Nareshkumar R. Sahu, Rajkot V. Income Tax Officer, Ward-1(1)(3), Rajkot

ITA 100/RJT/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5488 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 15-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M N MANVAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , !'#,!$! %& BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER 1&2. ./ I.T.A. NOS.99 & 100/RJT/2018 ( / ASSESSMENT YEAR : 2013-14) NARESHKUMAR RAMESHKUMAR SAHU C/O.M.N.MANVAR & CO. CHARTERED ACCOUNTANTS 504-STAR PLAZA PHULCHHAB CHOWK, RAJKOT / VS. THE ITO WARD-1(1)(3) RAJKOT )!$ ./ ./ PAN/GIR NO. CHZPS 3315 J ( )+ / APPELLANT ) .. ( ,)+ / RESPONDENT ) )+-! / APPELLANT BY : SHRI M.N. MANVAR, AR ,)+.-! / RESPONDENT BY : SHRI PRAVEEN VERMA, SR.DR /0.1$ / DATE OF HEARING 10/05/2019 23 .1$ / DATE OF PRONOUNCEMENT 27/05/2019 !/ O R D E R PER PRADIP KUMAR KEDIA - AM : THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISS IONER OF INCOME TAX(APPEALS)-1, RAJKOT [CIT(A) IN SHORT] DATED 01 /02/2018 IN THE ITA NOS.99 & 100/RJT/201 8 NARESHKUMAR R. SAHU VS. ITO ASST.YEAR 2013-14 - 2 - MATTER OF ASSESSMENT ORDER UNDER S.143(3) OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 11/01 /2016 RELEVANT TO ASSESSMENT YEAR (AY) 2013-14. 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.99/RJT/2018 FOR AY 2013-14, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED: THE LD. CIT(A)-I, RAJKOT HAS ERRED IN LAW AND ON FA CTS FOR DISMISSING THE APPEAL FOR LD. ASSESSING OFFICER WRONGLY DISALL OWED INTEREST EXPENDITURE RS.77,907/- TO FOLLOWING RELATIVES ON T HE ALLEGED GROUND OF ESTIMATINFG REASONABLE RATE OF INTEREST @ 12% IN CO NTRAST TO ACTUAL RATE OF INTEREST PAID @ 15% WITHOUT FINDING THE REASONS FOR UNREASONABLENESS OF THE INTEREST RATE AT PREVAILING MARKET RATE AND THEREBY, WRONGLY DISALLOWED 3% HIGHER INTEREST PAYM ENT. (I) SMT. KAUSHALYADEVI R. SAHU MOTHER OF THE APPELLANT - RS.68,921 (II) SMT.KOMAL NARESH SAHU - WIFE OF THE APPELLANT - RS. 8,986 ------------ RS.77,907 ----------- 3. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSE E AND LD.DR FOR THE REVENUE, WE FIND THAT THE ASSESSING OFFICER HAS DISALLOWED INTEREST EXPENDITURE OF RS.77,907/- IN AGGREGATE PAID ON LOA NS RECEIVED FROM RELATIVES. IT IS FOUND THAT THE ASSESSEE HAS TAKEN LOAN FROM THE RELATIVES @15%, WHEREAS SIMILAR MONEY HAS BEEN SIMULTANEOUSL Y STOOD INVESTED BY WAY OF LOANS AND ADVANCES ON WHICH INTEREST @ 12 % P.A. HAS BEEN ITA NOS.99 & 100/RJT/201 8 NARESHKUMAR R. SAHU VS. ITO ASST.YEAR 2013-14 - 3 - CHARGED. WE NOTICE FROM THE CONCURRENT ORDERS OF T HE ASSESSING OFFICER AND CIT(A) THAT NO PROPER JUSTIFICATION HAS BEEN GI VEN BY THE ASSESSEE FOR BORROWALS AT A HIGHER RATE AND CORRESPONDING LENDIN G AT A LOWER RATE. CLEARLY THE EXCESS INTEREST PAID TO THE RELATIVES Q UA THE LOANS AND ADVANCES DO NOT APPEAR TO CARRY ATTRIBUTES OF COMME RCIAL EXPEDIENCY. THEREFORE, THE REVENUE AUTHORITIES WERE JUSTIFIED I N MAKING DISALLOWANCE OF EXCESS INTEREST EXPENDITURE. WE THUS FIND NO IN FIRMITY IN THE ORDER OF THE CIT(A) AND HENCE, DECLINE TO INTERFERE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 99/RJT/2018 FOR AY 2013-14 IS DISMISSED. ASSESSEES APPEAL IN ITA NO.100/RJT/2018 FOR AY 201 3-14 5. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUND OF APPEAL: THE CIT(A)-1, RAJKOT, HAS ERRED IN LAW AND ON FACT S FOR DISMISSING THE APPEAL FILED AGAINST THE ORDER OF LD .ADDL.CIT, RANGE-1(1) & 1(2), RAJKOT IN IMPOSING PENALTY U/S.2 71D OF THE ACT FOR CONTRAVENTION OF PROVISIONS OF SECTION 269S S OF THE ACT, IN THE MATTER OF ACCEPTING UNSECURED DEPOSIT RS.500 00 IN CASH FROM, SMT.KOMAL N. SAHU, WIFE OF THE APPELLANT. ITA NOS.99 & 100/RJT/201 8 NARESHKUMAR R. SAHU VS. ITO ASST.YEAR 2013-14 - 4 - 6. WITH THE ASSISTANCE OF LD.AR FOR THE ASSESSEE AN D LD.DR FOR THE REVENUE, WE NOTE THAT THE ASSESSEE, AN INDIVIDUAL, WAS IMPOSED PENALTY UNDER S.271D OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT FOR CASH DEPOSIT OF RS.50,000/- RECEIVED ON 30/04/2012 FROM HIS WIFE SMT.KOMAL N.SAHU. 7. FROM A BARE READING OF THE ORDER OF THE CIT(A ), WE FIND THAT ASSESSEE HAS SUPPORTED THE RECEIPT OF CASH FROM WIFE BY WAY OF DOCUMENTARY EVIDENCES AND BONAFIDES OF ACTION. THE TRANSACTION HAS BEEN DONE WITH SPOUSE AND CLAIMED THAT THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT TRANSACTION WITH INTIMATE PERSON COULD NOT ATTRACT MISCHIEF OF PROVISIONS OF ACTION UNDER S.269SS OF THE ACT. THE AFORESAID CONTENTION OF THE ASSESSEE PLEADING BONAFIDE CANNOT BE BRUSHED ASIDE SUMMARILY HAVING REGARD TO CONVENTIONAL CONSTRUCTS AND POSTULATIONS WHICH DEFINE INDIAN SOCIO-ECO STRUCTURE. THUS, IN THE ABSENCE OF ANY DO UBT CAST TOWARDS BONAFIDES OF SUCH SMALL AMOUNT OF LOAN, MERE BREA CH OF SECTION 269SS IS TO BE REGARDED AS TECHNICAL OR VENIAL IN NATURE IN THE GIVEN CIRCUMSTANCES. WE THEREFORE FIND ADEQUATE JUSTIFI CATION IN THE PLEA OF THE ASSESSEE FOR SETTING ASIDE THE IMPOSITION OF PE NALTY UNDER S.279D OF THE ACT IN THIS REGARD. THE ASSESSING OFFICER IS L IKELY DIRECTED TO DELETE THE PENALTY ON THIS SCORE. 8. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.100/ RJT/2018 FOR AY 2013-14 IS ALLOWED. ITA NOS.99 & 100/RJT/201 8 NARESHKUMAR R. SAHU VS. ITO ASST.YEAR 2013-14 - 5 - 9. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 27/05/2019 AT AHMEDABAD. SD/- SD/- () ( !'#) !$ (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD ; DATED 27/05/2019 ../,./../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,)+ / THE RESPONDENT. 3. 7 1 81 / CONCERNED CIT 4. 81 ( ) / THE CIT(A)-1, RAJKOT 5. :;<1/ , , /DR,ITAT,RAJKOT 6. <#G0 / GUARD FILE. / BY ORDER, ,:11 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION ..10.5.2019 (DICTATION-PAD 9- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 16.5.2019 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 27.5.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.5.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER