Mrs. Shahanaz Mohuddin, Mangalore V. ACIT, Mangalore

ITA 541/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63741 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SUNDARARAJAN
• Assessee Lawyers: S VENKATESAN
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRI BNAL BANGALORE BENCH C, BANGALORE BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.541BNG.)/2011 (ASSESSMENT YEAR : 2008-09) MRS.SHANAZ MOHIUDDIN, THE ASST. COMMISSIONER OF INCOME, NO.202, YEEKAY TOWERS, CENTRAL CIRCLE-1(1), KULUR BANGRA ROAD, KULUR, MANGALORE MANGALORE-560 013 PAN NO. AIFPM7608B VS APPELLANT RESPONDENT ASSESSEE BY : SHRI S. VENKATESAN, CA REVENUE BY : SHRI A. SUNDARARAJAN, JCIT DATE OF HEARING : 18 -09-2012 DATE OF PRONOUNCEMENT : - 09-2012 O R D E R PER SHRI N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 14- 03- 2011OF CIT(A)-VI, BANGALORE RELATING TO ASSESSM ENT YEAR 2008- 09. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN SUSTAINING T HE ADDITION OF A SUM OF RS.9,60,983/- AS AGAINST A SUM OF RS.11,66,7 43/- MADE BY THE AO AS DEEMED DIVIDEND U/S 2(22)(E) OF THE IT AC T, 1961 (THE ACT). 3. THE MATERIAL FACT NECESSARY FOR ADJUDICATION OF THIS APPEAL ARE AS FOLLOWS; ITA NO.541(B)/2011 2 THE ASSESSEE IS AN INDIVIDUAL. IT IS NOT N DISPUTE THAT THE ASSESSEE HAD SUBSTANTIAL INTEREST (WITHIN THE MEANI NG OF THE SAID EXPRESSION U/S.2(22)(E) OF THE ACT) IN A COMPANY BY NAME M/S HML AGENCIES PVT.LTD., ( HML A. P.LTD. ,) MANGALORE. IT IS ALSO NOT IN DISPUTE THAT THE HML A.PVT. LTD., IS A COMPANY IN W HICH PUBLIC ARE NOT SUBSTANTIALLY INTERESTED. IT IS ALSO NOT IN DI SPUTE THAT M/S HML A. PVT.LTD., HAD ACCUMULATED PROFITS OF RS.4,01 ,68,911/- AS ON 31-03-2007. 4. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ON PERUSAL OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S HML A.PVT.LTD., FOUND THAT M/S HML A.PVT.LTD., HAD MADE A PAYMENT OF RS.10.00 LAKHS ON 05-05-2007. THE DESCRIPTION OF TH E PAYMENTS READS THUS, 05-05-2007 TO SBIC BRANCH MANGALORE PAYMENT 2846 10,00,000.00 CHEQUE NO.TRANFER(AMOUNT TRAN SFERRED FROM SHANAZ A/C TO MR.MOHIUDDIN A/C FOR MAKING ADVANCE PAYMENT TOWARDS LAND AT BALA) BESIDES, THE AFORESAID ENTRY THERE WERE ENTRIES OF DEBIT AND CREDIT AND ULTIMATELY, THE AMOUNT SHOWED A DEBIT BALANCE O F RS.11,66,743/-WHICH WAS PAYABLE BY THE ASSESSEE TO M/S HML A.PVT.LTD., ACCORDING TO THE AO THE AFORESAID PAYM ENT WAS EITHER IN THE NATURE OF A LOAN OR ADVANCE WITHIN THE MEAN ING OF SEC.2(22)(E) OF THE ACT BY M/S HML A.PVT.LTD., TO T HE ASESSSEE AND HAS TO BE TREATED AS DEEMED DIVIDEND U/S 2(22)(E) O F THE ACT. WHEN THIS WAS CONFRONTED