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TMI Blog2025 (1) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... yments being personal in nature u/s. 37(1) of the Act while filing the return of income of the company for the assessment years under consideration. Once, the company, did not claim the credit card payments being personal in nature as business expenditure while computing the business income, (due to disallowance made by the company), the aforesaid credit card payment relating to personal in nature cannot be taxed again in the hands of the assessee-director as income u/s. 2(24)(iv) of the Act. AO himself has observed that during post search proceedings, the assessee suo motto submitted before the DDIT [Investigation] and disclosed the details of official expenditure and personal expenses of Directors related to the payment of credit card bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has already disallowed the credit card payment being personal in nature u/s. 37(1) of the Act. We shall narrate the facts in ITA Nos.3089/CHNY/2024 to 3092/CHNY/2024 (Israr Ahmed) concerning assessment years 2019-20 to 2022-23 and our finding rendered therein will apply mutatis mutandis to the other cases (since the facts are identical in all the cases except for variation in figures and name of the company in which the assessees are directors). ITA Nos.3089 to 3092/CHNY/2024 (AYs 2019-20 to 2022-23) - Israr Ahmed 3. Brief facts in relation to the above case are as follows:- The assessee is an individual. A search and seizure operation was carried out in the case of M/s. Farida group of companies and others on 23.08.2022. During the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-20 to 2022-23, the assessee preferred appeals before the First Appellate Authority. The CIT(A) rejected the submissions of the assessee and confirmed the addition made by the AO u/s. 2(24)(iv) of the Act. 5. Aggrieved by the orders of the CIT(A), the assessee has filed the present appeals before the Tribunal. The ld.AR submitted that the expenditure has already been disallowed in the hands of the company namely M/s.Farida Prime Tannery Pvt. Ltd. Therefore, the said sum cannot be added as a perquisite in the hands of the assessee Director. The ld.AR submitted that the provisions of section 2(24)(iv), 17(2)(iv) & 28(iv) of the Act is not applicable as the company has already disallowed the expenditure in its hands. Hence, it is not any be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections 2(24)(iv), 17(2)(iv), and 28(iv) of the Act are not applicable since the disallowed expenditure has already been taxed in the hands of the Company and does not constitute a "perquisite" or "benefit" derived by the assessee-director. 8. We find that expenditure has already been disallowed in the hands of the company and was not allowed as an expenditure as perquisite in the hands of the director. Therefore, the same cannot be added in the hands of the director since it will amount to taxing an amount twice. The provisions of section 2(24)(iv), 17(2)(iv) and 28(iv) of the Act are not applicable as the company already disallowed the said expenditure in its hand and the same has not been allowed as an expenditure in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Shamsuddin in ITA No.242/Mds/2014 (order dated 05.12.2004) which followed the order of the Mumbai ITAT, in the case of Bakhtwar B. Dubash and Suda D. Dubash in ITA No.4031 and 4032/Mum/2003 (order dated 29.01.2009). 11. In the case of Ali Asgar Shamsuddin, the Chennai Bench of ITAT (supra) dealt with an identical issue where personal educational expenses incurred by a company for its director were disallowed and taxed in the company's hands. The assessing officer disallowed the personal expenditure in the hands of the company, M/s. Poly hose India Private Limited, and company had paid its tax liability arising thereon and made addition in the hands of the director also. The Tribunal held that the same amount could not be taxed again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer himself has observed that during post search proceedings, the assessee suo motto submitted before the DDIT [Investigation] and disclosed the details of official expenditure and personal expenses of Directors related to the payment of credit card bills in the hands of the company. Since the company did not claim the personal expenditure while computing the business income, the assessee did not receive any additional benefit from the company. The assessing officer is therefore totally unjustified in making the addition in the hands of the assessee being the personal expenditure of the director paid by the company which was disallowed in the hands of the company and the company paid taxes there on since it amounts to double ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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