Shri Anshul Sadani, Harda V. THE ITO -2, Itarsi

ITA 1006/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2355 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Initiation of penalty proceedings; Competent authority; Time period of passing order
• Section: 143(3); 27

Judgement Text

ANSHUL SODANI 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1006/IND/2016 ASSESSMENT YEAR: 2008-09 ORDER PER MANISH BORAD, AM. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, BHOPAL [IN SHORT REFERRED TO AS THE CIT (A)] DATED 28.06.2016 ARISING OUT OF THE ORDER U/S 250/143(3) OF THE INCOME TAX ACT DATED 22.11.2010 F RAMED BY THE INCOME TAX OFFICER-2, ITARSI PERTAINING TO ASSESSME NT YEAR 2008-09. SHRI ANSHUL SODANI, PROP. OF M/S. VENKATESH CANVASSERS, RAJMA CHOWK, HARDA (M.P) VS. INCOME TAX OFFICER - 2 , ITARSI (APPELLANT) (RE SPONDENT ) PAN NO.ATFPS3843R RESPONDENT BY SHRI K.G. GOYAL , SR. DR APPELLANT BY SHRI S.N. AGRAWAL,CA (AR) DATE OF HEARING: 08.01.2018 DATE OF PRONOUNCEMENT: 12.01.2018 ANSHUL SODANI 2 2 . BRIEFLY STATED OF CASE AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BROKER OF SH ARES AND COMMODITIES UNDER THE SOLE PROPRIETARY CONCERN M/S. VENKATESH CANVASSERS. HE WAS WORKING AS SUB BROKER OF M/S. EX CLUSIVE BROKING HOUSE LTD, M/S. EXCLUSIVE SECURITIES LTD AN D M/S EXCLUSIVE COMMODITIES LTD. RETURN OF INCOME FOR TH E ASSESSMENT YEAR 2008-09 WAS FILED ON 31.3.2009 DECLARING TOTAL INCOME OF RS.4,31,720/-. THE CASE WAS SELECTED FOR SCRUTINY A ND ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 196 1 ON 22.11.2010 DETERMINING TOTAL INCOME OF RS.5,39,320/ -. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD.A.O OBSERVE D THAT DURING THE YEAR THE ASSESSEE HAD MADE REPAYMENT OF LOAN OF RS.2,50,000/- TO SHRI JAMNA PRASAD DUGYA AND RS.50,000/- TO SHRI RAJESH TAPADIA OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE O R ACCOUNT PAYEE BANK DRAFT. HE ACCORDINGLY INITIATED PENALTY PROCEEDINGS U/S 271E OF THE ACT AND IMPOSED PENALTY OF RS.3,00,000 /- BEING 100% OF THE ALLEGED PAYMENT AS PENALTY. 3. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE THE LD.CIT(A) CHALLENGING THE VALIDITY OF PENALTY ORDER PASSED U/S 271E BEING BARRED BY LIMITATION OF TIME AS WELL AS ALSO CHALLENGED THE PENALTY IMPOSED U/S 271E BUT FAILED TO SUCCEED IN B OTH THE GROUNDS. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L PRESSING FOLLOWING GROUNDS OF APPEAL. ANSHUL SODANI 3 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) ERRED IN APPROVED THE PENALTY ORDER AS PASSED U/S 2 71E OF THE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUB MISSION MADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) ERRED IN MAINTAINING THE PENALTY ORDER AS PASSED U/ S 271E OF THE ACT EVEN WHEN THE SAID ORDER WAS BARRED BY LIMITATION OF TIM E IN VIEW OF SPECIFIC PROVISION OF SECTION 275(1)(C) OF THE ACT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A)ERRED IN APPROVING THE PENALTY ORDER AS PASSE D U/S 271E OF THE ACT EVEN WHEN THERE WAS NO SPECIFIC SATISFACTION WAS RE CORDED IN RESPECT OF DEFAULT AS COMMITTED BY THE ASSESSEE U/S 269T OF TH E ACT AS TO ATTRACT THE PENALTY U/S 271E OF THE ACT. 5. THE LD. COUNSEL REFERRED TO THE WRITTEN SUBMISSI ONS MADE BEFORE THE CIT(A) AS WELL AS THE