2013 (8) TMI 514

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....12/- as deemed dividend under Section 2(22)(e) of the Income- tax Act, 1961. 4. At the time of hearing before us, it is stated by the learned counsel that the assessee derives income from rent and also from plying of trucks and he is also a shareholder in M/s Daisy Motors Pvt. Ltd., Hisar. That the assessee has let out his premises to M/s Daisy Motors Pvt. Ltd. and received annual rent of Rs. 1 lakh. That the assessee has a running account with M/s Daisy Motors Pvt. Ltd., copy of which is placed at pages 19 & 20 of the assessee's paper book. That most of the times, there is huge credit balance in the account of the assessee but, only occasionally, there was a debit balance. That the Assessing Officer has treated the debit balance as ....

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....py of the assessee's account in the books of M/s Daisy Motors Pvt. Ltd. is placed at pages 19 & 20 of the assessee's paper book. For ready reference, the same is annexed herewith as Annexure- 1 From a perusal of the above account, it is seen that there was opening credit balance, then debit balance occurred due to certain payments made by M/s Daisy Motors Pvt. Ltd. to the assessee in the month of April and July. Thereafter, from July 2005 to 22nd March, 2006, there was a credit balance and again on 30th March, 2006, there was a debit balance. If we further analyze the accounts, we find that the maximum debit balance of the account of the assessee was only Rs. 2,08,212/- while the maximum credit balance was more than Rs. 2 crores. Th....

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....ken by their Lordships in the case of Creative Dyeing and Printing P.Ltd. (supra). Respectfully following the above decisions of Hon'ble Jurisdictional High Court and applying the ratio of the above decisions to the facts of the assessee's case, we hold that the debit balance of Rs. 2,08,212/- cannot be treated to be deemed dividend under Section 2(22)(e) of the Act. Accordingly, the addition made by the Assessing Officer is deleted and ground No.2 of the assessee's appeal is allowed. 8. Ground No.3 of the assessee's appeal is against the addition of Rs. 83,510/- for unexplained expenditure on account of household expenses. 9. We have heard the arguments of both the sides and perused the material placed before us. We f....