Mr. Manjeet Singh Basi, New Delhi V. Addl. CIT, New Delhi

ITA 5339/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6309 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 05-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJA
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5339/DEL/2013 AY: 20 09-10 MR. MANJEET SINGH BASI, VS A DDL. CIT, C-20, RAJOURI GARDEN, RANGE 9, NEW DELHI. NEW DELHI. (PAN: AAJPB0819M) (APPELLANT) (RESPONDENT ) APPELLANT BY : SHRI M.P. RASTOGI, ADV. RESPONDENT BY : SHRI P. DAMKANUNJA, SR. DR DATE OF HEARING: 05.01.2016 DATE OF PRONOUNCEMENT: ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER DATED 29.07.2013 PASSED BY THE LD. CIT(A) -VI, NEW DELHI FOR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE WAS A DIRECTOR OF CONTINENTAL CONST RUCTION LTD. DURING THE RELEVANT ASSESSMENT YEAR. HE HAD R ECEIVED A SUM OF R.S 65.00 LAKH DURING THE YEAR FROM THE COMPANY AND IT WAS THE ASSESSEES CONTENTION THAT THE AMOUNT REPRESENT ED ADVANCE FROM THE COMPANY AND WAS NOT TAXABLE. IT WAS THE A SSESSEES CONTENTION THAT THE REMUNERATION FROM THE COMPANY W AS FIXED AT I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 2 RS. 2.00 LACS PER MONTH BY THE COMPANY LAW BOARD W. E.F. 01.04.2007 VIDE ORDER DATED 18 TH /24 TH AUGUST 2009 AND THE AMOUNT OF RS. 65.00 LACS WAS RECEIVED AS AN ADVANCE FROM THE COMPANY AND THE SAME WAS TO BE PARTLY ADJUSTED AGAI NST THE EXPENSES INCURRED FROM TIME TO TIME. IT WAS SUBMIT TED THAT OUT OF RS.65.00 LAKH RECEIVED, A SUM OF RS. 55.46 LACS REMAINED UNADJUSTED TILL EVEN 31.03.2011, I.E. TWO YEARS AFT ER THE END OF THE PREVIOUS YEAR UNDER CONSIDERATION. A CONFIRMAT ION FROM THE COMPANY TO THE EFFECT WAS ALSO FILED DURING ASSESSM ENT PROCEEDINGS. HOWEVER, THE ASSESSING OFFICER WAS OF THE OPINION THAT SINCE THE COMPANY HAD NOT FILED ANY BALANCE SH EET OR PROFIT/LOSS ACCOUNT AND ALSO SINCE THE COMPANY HAD NOT BEEN FILING ITS RETURN OF INCOME SINCE ASSESSMENT YEAR 2 002-03, THE CONTENTION OF THE ASSESSEE WAS UNACCEPTABLE. THE A SSESSING OFFICER OPINED THAT THE AMOUNT OF RS. 65.00 LACS RE PRESENTED ARREARS OF SALARY AND HE ACCORDINGLY ADDED BACK THE ENTIRE AMOUNT OF RS. 65.00 LACS TO THE INCOME OF THE ASSES SEE. 3. IN THE FIRST APPELLATE PROCEEDINGS, THE LD. CIT( A) WAS OF THE OPINION THAT ONCE THE RELATIONSHIP OF A MASTER AND SERVANT WAS ESTABLISHED BETWEEN TWO PERSONS, ANY PAYMENT RECEIV ED BY THE EMPLOYER WAS TO BE TAXED UNDER THE HEAD SALARY. THE LD. CIT(A) I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 3 ALSO UPHELD THE REASONING OF THE ASSESSING OFFICER THAT SINCE NO BALANCE SHEET OR PROFIT/LOSS ACCOUNT OF THE EMPLOYE R COMPANY WAS FILED, THE ASSESSEES CLAIM COULD NOT BE ACCEPT ED. THE LD. CIT(A) OPINED THAT THE PAYMENT WAS NOT ADVANCE AGA INST SALARY BUT ADVANCE OF SALARY AND WAS HENCE TAXABLE. ACC ORDINGLY, THE APPEAL OF THE ASSESSEE WAS DISMISSED. 4. NOW, THE ASSESSEE HAS FILED THIS SECOND APPEAL O N THE ISSUE. THE LD. AR SUBMITTED THAT IN SUPPORT OF THE ADVANCE AND BALANCE OUTSTANDING, THE ASSESSEE HAD SUBMITTED THE FOLLOWI NG DETAILS BEFORE THE LOWER AUTHORITIES (NOW PART OF THE PAPER BOOK):- I) COPY OF CHEQUE FOR RS.65.00 LACS RECEIVED FROM CONTINENTAL CONSTRUCTION LTD . II) CONFIRMATION OF ADVANCE FROM CONTINENTAL CONSTRUCTION LTD. WITH PAN AND ASSESSMENT PARTICULARS. III) COPY OF ACCOUNT IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE SHOWING THE AMOUNT RECEIVED IN EXCESS OF T HE SALARY AS A LIABILITY. IV) COPY OF ACCOUNT OF THE ASSESSEE UPTO 31.3.2009 IN THE BOOKS OF CONTINENTAL CONSTRUCTION LTD . I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 4 V) RECONCILIATION OF THE BALANCE AS PER THE ASSESSEE A ND CONTINENTAL CONSTRUCTION LTD . VI) COPY OF ASSESSEES RETURN FOR ASSESSMENT YEAR 2008- 09 TO ESTABLISH THAT SALARY AS PER THE SALARY CERTIFIC ATE HAD ALREADY BEEN OFFERED TO TAX. 5. IT WAS ALSO SUBMITTED THAT CONTINENTAL CONSTRUCT ION LTD . HAD FURNISHED AN INDEPENDENT CONFIRMATION U/S 133(6 ) OF THE INCOME TAX ACT, 1961 TO THE ASSESSING OFFICER CONFI RMING THAT AN AMOUNT OF RS. 55.46 LACS REMAINED UNADJUSTED EVEN T ILL 31.3.2011. 