ACIT, CHENNAI v. Shri Vinod Kumar Garg, CHENNAI

ITA 1541/CHNY/2009 | 2003-2004
Pronouncement Date: 02-07-2010 | Result: Dismissed

Appeal Details

RSA Number 154121714 RSA 2009
Assessee PAN AALPG0679Q
Bench Chennai
Appeal Number ITA 1541/CHNY/2009
Duration Of Justice 9 month(s) 1 day(s)
Appellant ACIT, CHENNAI
Respondent Shri Vinod Kumar Garg, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 02-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 02-07-2010
Date Of Final Hearing 24-06-2010
Next Hearing Date 24-06-2010
Assessment Year 2003-2004
Appeal Filed On 01-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NOS. 1541 AND 1543/MDS/2009 ASSESSMENT YEARS: 2003-04 AND 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE V(2) 121 N. H. ROAD NUNGAMBAKKAM CHENNAI 600 034. VS. SHRI VINOD KUMAR GARG 13A LETANG ROAD VEPERY CHENNAI 600 007. [PAN: AALPG0679Q] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN ASSESSEE BY : SHRI T. VASUDEVAN O R D E R PER GEORGE MATHAN J.M. I.T.A. NO. 1541/MDS/2009 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) V CHENNAI IN APPEAL NO. 18 8/06-07 DATED 17.07.2009 FOR THE ASSESSMENT YEAR 2003-04. I.T.A. NO. 1543/MDS/20 09 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) V CHEN NAI IN APPEAL NO. 425/07-08 DATED 17.07.2009 FOR THE ASSESSMENT YEAR 2005-06. A S BOTH THE APPEALS RELATE TO SAME ASSESSEE THE SAME ARE DISPOSED OFF BY THIS CO MMON ORDER. SHRI P.B. SEKARAN LD. CIT - DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI T. VASUDEVAN ADVOCATE REPRESENTED ON BEHALF OF THE AS SESSEE. 2. IN THE APPEAL OF THE REVENUE IN I.T.A. NO. 1541 /MDS/2009 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2.1 THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.27 08 803/- MADE AS UNEXPLAINED CASH CREDIT BY THE ASSESSING O FFICER. 2.2 THE LD. CIT(A) FAILED TO APPRECIATE THE FINDING OF THE ASSESSING OFFICER THAT THE DONOR OF THE GIFT SHRI AMITAVA R OY OF I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 2 SINGAPORE WAS NEITHER RELATED TO THE ASSESSEE NOR HAD ANY BUSINESS DEALING WITH THE ASSESSEE. 2.3. THE LD. CIT(A) OUGHT TO HAVE NOTED THAT IT IS WELL SETTLED THAT MERE IDENTIFICATION OF DONOR OR RECEIPT OF AMOUNT THROUGH BANKING CHANNEL IS NOT SUFFICIENT TO SATISFY THE R EQUIREMENT OF A GENUINE GIFT. 2.4. HAVING REGARD TO THE DECISION OF THE HONBLE P UBJAB & HARYANA HIGH COURT IN THE CASE OF SUBASH CHAND VER MA V. CIT (311 ITR 239) THE LD. CIT(A) OUGHT TO HAVE UP HELD THE ACTION OF THE ASSESSING OFFICER. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTOR ED. 2. 1. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSES SEE HAD CREDITED AN AMOUNT OF RS.27 08 803/- IN THE CAPITAL ACCOUNT OF THE ASS ESSEE. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD QUESTIONED THIS CREDIT AN D THE ASSESSEE HAS SUBMITTED THAT THE SAME WAS THE PROCEEDS OF THE GIFTS OF INDI AN MILLENNIUM DEPOSITS (IMDS) ISSUED BY THE STATE BANK OF INDIA IN DECEMBER 2000 WHICH WAS GIFTED TO THE ASSESSEE BY HIS FRIEND A NRI IN SINGAPORE BY NAME SHRI AMITAVA ROY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD NOT PRODUCED ANY D OCUMENTARY EVIDENCE TO PROVE THAT SHRI AMITAVA ROY HAD GIVEN THE GIFT OF T HE IMDS TO THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD T REATED THE GIFT RECEIVED BY THE ASSESSEE AS BOGUS. IT WAS THE SUBMISSION THAT T HE LD. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT THE ASSESSEE HAD PRODUC ED THE LETTER SENT BY THE STATE BANK OF INDIA NRI BRANCH MUMBAI WHICH GAVE THE CERTIFICATE NUMBERS AND OTHER PARTICULARS OF THE CONCERN IMDS AND NAME AND FULL ADDRESS OF THE TRANSFEROR SHRI AMITAVA ROY AND CONFIRMED HAVING REGISTERED TH E ABOVE MENTIONED IMDS IN THE ASSESSEES NAME IN THEIR RECORDS . IT WAS THE SUBMISSION THAT AS THE I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 3 ASSESSEE HAD NOT PROVED THE GENUINENESS OF THE GIFT THE ORDER OF THE LD. CIT(A) IS LIABLE TO BE REVERSED. 3. IN REPLY THE LD. AR PLACED BEFORE US THE COPY OF THE LETTER OF STATE BANK OF INDIA NRI BRANCH MUMBAI DATED 14.03.2002 CONFIRMIN G THE TRANSFER OF THE IMDS ON 06.02.2002. HE FURTHER PLACED BEFORE US THE COPY OF THE SBIS IMDS BROCHURE. IT WAS THE SUBMISSION THAT THE DEPOSITS HAD BEEN GI FTED BY SHRI AMITAVA ROY TO THE ASSESSEE AND THE ASSESSEE HAD ALSO PRODUCED THE CERTIFICATE FROM THE BANK TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS ALSO NOT DONE ANYTHING MORE OTHER THAN ASKING THE ASSESSEE TO PROVE THE GE NUINENESS OF THE GIFT. IT WAS THE SUBMISSION THAT WITHOUT THERE BEING A GIFT AND NECESSARY TRANSFER DOCUMENTS THE DEPOSITS COULD NEVER HAVE BEEN TRANSFERRED FROM THE NAME OF SHRI AMITAVA ROY TO THE ASSESSEE. THE FACT THAT THE SBI NRI BRAN CH MUMBAI HAD TRANSFERRED THE SAID IMDS TO ASSESSEES NAME AND THE INTIMATION HAS ALSO BEEN SENT TO SHRI AMITAVA ROY IN SINGAPORE ITSELF PROVES THE GENUINEN ESS. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO PERUSED THE LETTER ISSUED BY THE SBI NRI BRANCH MUMBAI DATED 1 4.03.2002 AND ALSO THE BROCHURE IN RESPECT OF THE SBIS IMDS. AT THE OUT S ET IT IS NOTICED THAT THE TRANSFER OF THE IMDS HAVE TAKEN PLACE ON 06.02.2002 RELATING TO THE ASSESSMENT YEAR 2002-03. IN THE CIRCUMSTANCES AS THE GIFT HAS BEEN DONE IN THE ASSESSMENT YEAR 2002-03 THE SAME CANNOT BE CONSIDERED FOR THE ASSE SSMENT OR VERIFICATION IN THE COURSE OF ASSESSMENT YEAR 2003-04. COMING TO THE ME RITS ALSO THE SBI NRI BRANCH MUMBAI WHO IS THE ISSUER OF THE IMDS HAS C ONFIRMED THE IMDS OF THE I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 4 VALUE OF THE 50000 USD HAVE BEEN TRANSFERRED FROM T HE NAME OF SHRI AMITAVA ROY TO THE NAME OF THE ASSESSEE. THE NAME AND THE A DDRESS OF SHRI AMITAVA ROY IS AVAILABLE IN THE LETTER OF SBI. THE SBI IN T HEIR LETTER HAVE ALSO CONFIRMED THE MODE OF TRANSFER AS GIFT. IT IS ALSO NOTICED FR OM THE ASSESSMENT ORDER THAT THE ASSESSEE HAD PRODUCED THE LETTER FROM THE SBI NRI B RANCH MUMBAI WHEREIN IT HAS BEEN MENTIONED THAT THE IMD CERTIFICATE HAVE BE EN PREMATURELY CLOSED ON 08.04.2002 AND THE AMOUNT OF RS.27.08.803/- HAS BEE N PAID TO THE ASSESSEE. THUS IT GETS CRYSTALLIZED THAT THE AMOUNT OF RS.27 08 803/- IS NOTHING BUT THE ENCASHMENT OF THE IMDS OF 50000 USD. A PERUSAL OF T HE BROCHURE IN RESPECT OF THE SBI IMDS ALSO CLEARLY SPECIFIES THAT THE INTERE ST INCOME IS FREE FROM INCOME TAX IN THE HANDS OF RESIDENT DONEE. THUS