ITO,Ward-29(4), Kolkata, Kolkata V. Shri Anup Mittal, Kolkata

ITA 898/KOL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5118 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 11-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2012
• Court: TRIBUNAL
• Department Lawyers: MD S S ALAM JCIT LD
• Assessee Lawyers: A K TIBREWAL FCA LD
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

ITA NO.898/KOL/2012- C-AM SH.ANUP MITTAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, KOLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER, A ND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 898/KOL/2012 A.Y 2008-09 I.T.O WARD 29(4), KOLKATA VS. SHRI ANUP MITTAL PAN: AIMPM660 7R (APPELLANT) (RESP ONDENT) FOR THE APPELLANT/DEPARTMENT: MD. S.S ALAM, JCIT, LD.SR.DR FOR THE RESPONDENT/ASSESSEE : S HRI A.K TIBREWAL, FCA, LD.AR DATE OF HEARING: 11-02-2016 DATE OF PRONOUNCEMENT: 17 -02-2 016 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE ARISE OUT OF THE ORDER OF THE LEARNED CIT(A)-XVI, KOLKATA IN APPEAL NO. 42/CIT(A)-XVI/IT/29(4)/10-11 DATED 14-09-2011 FOR THE ASSESSMENT YEAR 2008-09 AGAINST THE ORDER OF ASSESS MENT FRAMED BY THE LEARNED AO U/S. 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFE RRED TO AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPE AL OF THE REVENUE IS AS TO WHETHER THE ADDITION COULD BE MADE TOWARDS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASS ESSEE IS AN INDIVIDUAL. HE IS ALSO A SHAREHOLDER IN M/S.MIDAS YARN PROCESSOR LTD. A SUM OF RS.1,25,00,000/- WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 28-09-2007 AS A MOUNTS RECEIVED FROM THE SAID COMPANY. THE ASSESSEE EXPLAINED THAT HE HAD NEITHER DRAWN ANY MONEY FROM THE CONCERN IN WHICH HE IS A SHAREHOLDER NOR THE SAID COMPANY H AD MADE ANY PAYMENT TO THE ASSESSEE. ITA NO.898/KOL/2012- C-AM SH.ANUP MITTAL 2 THE ASSESSEE ALSO EXPLAINED THAT THE MISTAKE WAS CO MMITTED BY THE BANKER BY WRONGLY CREDITING THE ASSESSEES ACCOUNT BY WAY OF TRANSFER OF FUNDS FROM ONE ACCOUNT TO THE BANK ACCOUNT OF ASSESSEE. THE ASSESSEE HAS ALSO EXPLAINE D THAT THE BANKER HAD DULY RECTIFIED THE SAID MISTAKE BY RE-TRANSFERRING THE SAID FUNDS FROM ASSESSEES ACCOUNT TO THE ACCOUNT OF THE SAID COMPANY ON 1/10/2007 FOR WHICH THE ASSESSE E WAS DIRECTED TO ISSUE A CHEQUE IN FAVOUR OF THE SAID COMPANY. IN VIEW OF THESE FACTS, THE ASSESSEE PLEADED THAT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT CANNOT BE INVOKED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HOWEVER, THE LD.AO PROCEEDED TO MAKE A N ADDITION U/S. 2(22) (E) OF THE ACT TO THE TUNE OF RS. 73,01,312/- ON THE BASIS OF EFFECT IVE BALANCE OUTSTANDING ON THE DATE OF TRANSACTION. ON 1 ST APPEAL, THE LD. CIT(A) HAD DELETED THE ENTIRE ADDI TION MADE ON THIS COUNT. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT MIDAS YARN PROCESSOR LTD. DID NOT GIVE LOAN OR ADVANCE OF RS.1,25,22,222/- TO THE ASSESSEE AS ON 28/09/200 7 WHICH CAUSED THE ADDITION OF RS.73,01,312/- IN THIS CASE U/S 2(22)(E ) OF THE I TAX ACT'61. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THAT THE TRANSFER OF AN AMOUN T OF RS.1,25,00,000/- IN ASSESSEE'S BANK ACCOUNT FROM THE BANK ACCOUNT OF TH E COMPANY WAS NOTHING BUT A WRONG ENTRY MADE BY THE BANK WHICH WAS SUBSEQ UENTLY CLAIMED TO HAVE BEEN REVERSED SINCE THE AMOUNT OF REVERSAL WAS FOUN D TO BE MADE BY THE ASSESSEE BY ISSUE OF CHEQUE AND AS PER RULE OF BANK ING OPERATION ANY ERRONEOUS ENTRY BY THE BANK IS REVERSED BY THE BANK ITSELF AND ISSUANCE OF CHEQUE BY THE PARTY IS NO MORE REQUIRED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY ,INCLUDE OR DELETE ANY OF THE GROUNDS OF APPEAL . 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BEFORE US. THE FACT S OF THE CASE AS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITER ATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE LEDGER ACCOUNT OF THE ASSESSEE AS AP PEARING IN THE BOOKS OF M/S. MIDAS YARN PROCESSORS LTD THAT THIS TRANSACTION OF RS. 1,25,00 ,000/- WAS NOT AT ALL REFLECTED IN THE BOOKS OF THE COMPANY AS AMOUNTS PAID TO THE ASSESSE E AS LOAN OR ADVANCE OR OTHERWISE. WE ALSO FIND LOT OF FORCE IN THE ARGUMENTS OF THE L D.AR OF THE ASSESSEE THAT THE BANKER ITA NO.898/KOL/2012- C-AM SH.ANUP MITTAL 3 MADE A MISTAKE BY WRONGLY CREDITING THE ASSESSEES ACCOUNT ON 28-09-2007, WHICH WAS ON FRIDAY AND SUCH MISTAKE WAS DULY RECTIFIED ON IM MEDIATE SUCCEEDING WORKING DAY THAT WAS ON 1/10/2007 DUE TO REGULAR BANK HOLIDAYS BY TH E BANKER. THE LD.AR ALSO PLACED HIS RELIANCE ON THE CERTIFICATE ISSUED BY THE BANKER I N THIS REGARD, WHICH IS ENCLOSED AT PAGE 14 OF THE ASSESSEES PAPER BOOK. IT IS PERTINENT T O RE-PRODUCE THE SAME AT THIS JUNCTURE:- PUNJAB NATIONAL BANK POPULAR HOUSE ASHRAMROAD AHMEDADABD 079-26585106/26583223/26583223(FAX) MR. ANUP MITTAL 22.12.2010 I B RIVER VIEW APPARTMENT NEAR DINESH HALL ASHRAM ROAD AHMEDABAD DEAR SIR, REG: YOUR LETTER DATED 11.12.2010 THIS IS IN REFERENCE TO YOUR LETTER DATED 11.12.201 0 ENCLOSING THERE WITH A COPY OF THE NOTICE DATED 09.12.2010 RECEIVED BY YOU FROM IN COME TAX DEPARTMENT IN RESPECT TO YOUR ASSESSMENT CASE. IN THE ABOVE CONNECTION, WE WOULD LIKE TO INFORM, T HAT DUE TO OVERSIGHT AN AMOUNT OF RS.L,25,00,000/- WAS TRANSFERRED ON 28.09.2007 T O YOUR SAVING ACCOUNT NO. 0960000100178183 FROM A/C NO. 0960008700002097. THE ABOVE MISTAKE CAME TO OUR KNOWLEDGE ON 30.09.2 007, BUT THIS DAY BEING A HOLIDAY ON ACCOUNT OF HALF YEARLY CLOSING, THE ENTR Y OF RS. L,25,00,000/- WAS REVERSED ON 01.10.2007 FROM THE SAVING ACCOUNT NO. 0960000100178183 TO A/C NO. 0960008700002097. YOURS SINCERELY, SD/- CHIEF MANAGER/CHIEF MANAGER ASHRAM ROAD BRANCH, AHMEDABAD PUNJAB NATIONAL BANK ITA NO.898/KOL/2012- C-AM SH.ANUP MITTAL 4 WE ALSO FIND LOT OF FORCE IN THE ARGUMENTS OF THE L D.AR THAT THE CHEQUE OF RS.1,25,00,000/- WAS ISSUED IN FAVOUR OF THE COMPAN Y ON 1/10/2007 AT THE INSTANCE OF THE BANKER. WE ALSO FIND FROM THE SAID CERTIFICATE AS R EPRODUCED HEREIN ABOVE THAT THE BANKER HAD COMMITTED A MISTAKE WRONGLY AND DULY RECTIFIED THE SAME ON 1/10/2007. WE FIND LOT OF FORCE IN THE ARGUMENTS THAT THE PROVISIONS OF SE CTION 2(22)(E) WOULD BE APPLICABLE ONLY WHEN THE PAYMENT MADE IN THE FORM OF LOAN/ADVANCE T O A SHAREHOLDER. IN THE INSTANT CASE, HE ARGUED THAT NO PAYMENT WAS ACTUALLY EFFECTED BY THE SAID COMPANY TO THE ASSESSEE BEING SHAREHOLDER NOR WAS IT REFLECTED IN THE BOOKS OF ACCOUNT OF THE SAID COMPANY. IN VIEW OF THIS FACT, WE HOLD THAT THE SAID COMPANY D ID NOT GIVE ANY LOAN/ADVANCE TO THE ASSESSEE BEING SHAREHOLDER BY INVOKING THE PROVISIO NS OF SECTION 2(22)(E) OF THE ACT. ACCORDINGLY, WE FIND NO INFIRMITY IN THE IMPUGNED O RDER OF THE LD.CIT(A) IN DOING SO. WE UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AS STATED ABOVE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 17-02- 2016 1.. THE APPELLANT: THE ITO, WARD 29(4), AAYKAR DAK SHIN, 4 TH FL., KOL-68. 2 THE RESPONDENT- SHRI ANUP MITTAL 11/1 NEW ROAD, KOL-27. 3 /THE CIT, 4.THE CIT(A ) SD/- ( N.V. VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 17 -02-2016 COPY OF THE ORDER FORWARDED TO:- ITA NO.898/KOL/2012- C-AM SH.ANUP MITTAL 5 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS