IN THIS MATTER. THESE EXPENSES CLAI MED WERE ALLOWED IN THE HANDS OF THE COMPANY, THOUGH THEY WERE INCURRED THR OUGH THE ASSESSEE ITS, MANAGING DIRECTOR. THE LD. CIT(A) HAS RIGHTLY OBSE RVED IN THIS REGARD THAT SINCE THESE AMOUNTS HAVE BEEN ALLOWED AS EXPENSES IN THE HANDS OF THE COMPANY, WHEN EXPENDED AS CLAIMED, THE SAME COULD NOT BE TR EATED AS LOANS OR ADVANCES IN THE HANDS OF THE ASSESSEE. WHEN THEY WE RE INITIALLY PUT INTO HIS ACCOUNT BY THE COMPANY. THERE CANNOT BE ANY TWO OPI NIONS ABOUT IT AND THAT BEING SO, AS TO HOW THEY COULD BE TREATED AS DEEMED DIVIDEND PAID BY THE COMPANY TO THE ASSESSEE, HIT BY THE PROVISIONS OF S ECTION 2(22)(E) OF THE ACT, REMAINS INCOMPREHENSIBLE. 11 ITA NOS.440 & 441(ASR)/20 14 AYS. 2009-2010 & 2010-11 13. REMARKABLY, FOR THE IMMEDIATELY PRECEDING ASSES SMENT YEAR, UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE AO CHOSE NO T TO MAKE ANY ADDITION, MUCH LESS THE SAME FOR THE A.Y. 2011-12 ALSO. BOTH THESE ASSESSMENTS FOR THE EARLIER AND SUCCEEDING ASSESSMENT YEARS WERE SCRUTI NY ASSESSMENTS. FURTHER, STILL, IT IS NOT THE CASE OF THE DEPARTMENT THAT TH E AMOUNTS IN QUESTION WERE PUT TO USE BY THE ASSESSEE FOR HIS OWN INDIVIDUAL BENEF IT. THE FACTS AND CIRCUMSTANCES IN CIT-II, LUDHIANA VS. SH. SURAJ DE V DADA (SUPRA) ARE IN PARI MATERIA WITH THOSE OF THE PRESENT CASE AND IT HAS NOT SHOWN TO BE OTHERWISE. THEREFORE, IT DOES NOT LIE IN THE MOUTH OF THE DEPA RTMENT TO SAY THAT THE LD. CIT(A) HAS GONE WRONG IN RELYING ON CIT-II, LUDHIA NA VS. SH. SURAJ DEV DADA (SUPRA). 14. THEN, THOUGH THE LD. CIT(A) HAS RELIED THEREON, THE DEPARTMENT HAS NOT BEEN ABLE TO COUNTER THE DECISION OF THE CHENNAI BE NCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. HARSHAD V. DOSHI, 9 TAXMAN.COM 4 8, HOLDING THAT THE MONEY ADVANCED TO SHAREHOLDER FOR SPECIFIC PURPOSES CANNO T BE TREATED AS THE DEEMED DIVIDEND U/S 2(22)(E). SIMILAR REMAINS THE POSITION APROPOS DCIT VS. LAKRA BROTHERS, 162 TAXMAN 170 (CHD.) HOLDING THAT ADV ANCES MADE DURING THE ORDINARY COURSE OF BUSINESS, FOR BUSINESS EXPEDIE NCY DO NOT CONSTITUTE LOANS FOR THE PURPOSES OF SECTION 2(22)(E) AND ACIT VS. LAKSHMIKUTTI NARAYANAN, 105 ITD 558 (COCHIN), TO THE EFFECT THAT THE ADVAN CES TO ASSESSEE SHAREHOLDER DIRECTOR HAVING BEEN MADE IN THE NORMAL COURSE OF B USINESS BETWEEN THE ASSESSEE AND THE COMPANY, THE SAME COULD NOT BE TR EATED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. 12 ITA NOS.440 & 441(ASR)/20 14 AYS. 2009-2010 & 2010-11 15. THE ABOVE APART, A PLETHORA OF CASE LAWS SUPPOR TS THE FACT-SITUATION IN FAVOUR OF THE ASSESSEE. 16. IN CIT VS. AMRIK SINGH, 56 TAXMAN.COM.460 (P& H), IT WAS HELD THAT ADVANCES RECEIVED BY THE ASSESSEE SHAREHOLDER UNDER AN AGREEMENT TO DO JOB WORK FOR THE COMPANY COULD NOT BE TREATED AS DEEMED DIVIDEND. 17. IN CIT VS. ARVIND KUMAR JAIN, 18 TAXMAN.COM 1 32 (DELHI), WHERE THE ASSESSEE WAS HOLDING 50% SHARES IN THE COMPANY AND HE RECEIVED CERTAIN AMOUNTS FROM THE COMPANY ON ACCOUNT OF TRADING BETW EEN THE PARTIES, IT WAS HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE SHARE HOLDER FROM THE COMPANY, AS A RESULT OF TRADING TRANSACTION, COULD NOT BE RE GARDED AS DEEMED DIVIDEND INCOME MERELY BECAUSE IT HAD BEEN SHOWN AS UNSECURE D LOANS IN THE ASSESSEES BOOKS OF ACCOUNT, SINCE THE MERE NOMENCLATURE OF E NTRY IN THE BOOKS OF ACCOUNT IS NOT DETERMINATIVE OF THE TRUE NATURE OF A TRANSACTION. 18. IN FARIDA HOLDINGS (P) LTD.VS. DCIT, 21 TAXMA N.COM.642 (CHENNAI), IT WAS CONCLUDED THAT WHERE ADVANCE WAS MADE BY A SUBS IDIARY COMPANY TO ITS HOLDING FOR THE PURPOSE OF MEETING THE FINANCIAL RE QUIREMENTS ALL OVER THE SUBSIDIARY COMPANIES OF THE SAME HOLDING, SUCH TRA NSACTIONS WOULD NOT AMOUNT TO DEEMED DIVIDED. 19. IN PRADIP KUMAR MALHOTRA VS. CIT, 15 TAXMAN. COM 66 (CAL.), IT WAS HELD THAT THE PHRASE BY WAY OF ADVANCE OR LOAN AP PEARING IN SECTION 2(22)(E) MUST BE CONSTRUED TO MEAN THOSE ADVANCES OR LOANS W HICH A SHAREHOLDER ENJOYS SIMPLY ON ACCOUNT OF BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARE- HOLDING NOT LESS THAN 10% OF THE VOTING POWE R, BUT IF SUCH LOAN OR 13 ITA NOS.440 & 441(ASR)/20 14 AYS. 2009-2010 & 2010-11 ADVANCE IS GIVEN TO SUCH SHAREHOLDER AS A CONSEQUE NCE OF ANY FURTHER CONSIDERATION WHICH IS BENEFICIAL TO THE COMPANY, S UCH ADVANCE OR LOAN CANNOT BE SAID TO BE A DEEMED DIVIDEND. 20. IN CIT VS. SUNIL SETHI, 26 SOT 95 (DELHI), IT WAS HELD THAT IF AN AMOUNT WAS GIVEN TO A SHAREHOLDER BY A COMPANY FOR THE P URPOSE OF MAKING ADVANCE IN RESPECT OF CERTAIN LAND DEALINGS WHICH WERE PROP OSED TO BE ENTERED INTO BY THE COMPANY THROUGH THE ASSESSEE, THE SAME COULD NO T BE TREATED AS DEEMED DIVIDEND. 21. IN SHALIMAR INFONET (P) LTD. VS. ITO, 37 TAX MAN.COM 224 (CHD.), IT WAS HELD THAT WHERE MONEY WAS PROVIDED FOR SPECIFIC COM MERCIAL TRANSACTION, THE SAME CANNOT BE TREATED AS LOAN OR ADVANCE FOR INVOK ING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. 22. IN CIT VS. P.K. BADIANI, 76 ITR 369 (BOM.), I T WAS HELD THAT WHAT HAS BEEN CONSIDERED IS NOT THE BALANCE IN THE ACCOUNT, BUT THE POSITION OF EVERY PAYMENT AND, THEREFORE, THE DEBIT BALANCE OF THE SH AREHOLDER WITH THE COMPANY AT ANY POINT OF TIME COULD BE TAKEN TO REPRESENT AN ADVANCE OR LOAN BY THE COMPANY TO THE SHAREHOLDER, NOR COULD THE AMOUNT OU TSTANDING AT THE END OF THE ACCOUNTING YEAR ALONE BE TAKEN TO BE A LOAN WIT HIN THE MEANING OF SECTION 2(22)(E) OF THE ACT. 23. LIKEWISE, THERE ARE SEVERAL DECISIONS TO SUPPO RT THIS PROPOSITION AND THE SITUATION CANNOT BE CONCEIVED OPPOSED THERETO. 14 ITA NOS.440 & 441(ASR)/20 14 AYS. 2009-2010 & 2010-11 24. FOR THE ABOVE, FINDING NO ERROR WHATSOEVER IN T HE ORDER OF THE LD. CIT(A), THE SAME IS HEREBY UPHELD AND THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT IS FOUND TO BE SHORN OF MERIT AND REJECT ED AS SUCH. 25. AS NOTED IN THE INITIAL PORTION OF THIS ORDER, THE FACTS FOR BOTH THE YEARS UNDER APPEAL ARE EXACTLY SIMILAR. THEREFORE, OUR OB SERVATIONS FOR THE ASSESSMENT YEAR 2009-10 SHALL, MUTATIS MUTANDIS, EQ UALLY APPLY FOR THE ASSESSMENT YEAR 2010-11 AND FOR THAT YEAR ALSO, THE LD. CIT(A)S ORDER IS UPHELD, WHILE REJECTING THE GROUND RAISED BY THE DE PARTMENT. 26. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/06/ 2016 . SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 24/06/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. KAMALJIT SINGH, KAPURTHALA 2. THE ITO, KAPURTHALA-1 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.