Smt. Heena K. Trivedi,, Ambaji v. The Dy.CIT, Central Circle-2(2),, Ahmedabad

ITSSA 426/AHD/2013 | 2005-2006
Pronouncement Date: 06-10-2016 | Result: Allowed

Appeal Details

RSA Number 42620516 RSA 2013
Assessee PAN AAVPT8482E
Bench Ahmedabad
Appeal Number ITSSA 426/AHD/2013
Duration Of Justice 2 year(s) 10 month(s) 25 day(s)
Appellant Smt. Heena K. Trivedi,, Ambaji
Respondent The Dy.CIT, Central Circle-2(2),, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 06-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 06-10-2016
Date Of Final Hearing 04-10-2016
Next Hearing Date 04-10-2016
Assessment Year 2005-2006
Appeal Filed On 11-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAVJM & SHRI MANISH BORAD AM. IT(SS)A NOS.426 TO 428/AHD/2013 ASST. YEARS: 2005-06 TO 2007-08 SMT. HEENA K. TRIVEDI D.K. TRIVEDI & SONS PREMISES KHUMBHARIYA ROAD AMBAJI. VS. DCIT CC-2(2) AHMEDABAD. APPELLANT RESPONDENT PAN AAVPT 8482E APPELLANT BY JWALIN NANAVATI AR RESPONDENT BY SHRI JAGDISH CIT DR DATE OF HEARING: 4/10/2016 DATE OF PRONOUNCEMENT: 06/10/2016 O R D E R PER MANISH BORAD ACCOUNTANT MEMBER . THESE THREE APPEALS OF ASSESSEE FOR ASST. YEAR 200 5-06 TO 2007-08 ARE DIRECTED AGAINST THE COMMON ORDER OF LD . CIT(A)-III AHMEDABAD DATED 27/8/2013 IN APPEAL NO. CIT(A)-III/ 98 99 & 1000/DCIT/CC-2(2)/13-14 PASSED AGAINST ORDERS U/S 1 43(3) R.W.S. 153A OF THE IT ACT 1961 (IN SHORT THE ACT) FRAMED ON 30.03.2013 BY DCIT CC-2(2) AHMEDABAD. SINCE ASSESSEE HAS RAISE D COMMON GROUNDS IN ALL THESE THREE APPEALS AGAINST THE ADDI TION U/S 2(22)(E) OF THE ACT CONFIRMED BY THE LD. CIT(A) AT RS. 2 25 180/- 4 15 910/- AND RS.1 58 390/- FOR ASST. YEARS 2005-06 2006-07 & 20 07-08 THESE IT(SS)A NO. 426 TO 427/AHD/2013 ASST. YEAR 2005-06 TO 2007-08 2 APPEALS WERE HEARD TOGETHER AND BEING DISPOSED OF B Y THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS AN INDIVIDUAL AND DIRECTOR OF M/S TRIVEDI CORPORATION PVT. LTD. A SEARCH ACTION U/S 132(4) OF THE ACT WAS CARRIED OUT IN THE GROUP CASES OF TRIVEDIA SOMPURA ON 21.04.2010. NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE TO WHICH RETU RNS OF INCOME WERE FILED BY THE ASSESSEE FOR ALL THE THREE ASST. YEARS 2005-06 2006-07 & 2007-08. DURING THE COURSE OF ASSESSMENT PROCEEDING LD. ASSESSING OFFICER OBSERVED THAT M/S TRIVEDI CORPORA TION PVT. LTD. HAVING ACCUMULATED PROFITS HAS ADVANCED AMOUNT TO T HE ASSESSEE THROUGH HER SALARY A/C. ON PERUSAL OF THE LEDGER AC COUNT IT WAS OBSERVED THAT DIRECTORS SALARY IS MONTHLY BOOKED T HROUGH JOURNAL ENTRIES AND VARIOUS PAYMENTS ON ACCOUNT OF CREDIT C ARDS TRAVEL EXPENSES PERSONAL EXPENSES ARE PAID BY THE COMPANY ON BEHALF OF THE ASSESSEE. DURING THE YEAR AT SOME PARTICULAR DA TE OR AT THE CLOSE OF THE YEAR THERE STOOD DEBIT BALANCE IN THE NAME O F ASSESSEE IN THE BOOKS OF ACCOUNT OF TRIVEDI CORPORATION PVT. LTD. L D. ASSESSING OFFICER INVOKED PROVISIONS OF SECTION 2(22)(E) OF T HE ACT AND MADE ADDITION FOR DEEMED DIVIDEND FOR THE IMPUGNED DEBIT BALANCES IN THE LEDGER ACCOUNT AT RS. 2 25 180/- 4 15 910/- AND RS.1 58 390/- FOR ASST. YEARS 2005-06 2006-07 & 2007-08. 3. ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A). LD. C IT(A) CONFIRMED THE ADDITIONS FOR ALL THE THREE YEARS. IT(SS)A NO. 426 TO 427/AHD/2013 ASST. YEAR 2005-06 TO 2007-08 3 4. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. LD. AR SUBMITTED BY REFERRING TO THE LEDGER ACCO UNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNT OF TRIVEDI CORPORA TION PVT. LTD. FORMING PART OF THE ASSESSMENT ORDER THAT ASSESSEE IS REGULARLY EARNING SALARY/REMUNERATION INCOME FROM THE COMPANY AS A DIRECTOR WHICH STANDS AT RS.18 520/- P.M. UPTO 31 ST JULY 2004 AND WAS FURTHER INCREASED TO RS.39 920/- P.M. REGULAR MONTHLY ENTRI ES ARE PROVIDED FOR THE DIRECTORS REMUNERATION. IN THE VERY SAME L EDGER A/C PAYMENTS ARE MADE TOWARDS SALARY EITHER BY PAYING IN CASH B Y BANK OR BY MAKING DIRECT PAYMENTS TO VARIOUS AGENCIES FOR PERS ONAL TRAVEL AND CREDIT CARD EXPENSES OF THE ASSESSEE WHICH ARE ADJU STED AGAINST THE SALARY PAYABLE. LD. AR FURTHER SUBMITTED THAT ALL T HESE TRANSACTIONS ARE IN THE REGULAR COURSE OF BUSINESS AND THE CLOSI NG BALANCES ARE SOME- TIMES DEBIT AND SOME-TIMES CREDIT BUT CERTAIN LY NO INFERENCE SHOULD HAVE BEEN DRAWN FOR TREATING THE DEBIT BALAN CE AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. 6. ON THE OTHER HAND LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. SOLITARY GRIEVANCE OF THE ASSESSEE IN AL L THESE THREE APPEALS IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMI NG THE ADDITIONS TOWARDS DEEMED DIVIDENDS U/S 2(22)(E) OF THE ACT FO R THE MAXIMUM DEBIT BALANCE AT ANY POINT OF TIME OF PARTICULAR AS SESSMENT YEAR IN THE LEDGER ACCOUNT IN THE NAME OF ASSESSEE IN THE BOOKS OF ACCOUNT OF IT(SS)A NO. 426 TO 427/AHD/2013 ASST. YEAR 2005-06 TO 2007-08 4 TRIVEDI CORPORATION PVT. LTD. WE OBSERVE THAT THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE IS A DIRECTOR AND GETTING SA LARY FROM THE COMPANY TOWARDS THE SERVICES PROVIDED. THIS FACT IS EVIDENT FROM THE LEDGER ACCOUNT OF ASSESSEE IN THE BOOKS OF ACCOUNT OF TRIVEDI CORPORATION PVT. LTD. SHOWN IN THE ASSESSMENT ORDER ITSELF. THE CLEAR PICTURE WHICH COMES OUT FROM GOING THROUGH THE LEDG ER ACCOUNT IS THAT AS ON 1.4.2004 THERE WAS A CREDIT BALANCE AND DURIN G THE YEAR MONTHLY ENTRIES OF SALARY HAVE BEEN PROVIDED AND SA LARY PAYMENTS HAVE BEEN MADE EITHER IN CASH PAYMENT OF CREDIT CA RDS DUES & TRAVEL EXPENSES. TDS DEDUCTED AND PAYMENT BY BANK. DURING ASST. YEAR 2005-06 THE BALANCE REMAINED CREDIT AT VARIOUS POIN TS OF TIME. SIMILAR IS THE SITUATION FOR ASST. YEAR 2006-07 AN 2007-08. 8. WE FURTHER OBSERVE FROM THE JUDGMENT OF THE HON. ALLAHABAD HIGH COURT IN THE CASE OF SHYAMA CHARAN GUPTA VS. C IT 377 ITR 511 (ALL) WHEREIN IT HAS BEEN HELD THAT ADVANCE PAYMEN T OF SALARY OR COMMISSION TO MANAGING DIRECTOR IS A TRADE ADVANCE ORDINARILY MADE IN THE COURSE OF BUSINESS SO THAT SUCH ADVANCE IS N OT COVERED UNDER SECTION 2(22)(E) OF THE ACT. WE FIND THAT THE FACTS OF THE PRESENT CASE ARE QUITE SIMILAR TO THE FACTS ADJUDICATED BY HON. ALLAHABAD HIGH COURT IN THE CASE OF SHYAMA CHARAN GUPTA VS. CIT (S UPRA) SO MUCH SO THAT IN THE CASE OF ASSESSEE ALSO THE DEBIT BALA NCE AT CERTAIN POINT OF TIME ARE IN THE NATURE OF ADVANCE SALARY. WE TH EREFORE ARE OF THE VIEW THAT THE IMPUGNED DEBIT BALANCES CANNOT BE TER MED AS ADVANCE IN THE FORM OF DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT AS THEY ARE TRADE ADVANCE ORDINARILY MADE IN THE REGULAR COURSE OF BUSINESS. WE IT(SS)A NO. 426 TO 427/AHD/2013 ASST. YEAR 2005-06 TO 2007-08 5 DELETE THE ADDITIONS FOR ALL THE THREE YEARS AND AL LOW THE APPEALS OF THE ASSESSEE. 9. IN THE RESULT ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OCTOBER 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 6/10/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT AHMEDABAD 1. DATE OF DICTATION: 5/10/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 6/10/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7/10/2016 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: