TMI Blog2011 (10) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(3) of the Act, made in assessment by the AO. The Ld. CIT(A) was equally wrong and unjustified in confirming the action of the AO without judiciously considering and appreciating the facts of the case. Actions of the AO and Ld. CIT(A) were unreasonable, uncalled for and bad in law. 3. For that your petitioner craves the right to put additional grounds and/or to alter/amend/modify the present grounds at the time of hearing. 3. Grounds raised in Revenue's appeal are as under: 1. Ld. Commissioner of Income Tax (Appeals) erred, in law and on the facts and circumstances of the case, in deleting the addition of ₹ 20,86,980/- made by the AO on account of bogus creditors. 2. The appellant craves the right to modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal. 4. Brief facts are that the assessee is a non-employee director of M/s Shree Krishna Credit Securities Pvt. Ltd. ( SKCSPL ) and no salary or director's fee was paid to the assessee. The assessee's husband is also a director of another group concern M/s Shree Krishna Paper Mills Industries Ltd. ( SKPMIL ). It is the case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions were through broker and Mr. U.R. Bhandari insisted on paying the cash to reimburse himself. Since there was a dispute about the payment, Mr. U.R. Bhandari had taken a hostile stand. (4) During the cross-examination of Shri U.R. Bhandari, he admitted that he sold some shares through Shri V.K. Gupta and delivered them. He admitted the sale of 25300 shares by bill no. UBF/96-97- 005 dated 9-7-96, which he claimed not sold to assessee but to SKCSPL. (5) The assessee made the purchase in her name and bills were also issued in her name, which bear the signature of Shri U.R. Bhandari as authorized signatory of UB Financial Services. (6) These shares were duly sent to company for recording the transfer in the name of assessee showing the date of transfer as 3-9-1996 for 14700 shares. (7) The assessee issued cheque on 24-7-06 from her personal bank a/c no. 22164 with Oriental Bank of commerce Chawri Bazar, Delhi. 6.1. It was pleaded that assessee had discharged its preliminary burden in respect of identity, genuineness and creditworthiness. During the course of cross-examination, assessee's counsel asked Shri U.R. Bhandari to provide specimen of his signature, who dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any - Amount spent by Company assessable as income of assessee - Income-tax Act, 1961 s. 2(24). The facts of the case of the assessee are similar. The assessee had visited foreign countries with her husband and therefore, in her own case provisions of section 2(24)(iv) become applicable as she is relative of the Managing director of the company namely SKPMIL. No evidence is placed on reward to establish that the visit of the assessee was for the business of the company concerned. According to these provisions, the amounts incurred of her visit is duly chargeable to tax in her hands. It is immaterial if the said sum incurred has been offered to tax in the hands of the company because both are operating in distinct and separate fields. So far as the case of company is concerned, the provisions of section 37(1) are applicable to determine the income chargeable to tax under the head business or profession while in the case of the assessee concerned, the applicability of the provisions of section 2(24) is of relevance. In view of the above, the contention of the Ld. AR of the assessee is not accepted. In this backdrop, I hold that the action of the AO in taxing the amount incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly. In the light of the above, I hold that no addition on this account can be upheld in the case of the assessee and accordingly AO is directed to delete the addition so made. 6.5. Against the aforesaid action of the CIT(A), deleting the additions, the Revenue is in appeal before the ITAT. 7. Learned counsel for the assessee contends that as far as Revenue's appeal is concerned, CIT(A) has given the relief on both the counts i.e. the credit having been received in earlier year, cannot be added in this year. Besides, on merit also it has been held that Shri Bhandari's statement is not reliable as proper inquiries were not carried out by AO. The CIT(A)'s order is perfectly justified. 7.1. Coming to the assessee's appeal, learned counsel for the assessee contends that it is not disputed that the assessee was a non-employee director of the said company i.e. SKCSPL. There is no relation at all of employer - employee between the assessee and SKCSPL, provisions of sec. 17(2)/17(3) are not attracted. 7.2. Learned counsel further contends that the reliance placed by the CIT(A) on Madras High Court judgment in the case of Ravi Prakash Khemka Vs. CIT 295 ITR 33 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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