Law:

Section:

Section 2(22) (e) of the Income-tax Act, 1961 - Deemed dividend - Assessment years 1992-93 and 1993-94 - Advance towards salary, which was due to assessee and was credited to his account every month, could not be treated as deemed dividend, but advance of commission on profits over and above amount which was drawn during course of year before profits was determined and accrued to assessee, would be treated as deemed dividend subject to tax [Partly in favour of revenue] The assessee was the managing director of a company. In the assessment years 1992-93 and 1993-94, he was entitled to both salary and commission on profits. The Assessing Authority found that he had drawn advances both of salary and commission on profits and taxed them as deemed dividend under section 2(22)( e). Held that the advance towards salary, which was due to the assessee and was credited to his account every month could not be treated as deemed dividend, but the advance of commission on profits over and above that amount drawn during the course of the year before the profits were determined and accrued to the assessee, would be treated as a deemed dividend subject to tax. CASES REFERRED TO CIT v. Ashokbhai Chimanbhai [1965] 56 ITR 42 (SC), CIT v. Creative Dyeing and Printing (P). Ltd. [2009] 318 ITR 476 (Delhi), CIT v. Nagin Das M. Kapadia [1989] 177 ITR 393 (Bom.), CITv. Rajkumar [2009] 318 ITR 462 (Delhi), E.D. Sassoon and Co. Ltd. v. CIT [1954] 26 ITR 27 (SC) and Navnit Lal C. Javeri v. K.K. Sen, AAC [1965] 56 ITR 198 (SC). R.P. Agarwal for the Appellant. A.N. Mahajan for the Respondent. JUDGMENT 1. We have heard Shri R. P. Agarwal, learned counsel for the appellant. Shri A. N. Mahajan appears for the Department. 2. These two income-tax appeals under section 260A of the Income-tax Act, 1961, arise out of the orders passed by the Income-tax Appellate Tribunal dated March 24, 2003, relating to the assessment years 1992-93 and 1993-94. 3. The assessee was the managing director of M/s. Shyam Biri Works Pvt. Ltd. In the relevant assessment years 1992-93 and 1993-94, he was entitled to both salary and commission of profits. The assessing authority found that he has drawn advances both of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492