IT BECOMES EVIDENT THAT EVEN ASSUMING THAT THIS IS THE UNACCOUNTED MONEY OF THE ASSESSEE WHICH HAS BEEN INVESTED IN THE IMDS THE SAME SHOULD HAVE BEEN CONSIDERED ONLY IN THE YEAR OF INVESTMENT OR ALTERNATIVELY IN THE YEAR IN WHICH THE IMDS WERE TRANSFERRED TO THE ASSESSEE WHICH IN THE PRESENT CASE IS NOT THE YEAR UNDER APP EAL. FURTHER THE ASSESSING OFFICER HAVING BEEN IN POSSESSION OF THE LETTER FRO M THE SBI CONFIRMING THE TRANSFER OF THE IMDS FROM SHRI AMITAVA ROY TO THE A SSESSEE AS ALSO THE LETTER OF SBI CONFIRMING THE PREMATURE ENCASHMENT OF IMDS HA S NOT DONE ANYTHING TO SHOW OR EVEN DRAW A SUSPICION THAT THE TRANSACTION IS A SHAM OR FALSE CLAIM. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FIND ING AS ARRIVED BY THE LD. CIT(A) IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INT ERFERENCE. IN THE CIRCUMSTANCES THE APPEAL OF THE REVENUE IS DISMISSED. I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 5 5. I.T.A. NO. 1543/MDS/2009: IN THE REVENUES APPE AL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2.1. THE LD. CIT(A) ERRED IN HOLDING THAT LABOUR CH ARGES RECEIVED BY THE ASSESSEE FOR CARRYING ON MANUFACTURE ON BEHALF OF OTHERS WOULD BE ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE I .T. ACT. 2.2. HAVING REGARD TO THE NARROW IMPORT OF THE TERM DERIVED FROM USED IN SEC.80IB IN CONTRADISTINCTION TO THE PHRA SE ATTRIBUTABLE TO THE LD. CIT(A) OUGHT TO HAVE UP HELD THE ACTION OF THE ASSESSING OFFICER. 3.1 THE LD. CIT(A) ERRED IN HOLDING THAT NO ADDITIO N IN TERMS OF SEC.2(22)(E) WAS CALLED FOR THEREBY DELETING THE ADDITION OF RS.5 80 70 000/-. 3.2 THE LD. CIT(A) FAILED TO NOTE THAT THE ENTIRE R UNNING ACCOUNTS OF THE ASSESSEE IN HIS INDIVIDUAL NAME AND IN THE NAM E OF HIS PROPRIETARY CONCERNS IN THE BOOKS OF M/S. PUSHPIT STEELS PVT. LTD. OUGHT TO HAVE BEEN ANALYZED AND IF ON SUCH AN ALYSIS THE ASSESSEE WAS FOUND TO HAVE DEBIT BALANCE AT ANY TI ME DURING THE RELEVANT PERIOD AFTER RETURN OF LOAN TO M/S. PUSHPIT STEELS PVT. LTD. SUCH BALANCE(S) WOULD HAVE TO BE TAXED AS DEEMED DIVIDEND. 3.3 THE LD. CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDE RATION THE DECISIONS OF THE HONBLE APEX COURT IN THE CASES O F TARULATA SHYAM (108 ITR 345) AND MISS P. SARADA (229 ITR 44 4). 4.1 THE LD. CIT(A) ERRED IN HOLDING THAT RECEIPTS F ROM SALE OF WASTE PRODUCTS OF RS.43 26 226/- WOULD BE ELIGIBLE FOR D EDUCTION U/S.80IB OF THE I.T. ACT. 4.2 HAVING REGARD TO THE NARROW IMPORT OF THE TERM DERIVED FROM USED IN SEC.80IB IN CONTRADISTINCTION TO THE PHRA SE ATTRIBUTABLE TO THE LD. CIT(A) OUGHT TO HAVE UP HELD THE ACTION OF THE ASSESSING OFFICER. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTOR ED. I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 6 6. AT THE TIME OF HEARING IT IS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE IN GROUNDS NO. 2.1 AND 2.2 AND 4.1 AND 4.2 ARE SQUAREL Y COVERED BY THE DECISION OF THE COORDINATED BENCH OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05 IN I.T.A. NOS. 1540 AND 1542/MDS/2009 ORDER DATED 08.01.2010 WHEREIN THE COORDINATED BEN CH OF THE TRIBUNAL HAS HELD AS FOLLOWS: 4. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTEN TIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. UNDISPUTEDLY THE LABOUR CHARGES WERE RECEIVED ON MANUFACTURING DONE ON STEE L BELONGING TO THIRD PARTIES. THAT THERE WAS MANUFACTURING ACTIVIT Y CARRIED OUT BY THE ASSESSEE COULD THUS BE NOT DISPUTED. AS LONG AS MANUFACTURING ACTIVITY WAS DONE BY THE ASSESSEE OWNERSHIP OF THE RAW-MATERIAL WOULD NOT BE RELEVANT AND THEREFORE WE ARE OF THE O PINION THAT LEARNED COMMISSIONER (A) WAS CORRECT IN ALLOWING DE DUCTION UNDER SECTION 80IB OF THE ACT TO THE ASSESSEE ON LABOUR C HARGES RECEIVED FOR SUCH MANUFACTURING WORK. IN SO FAR AS WASTE PRO DUCTS ARE CONCERNED UNDISPUTEDLY THESE WERE DERIVED FROM IND USTRIAL ACTIVITY OF THE INDUSTRIAL UNDERTAKING AND THUS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. WE THEREFORE FIND NO REASO N TO INTERFERE WITH THE ORDER OF THE COMMISSIONER (A). IN THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE DE CISION OF COORDINATED BENCH OF THE TRIBUNAL IN I.T.A. NOS. 1540 & 1542/MDS/2009 G ROUNDS NO. 2.1 & 2.2 AND 4.1 & 4.2 OF THE REVENUES APPEAL STANDS DISMISSED. 7. IN REGARD TO GROUNDS NO. 3.1 3.2 AND 3.3 IT W AS SUBMITTED BY THE LD. DR THAT THE ASSESSEE HAD TAKEN LOAN FROM M/S. PUSHPIT STEELS PVT. LTD. (PSPL) WHERE HE WAS MANAGING DIRECTOR TO AN EXTENT OF RS. 5 80 70 000/-. IT WAS THE SUBMISSION THAT A PERUSAL OF THE LEDGER ACCOUNT OF PSPL IN THE BOOKS OF V.K.STEEL ENTERPRISES (VKSE) WHICH IS A PROPRIETAR Y CONCERN OF THE ASSESSEE SHOWED THAT IT HAD RECEIVED A SUM OF RS.5 80 70 000 /- LOAN FROM M/S. PSPL ON I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 7 VARIOUS DATES. IT WAS SUBMITTED THAT THOUGH THE ASS ESSEE HAD REPAID NEARLY RS.4.04 CRORES IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF MISS P. SARADA V. CIT (229 ITR 444) THE LOAN TA KEN BY THE ASSESSEE WAS LIABLE TO BE TREATED AS DEEMED DIVIDEND. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAS DELETED THE ADDITION BY HOLDING THAT THE ASSESS EE HAD GIVEN AN UNSECURED LOAN OF RS.1 73 06 227/- TO M/S. PSPL IN AUGUST 20 03 AND THUS AS ON 01.04.2004 M/S. PSPL WAS DUE TO THE ASSESSEE THIS AMOUNT. FURTHER THE OUTSTANDING BALANCE AS ON 31.03.2005 IN THE NAME OF THE ASSESSEE IN HIS PROPRIETARY CONCERN OF M/S. VKSE WAS SHOWN AS SUNDR Y DEBTOR FOR AN AMOUNT OF RS.86 25 183/- IN THE BOOKS OF M/S. PSPL. IT WAS AL SO NOTICED BY THE LD. CIT(A) THAT ANOTHER PROPRIETARY CONCERN OF THE ASSESSEE NA MELY M/S. PULKIT STEEL REROLLING MILLS ALSO APPEARS IN THE BOOKS OF THE CO MPANY M/S. PSPL AS A SUNDRY DEBTOR FOR AN AMOUNT OF RS.52 76 023/-. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAS HELD THAT THERE WAS NO LOAN GIVEN BY M/S. PSPL TO THE ASSESSEE AND CONSEQUENTLY DELETED THE ADDITION MADE BY THE ASSES SING OFFICER. HE VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 8. IN REPLY THE LD. AR SUBMITTED THAT M/S. PSPL W AS DUE TO THE ASSESSEE AS ON 01.04.2004 AN AMOUNT OF RS.1 73 06 227/-. THIS A MOUNT WAS WITHDRAWN ON VARIOUS BILLS AND RECEIPTS AS REQUIRED BY THE ASSES SEE FOR THE USE OF THE PROPRIETARY CONCERN OF THE ASSESSEE. THE ASSESSEE H AD ALSO BEEN PUMPING IN MONEY FROM THE PROPRIETARY CONCERN OF THE ASSESSEE TO M/S. PSPL. IT WAS THE SUBMISSION THAT THIS HAD RESULTED IN TOTAL CREDIT O F RS.5 82 50 190 AND DEBIT OF RS.4 06 44 779/- IN THE BOOKS OF M/S. PSPL. IT WAS THE SUBMISSION THAT AT NO I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 8 POINT OF TIME DURING THE YEAR THE ASSESSEE WAS DUE TO M/S. PSPL ANY AMOUNT. IT WAS ALWAYS THE OTHER WAY ROUND M/S. PSPL WAS DUE T O THE ASSESSEE. THE NET OF THE TRANSACTION AS ON 31.03.2005 ALSO SHOWED THAT M /S. PSPL WAS DUE TO THE ASSESSEE IN HIS PROPRIETORSHIP CONCERN VKSE FOR AN AMOUNT OF RS.86 25 183/- AND IN THE PROPRIETORSHIP CONCERN M/S. PULKIT STEEL REROLLING MILLS AN AMOUNT OF RS.52 76 023/-. IT WAS THE FURTHER SUBMISSION THAT THE LD. CIT(A) HAS RIGHTLY APPRECIATED THAT NO AMOUNT WAS DUE FROM THE ASSESSE E TO THE PRIVATE LIMITED COMPANY AND CONSEQUENTLY HAD HELD THAT THERE WAS NO QUESTION OF MAKING ANY ADDITION ON ACCOUNT OF DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). H E FURTHER SUBMITTED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F MISS P. SARADA (SUPRA) IN FACT IT WAS IN FAVOUR OF THE ASSESSEE IN SO FAR AS THE HONBLE SUPREME COURT HAS CATEGORICALLY ACCEPTED IN PRINCIPLE THAT IF THE ASS ESSEE HAD CREDIT BALANCE WITH THE COMPANY AND THE WITHDRAWALS ARE OUT OF THE CRED IT BALANCE THE SAME COULD NOT BE TREATED AS DEEMED DIVIDEND. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO PERUSED THE LEDGER ACCOUNT OF M/S. VKSE IN THE BOOKS OF M/S. PS PL FOR THE PERIOD FROM 01.04.2004 TO 31.03.2005. IT IS NOTICED THAT THE OP ENING BALANCE IS AT A CREDIT OF RS.89 80 227/-. THE TRANSACTION DURING THE RELEVANT ASSESSMENT YEAR AT NO POINT OF TIME LEADS TO A DEBIT BALANCE. A PERUSAL OF THE ACCOUNTS OF M/S PSPL IN THE BOOKS OF VKSE ALSO SHOWS THAT THE IDENTICAL PICTURE . IT IS ALSO NOTICED THAT THE TRANSACTION BETWEEN M/S. VKSE AND M/S. PSPL IS MORE IN THE NATURE OF RUNNING ACCOUNT WHERE M/S. VKSE THE PROPRIETORSHIP CONCERN OF THE ASSESSEE HAS BEEN I.T.A. NO I.T.A. NO I.T.A. NO I.T.A. NOS SS S. .. . 1541 & 1543 1541 & 1543 1541 & 1543 1541 & 1543/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 9 PRACTICALLY GIVING FUNDS TO M/S. PSPL MORE IN THE N ATURE OF OVER DRAFT ACCOUNT. THUS IT IS NOTICED THAT THE COMPANY M/S. PSPL AT N O POINT OF TIME HAS GIVEN LOAN TO THE ASSESSEE. THE ASSESSEE HAD IN FACT GIVEN LO AN TO M/S. PSPL. A PERUSAL OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF MISS P. SARADA V. CIT (SUPRA) SHOWS THAT THE HONBLE SUPREME COURT HAS AC CEPTED THE PRINCIPLES OF THE WITHDRAWALS FROM THE CREDIT BALANCE COULD NOT BE CO NSIDERED FOR DEEMED DIVIDEND AS IT WOULD NOT BE A LOAN GIVEN BY THE COMPANY TO T HE SHAREHOLDERS. HERE IT IS NOTICED THAT THE COMPANY HAS NOT GIVEN ANY LOAN TO THE ASSESSEE BUT IN FACT THE ASSESSEE HAD GIVEN LOAN TO THE COMPANY. IN THE CIRC UMSTANCES THE FINDING OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD AND CONSEQUENTLY GROUNDS NO. 3.1 3.2 AND 3.3 STANDS DISMISSED. 10. GROUNDS NO. 1 AND 5 ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 11. IN THE RESULT APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.07.2010. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 02.07.2010. VM/- COPY TO : APPELLANT/RESPONDENT/CIT(A)- /CIT /DR