Nate Nandha Nee Natarajan Nandhagopal, CHENNAI V. ACIT, CHENNAI

MA 192/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6445 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDIPCIT
• Assessee Lawyers: J PRABHAKAR
• Keywords: Deemed dividend
• Section: 2(22)(e)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . !'# ! , $ !% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRIA. MOHAN ALANKAMONY, ACCOUNTANT MEMBER && / M.P. NO.192/CHNY/2018 (IN I.T.A. NO.278/CHNY/2017) ' (' / ASSESSMENT YEAR : 2009-10 SHRI NATE NANDHA, NO.6, 6 TH STREET, RUTLAND GATE, CHENNAI - 600 006. PAN : AACPN 7263 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 3, CHENNAI - 600 034. (*+' /PETITIONER) (*,+-/ RESPONDENT) *+' / 0 /PETITIONER BY : SHRI J. PRABHAKAR, CA *,+- / 0 / RESPONDENT BY : SHRI SAILENDRA MAMIDI, PCIT 1 / 2$ / DATE OF HEARING : 11.01.2019 3'( / 2$ / DATE OF PRONOUNCEMENT : 18.01.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THE ASSESSEE FILED THE PRESENT MISCELLANEOUS PET ITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER OF T HIS TRIBUNAL DATED 08.06.2018. 2. SHRI J. PRABHAKAR, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, REFERRING TO PAGE 7 OF THE TRIBUNAL ORDER, MORE PAR TICULARLY PARA 10, 2 M.P. NO.192/CHNY/18 SUBMITTED THAT THIS TRIBUNAL OBSERVED THAT THERE WA S NO MATERIAL AVAILABLE ON RECORD TO ESTABLISH THE ADJUSTMENT OF EXCESS AMOUNT PAID TO THE MANAGING DIRECTOR. ACCORDING TO THE LD . REPRESENTATIVE, THIS TRIBUNAL ALSO OBSERVED THAT THE REQUIRED MATER IAL WAS NOT FILED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THIS TRIBUNAL. REFERRING TO THE PAPER-BOOK FILED BY THE ASSESSEE, MORE PARTICULARLY AT PAGE 37, THE LD. REPRESENTATIVE SUBMITTED THAT A SUM OF 96,71,000/- WAS ENTERED IN THE ACCOUNTS WHICH WAS A LREADY FILED NOT ONLY BEFORE THE TRIBUNAL BUT ALSO BEFORE BOTH T HE AUTHORITIES BELOW. THEREFORE, ACCORDING TO THE LD. REPRESENTAT IVE, THIS OBSERVATION IS NOT CORRECT. ON A QUERY FROM THE B ENCH THAT THE ENTRY WAS MADE ON 30.09.2009 WHICH FALLS IN THE ASS ESSMENT YEAR 2010-11, HOWEVER, THE ASSESSMENT YEAR UNDER CONSIDE RATION IS 2009-10, THEREFORE, HOW THAT WILL HELP THE ASSESSEE TO DECIDE THIS ISSUE? THE LD. REPRESENTATIVE SUBMITTED THAT THIS IS A FACTUAL ERROR AND THE DECISION MAY NOT CHANGE. HOWEVER, THE FACT THAT THE ASSESSEE FILED MATERIAL MAY BE BROUGHT ON RECORD. MOREOVER, ACCORDING TO THE LD. REPRESENTATIVE, SECT ION 2(22)(E) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IS NO T APPLICABLE TO THE PUBLIC LIMITED COMPANY. EVEN THOUGH THE ASSESSEE H AS RAISED A SPECIFIC GROUND AT GROUND NO.10, THIS WAS NOT DISPO SED OF. THE LD. 3 M.P. NO.192/CHNY/18 REPRESENTATIVE FURTHER SUBMITTED THAT SINCE THE PAY MENT WAS TAXED AS SALARY, SECTION 2(22) OF THE ACT ALSO MAY NOT BE APPLICABLE. 3. WE HEARD SHRI SAILENDRA MAMIDI, THE LD. DEPARTME NTAL REPRESENTATIVE ALSO. AT PARA 10 OF THE TRIBUNALS ORDER, THE FOLLOWING OBSERVATION MADE BY THE TRIBUNAL WITH REG ARD TO PRODUCTION OF RELEVANT MATERIAL FOR MAKING ADJUSTME NT APPEARS TO BE NOT CORRECT. IN FACT, THE ASSESSEE HAS PRODUCED TH E MATERIAL WHICH IS AVAILABLE AT PAPER-BOOK PAGE 37. THEREFORE, THI S OBSERVATION HAS TO BE DELETED. ACCORDINGLY, THE FOLLOWING OBSERVAT ION ON PAGE 7 AT PARA 10 OF THE TRIBUNAL ORDER IS DELETED. 10. EVEN THOUGH THE LD. REPRESENTATIVE FOR THE ASSESSEE CLAIMS THAT RECOVERY ADJUSTMENT WAS MADE I N THE BOOKS REGARDING EXCESS PAYMENT, NO MATERIAL IS AVAILABLE ON RECORD SHOWING THAT THE BOOK ENTRY HAS BEEN MADE ADJUSTING THE AMOUNT IN THE COMPANY ACCOUNT. SINCE THE REQUIRED MATERIAL WAS NOT FILED EITHER BEFORE T HE ASSESSING OFFICER OR BEFORE THE CIT(APPEALS) OR EVE N BEFORE THIS TRIBUNAL, MERE ORAL CLAIM THAT THE AMOU NT WAS ADJUSTED BY WAY OF BOOK ENTRY CANNOT BE ACCEPTED AT THIS STAGE. INSTEAD THE FOLLOWING SHALL BE INSERTED:- 10. THE LD. REPRESENTATIVE FOR THE ASSESSEE FILED THE COPIES OF THE ENTRIES IN THE COMPANY ACCOUNT WHICH SHOWS CERTAIN PAYMENTS ON 30.09.2009 WHICH FALLS IN THE ACCOUNTING YEAR 2009-10 RELEVANT TO ASSESSMENT YEAR 2010-11. THEREFORE, IT IS APPARENT 4 M.P. NO.192/CHNY/18 THAT DURING THE YEAR UNDER CONSIDERATION, THERE WAS NO ADJUSTMENT OR REPAYMENT. HENCE, WHAT WAS PAID DURING THE YEAR UNDER CONSIDERATION HAS TO BE CONSIDERED AS SALARY OF THE ASSESSEE. 4. NOW COMING TO GROUND NO.10 RAISED BY THE ASSESSE E, NO DOUBT, THIS GROUND OF APPEAL WAS NOT DISPOSED OF EA RLIER BY OVERSIGHT. WHEN A SPECIFIC GROUND HAS BEEN RAISED, IT HAS TO BE DISPOSED OF. AS RIGHTLY SUBMITTED BY THE LD. REPRE SENTATIVE FOR THE ASSESSEE, SECTION 2(22) OF THE ACT MAY NOT BE APPLI CABLE TO THE PUBLIC LIMITED COMPANY. MOREOVER, THE PAYMENT RECE IVED FROM COMPANY WAS TAXED AS SALARY, THEREFORE, IT CANNOT B E ONCE AGAIN BE DEEMED DIVIDEND UNDER SECTION 2(22) OF THE ACT. TH E ORDER OF THIS TRIBUNAL DATED 08.06.2018 IS RECTIFIED ACCORDINGLY. 5. WITH THE ABOVE OBSERVATION, THE MISCELLANEOUS PE TITION FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 18 TH JANUARY, 2019 AT CHENNAI. SD/- SD/- (. !'# ! ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH JANUARY, 2019. 5 M.P. NO.192/CHNY/18 KRI. / *26& 7&(2 /COPY TO: 1. *+' / PETITIONER 2. *,+- /RESPONDENT 3. 1 82 () /CIT(A) 4. 1 82 /CIT 5. &9 *2 /DR 6. :' ; /GF.