WITH THE ASSESSEE, THE ASS ESSEE SUBMITTED THAT THE AFORESAID ACCOUNT OF THE ASSESSE E IN THE BOOKS OF ACCOUNTS OF M/S HML A.PVT.LTD., WAS A RUNNING AC COUNT AND THAT HE WAS A DIRECTOR IN THE SAID COMPANY, BESIDES AN EMPLOYEE OF THE SAID COMPANY ALSO. THE ASSESSEE SUBMITTED THAT THE REMUNERATION PAYABLE FOR SERVICES RENDERED BY THE A SSESSEE AS AN EMPLOYEE IS CREDITED IN THE AFORESAID ACCOUNT AND T HE MONIES FOUND DEBITED IN THE AFORESAID ACCOUNT WERE NOTHING BUT THE ITA NO.541(B)/2011 3 REMUNERATION DRAWN BY THE ASSESSEE FROM TIME TO TIM E. THE ASSESSEE SUBMITTED THAT THE AMOUNT OUTSTANDING AND PAYABLE BY THE ASSESSEE TO M/S HML A.PVT.LTD., IS NEITHER A LO AN OR ADVANCE WITHIN THE MEANING OF SEC.2(22)(E) OF THE ACT. THE ASSESEE ALSO FURTHER SUBMITTED THAT ON 05-05-2007, THE ASSESSEE WAS PAID A SUM OF RS.10.00 LAKHS BY M/S HML A.PVT.LTD., AND TH IS SUM WAS IMMEDIATELY GIVEN TO THE ASSESSEES HUSBAND FOR THE PURPOSE OF PURCHASING A PROPERTY FOR THE BENEFIT OF M/S HML A. P.VT.LTD., THE ASSESSEE THEREFORE, SUBMITTED THAT IN SO FAR AS THE SUM OF RS.10.00 LAKHS IS CONCERNED, IT WAS NOTHING BUT A PAYMENT FO R PURCHASE OF A PROPERTY ON BEHALF OF M/S HMLPVT.LTD., WHICH CANNOT BE SAID TO BE LOAN OR ADVANCE WITHIN THE MEANING OF SEC.2(22)(E) OF THE ACT. 5. THE AO HOWEVER, DID NOT ACCEPT THE CONTENTIONS PUT FORTH ON BEHALF OF THE ASSESSEE. HE WAS OF THE VIEW THAT WH EN MONIES ARE PAID WITHOUT SUFFICIENT CREDIT BALANCE IN AN ACCOUN T, THE SAME WOULD BE IN THE NATURE OF A LOAN OR ADVANCE. IN THI S REGARD, THE AO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF P.SHARADA VS CIT IN 229 ITR 444(SC). ON THE SAME B ASIS, THE AO ALSO HELD THAT THE AMOUNTS DRAWN CANNOT BE LINKED W ITH THE SALARY AS SALARIES WERE NOT DUE, WHEN THE MONIES WERE DRAW N BY THE ASSESSEE OR THERE WAS NO SUFFICIENT CREDIT OF SALAR Y. THE AO HAS ALSO GIVEN DETAILS OF WITHDRAWALS WITHOUT SUFFICIEN T CREDIT IN THE ACCOUNT. 6. WITH REGARD TO THE SUM OF RS.10.00 LAKHS PAID O N 5.5.07, WHICH WAS CLAIMED BY THE ASSESSEE TO BE A PAYMENT MADE TO MRS. MOIUDDIN, THE ASSESSEES HUSBAND FOR PURCHASE OF A PROPERTY. THE AO WAS OF THE VIEW THAT THERE WAS NO REASON WHY THE MONEY WAS NOT GIVEN DIRECTLY BY M/S HML A.PVT.LTD., TO THE SE LLER OF THE PROPERTY. THE AO HELD THAT THERE WAS NO SUBSTANCE IN THE PLEA PUT FORTH BY THE ASSESSEE IN THIS REGARD. FOR ALL THE ABOVE REASONS, THE ITA NO.541(B)/2011 4 AO ADDED A SUM OF RS.11,66,743/- AS DEEMED DIVIDEND , WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE. 7. ON APPEAL BY HE ASSESSEE, THE CIT(A) HELD AS FO LLOWS; 2.33 HAVING HEARD THE ARGUMENT OF THE APPELLANT, I T IS NECESSARY TO GO THROUGH THE PROVISIONS OF CLAUSE (E ) OF SUB- SECTION(22) OF SEC.2 OF THE IT ACT, WHICH READS AS UNDER; DIVIDEND INCLUDES- A).. B).. C) D) . E) ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF A NY SUM (WHETHER AS REPRESENTING A PART OF THE ASSETS OF TH E COMPANY OR OTHERWISE) (MADE AFTER 31 ST DAY OF MAY, 1987, BY WAY OF ADVANCE OR LOAN TO A SHAREHOLDER, B EING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIXED RATE OF DIVIDEND WHETHER WITH OR WITHOUT RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS THAN TEN PERCENT OF THE VOTING POWER, OR TO ANY CON CERN IN WHICH SUCH SHARE HOLDER IS A MEMBER OR A PARTNER AN D IN WHICH HE HAS A SUBSTANTIAL INTEREST (HEREAFTER IN T HIS CLAUSE REFERRED TO AS THE SAID CONCERN) OR ANY PAYM ENT BY ANY SUCH COMPANY ON BEHALF, OR FOR THE INDIVIDUA L BENEFIT, OF ANY SUCH SHAREHOLDER, TO THE EXTENT TO WHICH THE COMPANY IN EITHER CASE POSSESSES ACCUMULATED PROFITS. THERE IS NO DISPUTE ABOUT THE FACT THAT THE APPELLA NT IS BENEFICIAL OWNER OF SHARES HOLDING MORE THAN 10% OF THE VOTING POWER. IT IS ALSO UNDISPUTED FACT THAT M/S HML A.PVT.LTD., IS A COMPANY IN WHICH PUBLIC ARE NOT SU BSTANTIALLY INTERESTED AND IT IS UNDISPUTED FACT THAT ON THE DA TE OF THE PAYMENTS WHICH HAVE BEEN CONSIDERED BY THE AO AS DE EMED DIVIDEND, HE COMPANY WAS HAVING ACCUMULATED PROFITS . THE ONLY ISSUE OF DISPUTE ACCORDING TO THE APPELLANT IS AS TO WHETHER THE PAYMENTS MAD TO THE APPELLANT ARE IN TH E NATURE OF ADVANCE OR LOAN. THE AR OF THE APPELLANT IN THE ENTIRE SUBMISSION STRONGLY ADVOCATED THAT THE PAYMENTS MAD E TO THE APPELLANT ARE NOT IN THE NATURE OF LOAN OR ADVA NCE. HOWEVER, HE IGNORED THE FACT THAT NOT ONLY LOAN OR ADVANCE BUT ALSO ANY OTHER PAYMENT BY THE COMPANY ON BEHALF F, OR FOR THE INDIVIDUAL BENEFIT OF ANY SHARE HOLDER, COM ES UNDER THE PURVIEW OF DEEMED DIVIDEND UNDER SECTION 2(22)( E) OF THE IT ACT. THE HONBLE SUPREME COURT IN THE CASE OF N AVANIT LAL ITA NO.541(B)/2011 5 C JAVERI VS K.K.SEN(56 ITR 198) ON PAGE 202 AFTER ANALYSIS OF THE CONDITIONS OF 2(6A)9E) OF THE IT ACT, 1922 W HICH IS AKIN TO SEC.2(22)(E) OF THE IT ACT, 1961 HELD THAT FOLLO WING THREE KINDS OF PAYMENT ARE TAXABLE AS DIVIDENDS TO THE EX TENT OF THE ACCUMULATED PROFITS HELD BY THE COMPANY; 1) PAYMENT TO THE SHARE-HOLDER BY WAY OF ADVANCE OR LO AN 2) PAYMENTS MADE ON HIS BEHALF; AND 3) PAYMENT MADE FOR HIS INDIVIDUAL BENEFIT. THE PAYMENTS MADE BY M/S HML A.PVT.LTD., TO THE APP ELLANT WHICH HAVE BEEN ANALYSED ON THE BASIS OF THE NOTING S IN THE LEDGER ACCOUNT OF M/S HML A.PVT.LTD., IN PARA-4.1 O F THE ASSESSMENT ORDER. IT IS CLEAR THAT HE PAYMENTS OF R S.240/- ON 10-04-2007 AND RS.5,029/- ON 11-04-2007 AND DEPOSIT OF RS.10.00 LAKHS ON 05-05-2007 IN THE SAVINGS BANK AC COUNT OF THE APPELLANT ARE IN THE NATURE OF PAYMENT FOR T HE INDIVIDUAL BENEFIT OF SHARE HOLDER (I.E. APPELLANT) . THE VARIOUS DECISIONS ON WHICH THE RELIANCE HAS BEE N PLACED BY THE APPELLANT ARE NOT APPLICABLE TO THE CASE OF THE APPELLANT AS IN THOSE CASES, IT WAS PROVED THAT THE PAYMENTS WERE MADE FOR THE PURPOSES OF THE BUSINESS. FURTHER , THE ARGUMENT OF THE APPELLANT THAT ONCE THE INCOME HAS BEEN ASSESSED UNDER THE HEAD SALARY HE PROVISIONS OF DEEMED DIVIDEND ARE NOT APPLICABLE IS NOT ACCEPTABLE IN VI EW OF THE PROVISIONS OF SEC.2(22)(E) OF HE IT ACT. HOWEVER, THE ARGUMENT THAT DEEMED DIVIDEND COMPUTED AFTER 05-05- 2007 IS NOT CORRECT IS FOUND ACCEPTABLE IN VIEW OF THE F ACT THAT ONCE THE DEBIT BALANCE AS ON 10-04-2007, 11-04-2007 AND 05-05- 2007 IS ASSESSED AS DEEMED DIVIDEND UNDER SECTION 2 (22)(E) OF THE IT ACT, THE DEBIT BALANCE TO THAT EXTENT CAN NOT BE CONSIDERED AS DEBIT BALANCE FOR SUBSEQUENT PAYMENTS TO THE APPELLANT BY THE COMPANY. CONSIDERING THE ABOVE, THE DEEMED DIVIDEND ASSESSEE BY THE AO IS UPHELD TO THE EXTENT OF RS.9,60,983/- (240 + 5269 + 9,55,744) AGAINST TH E ADDITION OF RS.11,66,743/- MADE BY THE AO. 8. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNE D COUNSEL FOR THE ASSESESEE WHILE REITERATING THE STAND OF THE AS ESESSEE AS PUT FORTH BEFORE THE REVENUE AUTHORITIES, FILED BEFORE US A COPY OF THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ITA NO.541(B)/2011 6 SHYAMA CHARAN GUPTA VS CIT 337 ITR 511(ALL.). IN T HE AFORESAID CASE, THE ASSESSEE WAS A MANAGING DIRECTOR OF A COM PANY AND HE RECEIVED ADVANCE OF SALARY AND COMMISSION ON PROFIT S. THE SAME WAS TREATED AS DEEMED DIVIDEND AND TAXED IN THE HAN DS OF THE MANAGING DIRECTOR. THE HONBLE ALLAHABAD HIGH COUR T HELD THAT THE ADVANCE TOWARDS SALARY WHICH WAS DUE TO AN ASSE SSEE AND CREDITED TO HIS ACCOUNT EVERY MONTH COULD NOT BE TR EATED AS DEEMED DIVIDEND. FURTHER, RELIANCE WAS PLACED ON TH E FOLLOWING DECISIONS FOR THE PROPOSITION THAT THE FINANCIAL TR ANSACTIONS IN THE NORMAL COURSE OF BUSINESS CANNOT BE TREATED AS LOAN S OR ADVANCE AND TAXED UNDER SEC.2(22)(E) OF THE ACT. THE CIT VS AMBASSADOR TRAVELS PVT.LTD., 318 ITR 376, CIT VS CREATIVE DY EING AND PRINTING PVT.LTD., 318 ITR 476 AND ASST. CIT VS HA RSHAD V DOSHI 136 TTJ 351. THE LEARNED DR REITERATED THE STAND O F THE REVENUE AS REFLECTED IN THE ORDERS OF THE REVENUE AUTHORITI ES. 9. WE HAVE GIVEN CAREFUL CONSIDERATION TO THE RIVA L SUBMISSIONS. A COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE AS APPEA RING IN THE BOOKS OF ACCOUNT AS M/S HML A.PVT.LTD., IS EXTRACTE D IN PAGE-3 OF THE ORDER OF THE ASSESSMENT. PERUSAL OF THE SAME S HOWS THAT AS ON 10-04-2007, THE COMPANY PAID RS.240/- AS LIC PREMIU M ON BEHALF OF THE ASSESSEE. SIMILARLY, ON 11-04-2007 THEY PAID RS.5,029/- TOWARDS INCOME TAX. ON 05-05-2007, THE COMPANY PAI D RS.10.00 LAKHS TO THE ASSESSEE. THE NARRATION IN THE BOOKS OF THE COMPANY SAYS THAT THIS AMOUNT WAS TRANSFERRED FROM THE ASSE SSEES ACCOUNT TO THE ASSESSEES HUSBAND MR. MOIUDDIN FOR MAKING A DVANCE PAYMENT TOWARDS LAND AT BALA. AS ON THE DATE WHEN THIS PAYMENT MADE BY THE ASSESSEE COMPANY TO THE ASSESSEE THERE WAS NOTHING PAYABLE BY THE COMPANY HML A. LTD TO THE ASSESSE. HOWEVER, ON 30-04-2007, THE ASSESSEE WAS TO RECEIVE SALARY OF R S.49,555/-. THEREAFTER, THERE ARE SEVERAL CREDIT ENTRIES AND DE BIT ENTRIES. IT IS CLEAR FROM THESE ENTRIES FROM 30-01-2007 TO 31-03-2 008 THAT THE ITA NO.541(B)/2011 7 DEBITS IN THE ACCOUNT OF THE ASSESSEE WAS LESS THAN THE CREDITS IN THE ACCOUNT OF THE ASSESSEE. THEREFORE, WHAT IS TO BE SEEN FOR APPLYING THE PROVISIONS OF SEC.2(22)(E) OF THE ACT IS ONLY ENTRIES FROM 10-04-2007 TO 05-05-2007. FOR READY REFERENCE , A PHOTO COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE AS APPEARED I N THE BOOKS OF M/S HML A.PVT.LTD., IS ENCLOSED ALONGWITH THIS ORDE R. 10. THE PLEA OF THE ASSESSEEE WAS THAT IN HIS CAPA CITY AS DIRECTOR OF THE COMPANY, THE ASSSESSEE WAS ENTITLED TO REMUN ERATION AND THE PAYMENTS MADE FROM 10-04-2007 TO 05-05-2007 ARE NOTHING BUT ADVANCE RECEIPT OF SALARY. IN THIS REGARD, THE CASE OF THE ASSESSEE WAS THAT MORE THAN RS.18.00 LAKHS REMUNERA TION WAS PAID TO THE ASSESSEE DURING THE PREVIOUS YEAR, WHER EAS THE AMOUNT TREATED AS DEEMED DIVIDEND WAS ONLY A SUM OF RS.9,6 0,983/-. THE MAIN THRUST OF THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS ON THE DECISION OF THE HONBLE ALLAHAB AD HIGH COURT IN THE CASE OF SHAYMA CHARAN GUPTA VS CIT 337 ITR 5 11(ALL.) WE HAVE PERUSED THE AFORESAID DECISION AND WE FIND THA T IN THAT CASE, THE ASSESSEE WAS MANAGING DIRECTOR OF A COMPANY AND RECEIVED ADVANCE OF SALARY AND COMMISSION AND PROFITS. AS FA R AS COMMISSION AND PROFITS WERE CONCERNED, THE ADDITION MADE ON ACCOUNT OF DEEMED DIVIDEND WAS UPHELD BY THE HONBL E HIGH COURT. THE HONBLE HIGH COURT HELD THAT COMMISSION ON PROF ITS WILL BECOME DUE ONLY AFTER THE ACCOUNT PERIOD AND ANY CO MMISSION RECEIVED PRIOR TO DETERMINATION OF THE COMMISSION A FTER ASCERTAINMENT OF PROFITS WILL HAVE TO BE TREATED AS ADVANCE ATTRACTING THE PROVISIONS OF SEC.2(22)(E) OF THE AC T. AS FAR AS THE SALARY IS CONCERNED, THE FACTUAL POSITION WAS THAT SALARY WAS DRAWN AFTER CREDIT IN THE ACCOUNT AND IT WAS HELD THAT TH E SAME COULD NOT BE TREATED AS DEEMED DIVIDEND. IN THE PRESENT CASE , THERE WAS NO CREDIT IN THE ACCOUNT OF THE ASSESSEE BETWEEN 10-04 -2007 AND 05- 05-2007 EXCEPT A SUM OF RS.49,555/-WHICH WAS REMUNE RATION ITA NO.541(B)/2011 8 PAYABLE TO THE ASESSEE. AS WE HAVE ALREADY SEEN, T HE PAYMENTS MADE TO THE ASSESSEEE ON 10-04-2007, 11-04-2007 AND 05-05- 2007 WAS A SUM OF RS.5,029/- AND RS.10.00LAKHS RESP ECTIVELY. THUS, RS.9,55,744/- HAD BEEN PAID TO THE ASSESSEE W ITHOUT ANY CREDIT IN THE ASSESSEES ACCOUNT BY THE ASSESSEE CO MPANY. IN OUR OPINION, SUCH PAYMENT CANNOT BE SAID TO BE TOWARDS SALARY. AS ON THESE DATES, THE FUTURE SALARIES CANNOT BE SAID TO HAVE ACCRUED OR ARISEN TO THE ASSESEEE AND THEREFORE, A SUM OF RS.9 ,55,744/- CANNOT BE SAID TO BE SALARY DRAWN BY THE ASSESSEE N OT ATTRACTING THE PROVISIONS OF SEC.2(22)(E) OF THE ACT. WE ARE THEREFORE, OF THE VIEW THAT THE ORDER OF THE CIT(A) ON THIS ISSUE HAS TO BE UPHELD. 11. ANOTHER PLEA OF THE LEARNED COUNSEL FOR THE AS ESSSEE WAS THAT THE PAYMENT OF RS.10.00 LAKHS MADE BY THE COMPANY T O THE ASSESSEE ON 05-05-2007 WAS MEANT TO BE TRANSFERRED TO MR.MOIUDDIN ACCOUNT FOR THE PURCHASE OF LAND ON BEH ALF OF THE COMPANY. ON THIS PLEA, WE FIND THAT THE AO IN PARA -4.10 OF HIS ORDER HAS CLEARLY BROUGHT OUT AS TO HOW THERE WAS L ACK OF EXPLANATION FROM THE ASSESSEE AS TO HOW THE AMOUNT WAS NOT DIRECTLY PAID TO THE ASSESSEE COMPANY IN OUR VIE W, THE PLEA OF THE ASSESSEE IN THIS REGARD CANNOT BE ACCEPTED. 12. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELI ED ON CERTAIN DECISIONS FOR THE PREPOSITION THAT FINANCIAL TRANSA CTIONS IN THE NORMAL COURSE OF BUSINESS CANNOT BE TREATED AS LOAN OR ADVANCE WITH IN THE MEANING OF SEC.2(22)(E) OF THE ACT. A S WE HAVE ALREADY SEEN IN THE PRESENT CASE, THE ASSESSEE HAS FAILED T O ESTABLISH THAT THE TRANSACTIONS IN QUESTION WERE FINANCIAL TRANSAC TIONS IN THE NORMAL COURSE OF BUSINESS OF THE ASSESSEE. IN THES E CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) ITA NO.541(B)/2011 9 DESERVES TO BE UPHELD. WE UPHOLD THE SAME AND DISMI SS THE APPEAL OF THE ASSESSEE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE SEPT ., 2012. (JASON P BOAZ) (N.V.VASUD EVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE: D A T E D : AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-IV, BANGALORE. 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE (1+1) BY ORDER SR. PRIVATE SECRETARY ITAT, BANGALORE