Income Tax Appellate Tribunal - Kolkata
Acit, Cir-1, Jalpaiguri, Jalpaiguri vs Smt Sushila Devi Agarwala,, Siliguri on 1 September, 2017
आयकर अपील
य अधीकरण, यायपीठ - "C" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA BENCH "C" KOLKATA
Before Shri N.V.Vasudevan, Judicial Member and
Shri Waseem Ahmed, Accountant Member
ITA No.401/Kol/2015
Assessment Year :2011-12
ACIT, Circle-1, Ground V/s. Smt. Sushila Devi
Floor, C.R. Building, Agarwala, Mangal Palace,
Race Course Para, Ram Krishna Road,
Naya Busti, Jalpaiguri- Siliguri-734001
735101 [P AN No.SVTP A 8812 B]
अपीलाथ /Appellant .. यथ /Respondent
अपीलाथ क ओर से/By Appellant None
यथ क ओर से/By Respondent None
सन
ु वाई क तार
ख/Date of Hearing 25-07-2017
घोषणा क तार
ख/Date of Pronouncement 01-09-2017
आदे श /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-Jalpaiguri dated 27.02.2015. Assessment was framed by DCIT, Circle-1, Jalpaiguri u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 17.03.2014 for assessment year 2011-12.
2. At the time of hearing none appeared from side of Revenue as well as assessee in spite of issue of notice. There was no request for adjournment as well from either side. However we find that the appeal can be decided on the basis of materials available on record and without the assistance of either side i.e. Revenue or assessee.
ITA No.401/Kol/2015 A.Y. 2011-12ACIT Cir-1, Jal Vs. Smt. Sushila Devi Agarwala Page 2
3. Sole issue raised by Revenue in this appeal is that Ld. CIT-A erred in deleting the addition made by the Assessing Officer for ₹34,29,340/- u/s. 2(22)(e) of the Act.
4. Briefly stated facts are that assessee is an individual has drawn salary in the capacity of Director from the following companies:-
"Salary received from:-
1. Bidesh Plywood factory Rs. 9,00,00/-
2. Mars Plywood Private Ltd Rs.12,00,000/-
3. Rajni Merchants Rs. 1,20,000/-
Total Rs.22,20,000/-
During the course of assessment proceedings, AO observed that the assessee has taken loan from above two companies namely Bidesh Plywood & Mars Plywood during the year for ₹16 lakh and ₹ 18,29,341/- respectively.
Thus the assessee being a shareholder in the aforesaid companies is liable for taxation under the provision of Section 2(22)(e) of the Act. Accordingly, the AO treated the amount of loan taken by the assessee from these companies for Rs. 34,29,340.00 as deemed dividend and made the addition to the total income of the assessee.
4. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that she has provided loan to the companies in the beginning of financial year and same loan was repaid within the same financial year to the assessee. Therefore it cannot be termed as assessee has taken a loan from the companies and therefore there is no question of deemed dividend in the instant case. Ld. CIT(A) after considering the submission made by assessee deleted the addition made by AO by observing as under:-
"4. Conclusion- It is seen that the assessee had given loans to the companies in which she is a Director and the companies have repaid the loans to the assessee in the same FY. Section 2(22)(e) is applicable where the companies instead of declaring profit/dividend, advance the money to the persons who have substantial interests in the company to avoid payment of income tax. These loans are given out of profits/accumulated profits. In this case the assessee had advanced ITA No.401/Kol/2015 A.Y. 2011-12 ACIT Cir-1, Jal Vs. Smt. Sushila Devi Agarwala Page 3 loans to the companies and subsequently the companies repaid the loans. The loans to the company by the assessee do not form part of profits or accumulated profits. If the companies had advanced loans to the assessee out of the profit or accumulated profit, Section 2(22)(e) can be invoked to tax the loans deemed dividend in the hands of the assessee. In this case Section 2(22)(e) cannot be invoked. Theism order is cancelled. Appeal of the assessee is allowed."
The Revenue, being aggrieved, is in appeal before us.
5. Having perused the material available on record. We find that Ld. CIT(A) has given very clear finding that loan was repaid to the assessee. As such, assessee has taken no loan from the above stated companies which can be regarded as deemed dividend income in the hands of assessee. In this view of the matter, we find no reason to interfere with the findings arrived by the Ld. CIT(A). Under the circumstances, this issue of Revenue's appeal is dismissed.
6. In the result, Revenue's appeal stands dismissed.
Order pronounced in the open court 01/09/2017
Sd/- Sd/-
( या$यक सद&य) (लेखा सद&य)
(N.V.Vasudevan) (Waseem Ahmed)
(Judicial Member) (Accountant Member)
Kolkata,
*Dkp, Sr.P.S
(दनांकः- 01/09/2017 कोलकाता ।
आदे श क
त ल प अ े षत / Copy of Order Forwarded to:-
1. अपीलाथ /Appellant-ACIT, Circle-1, Ground Floor, C.R. Building, Race Course Para Naya Busti, Jalpaiguri-735101
2. यथ /Respondent-Smt. Sushila Devi Agarwala, Mangl Palace, Ram Krishna Road, Siliguri-734001
3. संबं3धत आयकर आय4 ु त / Concerned CIT Kolkata
4. आयकर आयु4त- अपील / CIT (A) Kolkata
5. 7वभागीय $त$न3ध, आयकर अपील य अ3धकरण, कोलकाता / DR, ITAT, Kolkata
6. गाड< फाइल / Guard file.
By order/आदे श से, /True Copy/ Sr. Private Secretary, Head of Office/DDO आयकर अपील य अ3धकरण, कोलकाता ।