6. THE LD. AR ALSO DREW ATTENTION TO HIS APPLICATIO N DATED 5.1.2016 FILED BEFORE THIS BENCH UNDER RULE 29 OF I TAT RULES WHICH CONTAINS A COPY OF CHEQUE DATED 26.11.2013 FO R RS. 43.00 LACS DRAWN IN THE NAME OF M/S CONTINENTAL CONSTRUCT ION LTD . IT WAS SUBMITTED THAT THE CHEQUE REPRESENTS THE AMOUNT REFUNDED TO THE EMPLOYER COMPANY AGAINST THE ADVANCE OF RS. 65.00 LACS. HE ALSO DREW OUR ATTENTION TO COPY OF THE PASS BOOK OF THE ASSESSEE WHEREIN THE ABOVE SAID CHEQUE HAS BEEN CLE ARED ON 31.12.2013. IT WAS SUBMITTED THAT IN LIGHT OF THE FACTS, THE ADDITION DESERVES TO BE DELETED. HE ALSO PLACED RE LIANCE ON THE I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 5 JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS RAGHUNATH MURTI 220 CTR 102 FOR THE PROPOSITION THA T REFUND OF SALARY, BEING NEITHER VOLUNTARY NOR FOR ANY EXTRANE OUS CONSIDERATION, COULD NOT FORM A PART OF CHARGEABLE SALARY. 7. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ADDITION HAD BEEN RIGHTLY MADE AND THE SAME SHOULD BE UPHELD . 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORDS. IT IS AN UNDISPUTED FACT THAT THE EMPLOY ER COMPANY HAD CONFIRMED TO THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 133(6) OF THE INCOME TAX ACT, 1961 THAT AN AMOUNT O F RS. 55,45,771/- WAS STILL REMAINING UNADJUSTED ON 31.03 .2011. THE ASSESSING OFFICER HAS REPRODUCED THE LETTER RECEIVE D ON PAGE 3 OF HIS ASSESSMENT ORDER AS WELL. THE LD. CIT(A) HAS A LSO MADE A REFERENCE TO IT ON PAGE 4 OF HIS ORDER. HOWEVER, B OTH THE AUTHORITIES HAVE ERRED IN DRAWING A WRONG CONCLUSIO N FROM THE CONTENTS OF THE AFORESAID LETTER OF CONFIRMATION. AN ADVANCE RECEIVED FROM THE EMPLOYER NEED NOT NECESSARILY ALW AYS BE IN THE FORM OF ADVANCE AGAINST SALARY. THE CONFIRMATION L ETTER FROM THE COMPANY ALSO SHOWS THAT AN AMOUNT OF RS. 76,93,878/ - WAS ALSO I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 6 ADJUSTED AGAINST LOAN WHILE ARRIVING AT THE CLOSING UNADJUSTED BALANCE OF RS. 55,45,771/- ON 31.3.2011. THE ASSES SEE HAS ALSO SUBMITTED DOCUMENTS UNDER RULE 29 OF THE ITAT RULES IN SUPPORT OF HIS CONTEJTI0ON THAT A SUM OF RS. 43.00 LACS WAS , IN FACT, REFUNDED TO THE COMPANY ON 31.12.2013. WE ARE OF T HE CONSIDERED OPINION THAT AN AMOUNT CANNOT BE DEEMED AS INCOME OF THE ASSESSEE TILL THERE IS EVIDENCE THAT IT HAS BEEN RECEIVED AS AN INCOME WHICH HAS ACCRUED TO THE ASSESSEE. IN TH E CIRCUMSTANCES WE DEEM IT FIT TO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DULY VE RIFY THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT OF RS. 43.00 LACS THROUGH CHEQUE ON 31.12.2013 MADE TO CONTINENTAL CO NSTRUCTION LTD . IS, IN FACT, A PAYMENT MADE TOWARDS THE REPAYMENT O F OUTSTANDING AMOUNT TO THE EMPLOYER COMPANY. IF THA T BE SO, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIO N OF RS. 65.00 LACS MADE AS PER THE ASSESSMENT ORDER PASSED U/S 14 3(3) OF THE ACT AND DATED 19.12.2011 FOR THE ASSESSMENT YEAR UN DER CONSIDERATION. 9. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. I.T.A. 5339/D/2013 ASSESSMENT YEAR 2009-10 7 ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND OF MARCH, 2016. SD/- SD/- (J.S. REDDY) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 22ND OF MARCH, 2016 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR