The assessee was a substantial shareholder of the companypany and was drawing funds from the companypany till 22.3.1973.
The assessees appeal to the Appellate Assistant Commissioner was dismissed.
1,831.14 as on 22.3.1973.
At the material time she did number have any credit balance in her account with the companypany.
A point was taken that the High Court has reappraised the fact and has disbelieved the letter dated 3.4.1972 which was accepted as genuine by the Tribunal.
The assessee was a substantial shareholder of the companypany and was drawing funds from the companypany till 22.3.1973.
7,998.00 3.10.72 Rs.
In order to pay her these sums of money the account of Mahesh was number debited at all.
93,027.
vs. Commissioner of Income Tax, West Bengal, 108 ITR 345 that the statutory fiction created by Section 2 6A e of the Indian Income Tax Act, 1922 would companye into operation at the time of the payment of advance or loan to a shareholder by the companypany.
1 lakh from out of his account.
93,027 cannot be assessed under Section 2 22 e of the Income Tax Act, 1961 for the year 1973 74.
At the instance of the Commissioner of Income Tax, the following question of law was referred to the High Court under Section 256 1 of the Income Tax Act.
5,000.00 2.9.72 Rs.
The High Court has proceeded on the basis of the facts found by the Tribunal.
As a result of various withdrawals made by the assessee, her credit balance had been entirely wiped out and in fact her account with the companypany showed excess withdrawal of a sum of Rs.
The particulars of the withdrawals are as under 3.7.72 Rs.
1,831.14 Excess withdrawal 3.8.72 Rs.
However, on further appeal, the Tribunal upheld the case of the assessee.
A letter dated 3.4.1972 written by Shri A.P. Madhavan, the father of the minor Mahesh, was relied upon by the Tribunal.
There is numberdispute that the assessee had withdrawn various sums of money between 3.7.1972 and 22.3.1973 when she did number have any credit balance with the companypany.
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is companyrect in law in holding that the withdrawals made by the assessee from messers Universal Radiators Private Limited Totalling Rs.
In that letter madhavan had directed the companypany to make available to the assessee Miss p. Sarada a sum of Rs.
5,000.00 11.12.72 Rs.
3,930.
93,027 in the companyputation of the appellants income.
The appellant had a running account with the companypany.
7,998.00 18.12.72 Rs.
4,749.00 18.12.72 Rs.
8, 522.00 2.1.73 Rs.
5,000.00 3.2.73 Rs.
5,000.00 5.3.73 Rs.
5,000.00 9.3.73 Rs.
7,999.00 17.3.73 Rs.
10,000.00 22.3.73 Rs.
93,027.00 According to the assessee, the withdrawals had number been made from the companypanys account but from the amount standing to the credit of Mahesh in the books of the companypany.
The High Court pointed out that the alleged letter dated 3.4.1972 was given effect to by the companypany only on 31.3.1973 by debiting a sum of Rs.
1 lakh from the account of Mahesh and crediting it to the account o the assessee.
But the assessee had steadily and regularly withdrawn monies form the companypany between 3.7.1972 to 22.3.1973.
These withdrawals were number made by debiting the credit balance of Mahesh which remained intact till 31.3.1973.
The High Court took numbere of the fact that the accounting period for the relevant assessment year 1973 74 was 1.4.1972 to 31.3.1973.
In spite of debit balance the assessee between 3.7.1972 to 22.3.1973 on fourteen different dates withdrew a total a sum of Rs.
It is a companypany in which public were number substantially interested.
The Income Tax officer included this amount of Rs.
5,000.00 3.11.97 Rs.
The High Court companycluded that the various withdrawals made by the assessee were from the companypanys accumulated profits.
This excess withdrawal was treated by the Income Tax officer as deemed dividend under Section 2 22 e of the Income Tax Act on two grounds 1 The assessee had numbercredit balance in her accounts with the said companypany at the material time and 2 that there was sufficient accumulated profits of the companypany from which the excess withdrawal was made by the assessee.
5,000.00 12.9.72 Rs.
The Tribunal held that t he withdrawals made by the appellant will have to be taken as paid out of the money lying to the credit of another shareholder Shri A.C. Mahesh and number out of the accumulated profits of the companypany.
5,000.00 1.12.72 Rs.
The High Court answered the question in the negative and in favour of to Revenue.
93,027 from the companypany.
The Tribunal found that mahesh owed some money to the assessee and as Mahesh had directed repayments of the amount due to the assessee from out of his credit balance in the companypany, the withdrawals made by the assessee had to the companypany, the withdrawals made by the assessee had to be treated as withdrawals from the account of Mahesh and number from the accumulated profits of the companypany.
Ltd. hereinafter referred to as the Company .
While companypleting the assessment of the appellant for the assessment year 1973 74, the Income Tax officer found that during the period 3.7.1972 to 22.3.1973 she had withdrawn a total sum of Rs.
SEN,J. The appellant, Miss P. Sarada, is a major shareholder of Messers Universal Radiators Pvt.
