DCIT, Central Circle - 6, Hyderabad V. Smt. G. Venkata Lakshmi, Hyderabad

CO 129/HYD/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7999 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J J VARUN
• Assessee Lawyers: AMISHA S GUPT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1135/HYD/2012 : ASSESSM ENT YEAR 2005-06 DY. COMMISS IONER OF INCOME - TAX CENTRAL CIRCLE 6, HYDERABAD V/S. SMT. G.VENKAT LAKSHMI, HYDERABAD. ( PAN - ADBPG 1396 H) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.129/HYD/2012 (IN ITA NO.1135/HYD/2012) : ASSESSMEN T YEAR 2005-06 SMT. G.VENKAT LAKSHMI, HYDERABAD. ( PAN - ADBPG 1396 H) V/S. DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 6, HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : S MT. AMISHA S.GUPT D R DEPARTMENT BY : SHRI J.J.VARUN DATE OF HEARIN G 5 . 11 .2012 DATE OF PRONOUNCEMENT 9.11.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) I, HYDERABAD DATE 25.5.2012 FOR THE ASSESSMENT YEAR 20 05-06. SINCE A ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 2 COMMON ISSUE IS INVOLVED, THESE APPEALS ARE BEING D ISPOSED OFF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE INVOLVED IN THE APPEAL OF THE RE VENUE RELATES TO THE ACTION OF THE CIT(A) IN CANCELLING THE PENALTY OF RS.24,01,500 LEVIED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2005- 06 UNDER S.271D OF THE ACT. BY THE CROSS-OBJECTION, THE ASSESSEE MERELY S UPPORTS THE ACTION OF THE CIT(A) IN CANCELLING THE PENALTY. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT DUR ING THE RELEVANT FINANCIAL YEAR, THE ASSESSEE HAS PURCHASED A LAND, AND FOR PU RCHASING THE LAND, THE ASSESSEE HAS RECEIVED CASH LOAN OF RS.24,01,500 FRO M M/S. LAHARI GREEN PARK, WHICH HAPPENS TO BE THE PROPRIETARY CONCERN O F THE ASSESSEES HUSBAND, SHRI G.HARI BABU. THE ASSESSING OFFICER MADE ADDI TION OF THE AFORESAID AMOUNT UNDER S.68 OF THE ACT, WHILE COMPLETING THE ASSESSMENT. THE ASSESSEE CHALLENGED THE ADDITION MADE BEFORE THE CI T(A). THE CIT(A) DELETED THE ADDITION MADE UNDER S.68 OF THE ACT, BY OBSERVI NG THAT THE CASH LOAN TAKEN BY THE ASSESSEE FROM M/S. LAHARI GREEN PARK H AS BEEN SHOWN IN THE RECEIPTS AND PAYMENTS ACCOUNT, AND THEREFORE, NO AD DITION CAN BE MADE UNDER S.68 OF THE ACT. THE ASSESSING OFFICER NOTIN G THAT THE CIT(A) WHILE DELETING THE ADDITION MADE UNDER S.68 OF THE ACT, H AD OBSERVED THAT THE ASSESSEE HAD TAKEN CASH LOAN, WAS OF THE VIEW THAT THERE IS CONTRAVENTION OF THE PROVISIONS OF S.269SS OF THE INCOME-TAX ACT6, A S CASH LOAN WAS ACCEPTED BY THE ASSESSEE. THE ASSESSING OFFICER THEREFORE, INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY UNDER S.271D OF THE ACT. THE ASSESSEE, IN HER EXPLANATION, SUBMITTED BEFORE THE ASSESSING OFFICER THAT SINCE THE CIT(A) HAS OBSERVED THAT THERE IS NO CASH CREDIT UNDER S.68 OF THE ACT, THERE CANNOT BE ANY VIOLATION OF THE PROVISIONS OF S.269SS OF THE A CT. IT WAS FURTHER ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 3 SUBMITTED BY THE ASSESSEE THAT THOUGH LAND WAS PURC HASED IN THE NAME OF THE ASSESSEE, THE PAYMENT WAS MADE BY M/S. LAHARI G REEN PARK. AT THE END OF THE YEAR, WHEN THE LAND WAS REGISTERED, THE LAN D ACCOUNT WAS DEBITED IN THE BOOKS OF M/S. LAHARI GREEN PARK AND THE PARTY I N WHOSE NAME, THE LAND WAS PURCHASED, I.E. THE ASSESSEE, WAS CREDITED IN THE BOOKS OF M/S. LAHARI GREEN PARK., THUS, IN EFFECT, THERE WAS NO CASH LOA N RECEIVED BY THE ASSESSEE AND AS SUCH THERE WAS NO CONTRAVENTION OF THE PROVI SIONS OF S.269SS OF THE ACT. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEP T THE EXPLANATION OF THE ASSESSEE, BY HOLDING THAT THE CHARACTER OF THE TRAN SACTION BETWEEN M/S. LAHARI GREEN PARK AND THE ASSESSEE, IS A LOAN WHICH HAS BEEN TAKEN BY THE ASSESSEE IN CASH, AND THEREFORE, THE PENAL PROVISIO NS OF S.271D ARE ATTRACTED. WITH THE AFORESAID CONCLUSION, THE ASSESSING OFFICE R IMPOSED PENALTY OF RS.24,01,500 UNDER S.271D OF THE ACT, VIDE ORDER OF PENALTY DATED 25.5.2012. 4. THE ASSESSEE CHALLENGED THE IMPOSITION OF PENAL TY, BY FILING AN APPEAL BEFORE THE CIT(A). IN THE COURSE OF HEARING BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSESSEE THAT M/S. LAHARI GREEN PA RK HAD PURCHASED THE LAND IN QUESTION IN THE NAME OF THE ASSESSEE BY PA SSING JOURNAL ENTRY IN THE BOOKS. SUBSEQUENTLY, THE LAND WAS TRANSFERRED TO M /S. LAHARI GREEN PARK AT THE SAME VALUE, AND THE ASSESSEE HAS NOT DERIVED AN Y BENEFIT OUT OF THIS TRANSACTION. IT WAS CONTENDED THAT IN REALITY, THE RE WAS NO CASH TRANSFER BY M/S. LAHARI GREEN PARK TO THE ASSESSEE, BUT ONLY BO OK ENTRIES WERE MADE AT THE TIME OF PURCHASE AND AT THE TIME OF SALE. THE SALE CONSIDERATION WAS PAID DIRECTLY BY M/S. LAHARI GREEN PARK TO THE VENDOR. I T WAS CONTENDED BY THE ASSESSEE THAT SHE NEITHER RECEIVED THE MONEY NOR MA DE ANY PAYMENT TO M/S. LAHARI GREEN PARK AND HENCE NO PENALTY UNDER S.271D CAN BE IMPOSED. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THE CASH PAYMENT BY M/S. LAHARI ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 4 GREEN PARK HAS BEEN CONSIDERED IN THE ASSESSMENT O F THE PROPRIETOR, SHRI G.HARI BABU, AND DISALLOWANCE HAS BEEN MADE UNDER S .40A(3). 5. THE CIT(A) AFTER CONSIDERING THE CONTENTIONS R AISED BY THE ASSESSEE CAME TO A CONCLUSION THAT THOUGH THERE IS NO DISPUTE TO THE FACT THAT THE CONSIDERATION FOR PURCHASE OF LAND WAS PAID IN CASH, HOWEVER, THE ASSESSEE WAS NEVER IN RECEIPT OF THE CASH. THE TR ANSACTION WAS ENTERED IN THE BOOKS OF M/S. LAHARI GREEN PARK, BY PASSING JOU RNAL ENTRIES IN THE NAME OF THE ASSESSEE AND THE CASH WAS PAID BY THE CREDIT OR, DIRECTLY TO THE VENDOR TOWARDS SALE CONSIDERATION OF THE LAND. IT WAS FURT HER OBSERVED BY THE CIT(A) THAT M/S. LAHARI GREEN PARK HAS MADE THE PAYMENT IN CASH TO THE SELLER OF THE PROPERTY DIRECTLY, WITHOUT INVOLVING THE ASSESS EE. THE CIT(A) OBSERVED THAT PROVISIONS OF S.269SS COME INTO PLAY, ONLY WHE N THE ASSESSEE ACCEPTS CASH LOANS. SINCE IN THE PRESENT CASE, NO CASH LOA N WAS ACCEPTED BY THE ASSESSEE AND SINCE IT ONLY REPRESENTS A JOURNAL ENT RY, NO PENALTY CAN BE IMPOSED UNDER S.271D OF THE ACT. 6. BEING AGGRIEVED BY THE RELIEF GRANTED BY THE CI T(A), REVENUE IS IN APPEAL BEFORE US. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE CIT(A) WAS NOT CORRECT IN HOLDING THAT THE ASSESSEE HAS NOT RECEIVED THE LOAN IN CASH, WHEN THE CIT(A) WHILE DECIDING THE QUANTUM APPEAL FO THE ASSESSEE, HAS OBSERVED THAT THE ASSESSEE HAS RECEIVED CASH LO ANS FROM M/S. LAHARI GREEN PARK. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE IS CLEAR VIOLATION OF THE PROVISIONS OF S.269SS, AND T HEREFORE, IMPOSITION OF PENALTY UNDER S.271D SHOULD BE SUSTAINED. ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 5 8. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, REFUTING THE ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT THE ASSESSEE HAS NEVER ACCEPTED ANY CASH LOAN IN CO NTRAVENTION OF THE PROVISIONS OF S.269SS OF THE ACT. THERE WERE ONLY JOURNAL ENTRIES MADE AT THE TIME OF PURCHASE AND AT THE TIME OF SALE IN THE BOOKS OF M/S. LAHARI GREEN PARK. THE LEARNED AUTHORISED REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE CIT(A) BEING CONVINCED WITH THE FACT THAT THE A SSESSEE HAS NOT ACCEPTED ANY CASH LOAN HAS CORRECTLY DELETED THE PENALTY IMP OSED BY THE ASSESSING OFFICER UNDER S.271D OF THE ACT. HE ALSO RELIED UP ON VARIOUS DECISIONS AGAINST THE IMPOSITION OF PENALTY, DULY FURNISHING COPIES THEREOF IN THE PAPER- BOOK. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. WE HAVE ALSO EXAMINED THE DECISIONS RELIE D UPON BY THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE. THE ON LY ISSUE TO BE DECIDED IN THE PRESENT APPEAL IS AS TO WHETHER THE ASSESSEE HA S ACCEPTED CASH LOAN FROM M/S. LAHARI GREEN PARK, IN CONTRAVENTION OF S.269SS OF THE ACT, SO AS TO INVITE THE RIGOUR OF THE PENAL PROVISION OF S.271D OF THE ACT. IT IS THE CASE OF THE DEPARTMENT THAT THE ASSESSEE HAS ACCEPTED CASH LOAN IN CONTRAVENTION OF THE PROVISIONS UNDER S.269SS, WHEREAS THE ASSESSEE S CONSISTENT STAND HAS BEEN THAT THERE WAS NO CASH LOAN, AND WHATEVER HAS HAPPENED WAS ONLY BY WAY OF JOURNAL ENTRIES IN THE BOOKS OF THE FIRM IN RESPECT OF THE TRANSACTIONS BETWEEN THE PROPRIETARY CONCERN, M/S. LAHARI GREEN PARK AND THE VENDOR, WITHOUT HER KNOWLEDGE OR INVOLVEMENT. THIS CLAIM O F THE ASSESSEE THAT THERE WAS NO CASH FLOW BETWEEN THE PROPRIETARY FIRM AND T HE ASSESSEE, AND WHATEVER HAPPENED WAS ONLY BY WAY OF PASSING OF JOU RNAL ENTRIES IN THE BOOKS OF THE PROPRIETARY CONCERN NEEDS TO BE VERIFI ED FROM THE RECORDS OF THE FIRM. HOWEVER, FROM THE RECORDS AVAILABLE BEFORE U S, WE ARE NOT ABLE TO DECIDE THE ISSUE AS TO WHETHER THE ASSESSEE HAS TAK EN CASH LOAN AS STATED BY ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 6 THE DEPARTMENT, OR THERE ARE ONLY JOURNAL ENTRIES A S CLAIMED BY THE ASSESSEE, SINCE MATERIAL TO THAT EFFECT HAVE NOT BEEN FURNISH ED BEFORE US. WE THEREFORE, DEEM IT JUST AND PROPER TO REMIT THE MAT TER TO THE FILE OF THE ASSESSING OFFICER, TO VERIFY THE FACT AS TO WHETHER THE ASSESSEE HAS ACTUALLY RECEIVED CASH LOAN FROM M/S. LAHARI GREEN PARK OR T HERE WERE MERE JOURNAL ENTRIES TO THAT EFFECT. IF ULTIMATELY, IT IS FOUND THAT NO CASH LOAN WAS ACTUALLY RECEIVED BY THE ASSESSEE IN THE COURSE OF THE TRANS ACTION AND THERE WERE ONLY JOURNAL ENTRIES TO THAT EFFECT. THEN NO PENALTY CAN BE LEVIED UNDER S.271D OF THE ACT. THE ASSESSING OFFICER SHALL ACCORDINGLY RE DECIDE THE ISSUE OF APPLICABILITY OF THE PENAL PROVISIONS OF S.271D OF THE ACT TO THE FACTS OF THE PRESENT CASE, IN ACCORDANCE WITH LAW, KEEPING IN VI EW OUR AFORESAID DIRECTION, AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10. SINCE THE CROSS-OBJECTION OF THE ASSESSEE MERE LY SUPPORT THE ORDER OF THE CIT(A), THE SAME DOES NOT CALL FOR ANY INDEPENDENT ADJUDICATION. THE SAME IS THUS RENDERED REDUNDANT, AND IT IS ACCO RDINGLY DISMISSED AS SUCH. 11. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES, AND THE ASSESSEES CROSS OBJECTION IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9.11.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- NOVEMBER, 2012 ITA NO.1135/HYD/2012 & CO NO.129/HYD/2012 SMT. G.VENKAT LAKSHMI, HYDERABAD. 7 COPY FORWARDED TO: 1. SMT. G.VENKAT LAKSHMI, PLOT NO.723A,RAOD NO.26, JUB ILEE HILLS, HYDERABAD. 2. 3. 4. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 6 , HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS)-I, HYDERABAD COMMISSIONER OF INCOME-TAX CENTRAL HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.