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TMI Blog2024 (3) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... DS was deducted before the date of survey for such salary and that no documentary evidences etc. were produced before the AO for this supposed salary amount, and ii. The learned CIT Appeal has ignored the vital evidence that the trial balance for the period 01.04.2016 till 20.09.2016 showed salary credited to the account of Shri Ashok Jain to be only Rupees 57,180/- whereas is in the loan and advance account the amount of rupees 1,82,00,000/- is shown, indicating that the hypothesis of salary payment was merely an afterthought and an eyewash with a view to attempt to escape from the dimming provisions of section 2(22)(e) relating to deemed dividend. 4. The appellant craves leave to add, amend or withdraw any of the grounds of appeal during the course of appeal proceedings." 3. The brief facts of the case are that the appellant Shri Ashok Jain, Sawan Shiv Marg, Ratitali, Udaipur Road Banswara is an individual. A search and seizure proceedings was carried out in the case of "WAGAD GROUP" of Banswara and other related entities/persons on 06-10-2017. The group is engaged in Roads Construction, Industrial Construction, Commercial construction, High level Bridge Contraction and Irri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s WagadInfraproject Pvt. Ltd, the trial balance for the period from 01.04.2016 to 20.09.2016 of the company along with relevant annexure were impounded vide exhibit 7 of Annexure A. On page 66 of this exhibit the total salary credited to the account of Sh. Ashok Jain is only Rs. 57,180/- till 20.09.2016and there is no debit entry in 'Remuneration- Ashok Jain' account whereas on page 102 of this exhibit, which is loan & advance account, the amount of Rs. 1,82,00,000/- is shown by the company under the head short term loan & advance to Sh. Ashok Jain. Till the date of survey the said amount was not part of remuneration to Sh. Ashok Jain & thus the claim of the assessee is not supported by the documentary evidences viz. whether the TDS was deducted before date of survey on this payment or any other relevant documentary evidences. Vide not sheet entry dated 23.12.2019, the assessee was asked to submit the relevant documentary evidences in this regard. However, the assessee has not submitted any relevant documentary evidences. Per contra the appellant argued that the books of accounts were incomplete at that time and all the entries made by the Junior accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dend, amounting to Rs.1,82,00,000/- by ignoring the facts that till the date of survey the said amount was not part of remuneration paid to Sh. Ashok Jain and no TDS was deducted before the date of survey for such salary and that no documentary evidence etc. were produced before the AO for the aforesaid salary amount. He further contended that the ld. CIT(A) has ignored the vital evidence that the trial balance for the period 01.04.2016 till 20.09.2016showed salary credited to the account of Sh. Ashok Jain to be only Rs. 57,180/- whereas in the loan and advance account the amount of Rs. 1,82,00,000/- is shown, indicating that the hypothesis of salary payment was merely an afterthought and an eyewash with a view to attempt to escape from the dimming provisions of section 2(22)(e) relating to deemed dividend. He prayed that the assessment order be restored. 6. Per contra, the defendant counsel has vehemently supported the order of the ld. CIT(A). It was submitted before the ld. AO that the company has paid remuneration of Rs.2,70,00,000/- to the assessee during the year under consideration and TDS of Rs.96,50,000/- was deducted. The assessee has shown income of Rs. 2,70,00,000/- in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t advance towards salary which wasdue to the petitioner and was credited to his account every month could not be treated as deemed dividend. Reliance was also placed on the judgment of Hon'ble Delhi High Court in 5 I.T.A.NO.- 4487/DEL/2010 the case of CIT vs Sunil Sethi wherein it was held that the advance which had been given by company to assessee who was the director in the said company was neither a loan nor was it for individual benefit of the said assessee and further held such advance was in the nature of imprest and same could not be treated as deemed dividend under the provisions of Section2(22)(e)of the Act. 5. The following other cases are also quoted in support:- (a) ITO Vs. Smt. Gayatri Chakraborty (2016) 45 ITR (Trib.) 197 (Kol.) Loan account is different from a current account with a shareholder: and so where transactions between shareholder and company are in nature of current account, provisions of section 2(22)(e) will not be applicable (Assessment Year 2009- 10) (In favour of assessee) (b) Principal CIT Vs. Anumod Sharma (132 taxmann.com 70/283 Taxman564) Delhi :- Where the assessee had not received any advance in nature of loan or advances as con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e advance given by the company was against his salary to be adjusted later on. In view of this it is wrong on the part of the revenue to take a ground that the "hypothesis of salary payment was merely an afterthought and an eyewash with a view to attempt to escape from the deeming provisions of section 2(22)(e) relating to deemed dividend". The allegation of afterthought is false. The Learned Assessing Officer himself has quoted the statement of the assessee in the assessment order on page 3 which was recorded at the time of survey. In view of this the ground taken by the revenue has no legs. The order of the Learned CIT(A) is based on sound logic and deserves to be confirmed. It is further submitted that during the course of assessment proceedings the assessee submitted necessary evidence by way of form no. 26AS where the amount of advance was covered as salary and TDS also stood made. These facts were ignored by the Learned Assessing Officer which were considered by the Learned CIT(A). The relevant part of the order of the Learned CIT(A) is quoted below - "On verification of computation of Income furnished with the return of income the contention of the appellant is found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of remuneration to Sh. Ashok Jain and that the claim of the assessee was not supported by the documentary evidences viz. whether the TDS was deducted before date of survey on this payment or any other relevant documentary evidences. 8. The counsel argued that the books of accounts were incomplete at the time of survey and all the entries made by the Junior accountant were not approved by management. The Junior accountant of the company has made the wrong entries of advance remuneration to Shree Ashok Jain in the account of short term loan account by mistake. This position has been clarified in the statement recorded u/s 131 of the Income Tax Act 1961 of Shri Ashok Jain. The Ld. CIT(A) has observed that it was submitted before the learned AO that the company has paid remuneration of Rs. 2,70,00,000/- to the appellant during the year under consideration and TDS of Rs. 96,50,000/- was deducted on the same. Further, the appellant has shown income of Rs. 2,70,00,000/- in his computation of income and due tax has been paidon the amount of Rs. 1,82,00,000/- as part of salary/remuneration paid to the assessee which the AO wrongly added as deemed dividend U/s 2(22)(e) of the income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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