TRIBUNAL AND THE P APER BOOKS PLACED ON RECORD. THE DEPARTMENTAL COUNSEL SUPPORTE D THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFU LLY PERUSED THE RECORDS PLACED BEFORE US. GROUND NO.1 & 2 RELATES TO THE LEGALITY OF PENALTY ORDER IN VIEW OF THE PROVISIONS OF SECTION 271E OF THE ACT. IT WAS CONTENDED THAT THE PENALTY ORDER WAS BARRED BY LIMITATION OF TIME AND ALSO THERE WAS NO SATISFACTION BY THE ASSESSING OFFICER IN THE BOD Y OF ORDER U/S 143(3) OF THE ACT WITH REGARD TO INITIATION OF PENA LTY PROCEEDINGS U/S 271E OF THE ACT. WE HAVE GONE THROUGH THE FINDINGS OF THE LD. CIT(A) AND FIND NO REASON TO INTERFERE IN HIS FINDI NGS DISMISSING THESE TWO LEGAL GROUNDS OF ASSESSEE OBSERVING AS FO LLOWS; 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E, ASSESSMENT ORDER AND THE SUBMISSIONS FILED BY THE APPELLANT. ALL THE GRO UNDS OF APPEAL ARE TAKEN UP TOGETHER. THE APPELLANT HAS TAKEN TWO TECHNICAL GROUNDS IN HIS SUBMISSION WHICH ARE THAT THE LEVY OF PENALTY ORDER U/S 271E IS BARRED BY ANSHUL SODANI 4 LIMITATION OF TIME AND THAT THE LEVY OF PENALTY IS WITHOUT THE SATISFACTION OF THE ASSESSING OFFICER. REGARDING THE FIRST TECHNIC AL GROUND OF TIME LIMITATION, IT IS SEEN THAT THE SAME IS DEALT WITH AS PER SECTION 275(1)(C) OF THE ACT WHICH READS AS UNDER: (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FIN ANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED ARE COMPLETED, OR SIX MONTHS FROM TH E END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED , WHICHEVER PERIOD EXPIRES LATER. 6. THERE ARE SEVERAL DECISIONS IN FAVOUR OF THE DE PARTMENT WHICH HAVE HELD THAT IN CASE OF PENALTY LEVIED UNDER SECTION 271E O F THE ACT, THE LIMITATION PERIOD STARTS FROM THE DATE OF ISSUE OF NOTICE BY T HE ADDL. COMMISSIONER/ JOINT COMMISSIONER OF INCOME TAX WHO ULTIMATELY LEV IES THE PENALTY. SOME OF THE CASE LAWS ARE AS UNDER: [2015] 63 TAXMANN.COM 196 (KERALA), HIGH COURT OF KERALA, GRIHALAKSHMI VISION V. ADDITIONAL COMMISSIO NER OF INCOME-TAX, RANGE I, KOZHIKODE, ANTONY DOMINIC AND SHAJI P. CHALY, JJ., IT APPEAL NOS. 83 & 86 OF 2014 , AUGUST 7, 2015 WHEREIN IT HAS BEEN HELD THAT: SECTION 271D, READ WITH SECTIONS 271E AND 275, OF THE INCOME-TAX ACT, 1961 PENALTY FOR FAILURE TO COMPLY WITH SECTION 269SS (INITIATION OF PENALTY PROCEEDINGS) ASSESSMENT YEAR 2005-06 DU RING ASSESSMENT PROCEEDINGS, ASSESSING OFFICER FOUND THAT ASSESSEE HAD ACCEPTED DEPOSITS AND MADE REPAYMENTS IN CASH IN VOIOLATION OF PROVIS IONS CONTAINED IN SECTIONS 269SS AND 269T HE THEREFORE REFERRED MAT TER TO JOINT COMMISSIONER WHO PASSED ORDER UNDER SECTION 271D LE VYING PENALTY- ASSESSEE CHALLENGED PENALTY ORDER CONTENDING THAT I F PERIOD OF LIMITATION PRESCRIBED IN SECTION 275(1)(C) WAS RECKONED FROM D ATE OF ASSESSMENT ORDER DATED 6.11.2007, PENALTY ORDER PASSED BY JOIN T COMMISSIONER ON 29.7.2008 WAS BEYOND TIME PERMITTED- WHETHER PENALT Y PROCEEDINGS UNDER PROVISIONS OF SECTIONS 271 D AND 271 E ARE IN ITIATED NOT BY ASSESSING OFFICER BUT ONLY WITH ISSUANCE OF NOTICE BY JOINT COMMISSIONER HELD, YES WHETHER,THEREFORE, PLEA RAISED BY ASS ESSEE DESERVED TO BE REJECTED HELD, YES (PARA 11) [ IN FAVOUR OF REVEN UE]. (2006) 287 ITR 72 (KAR.) HIGH COURT OF KARNATAKA COMMISSIONER OF INCOME-TAX V. TAM TAM PEDDAGURUVA R EDDY, R. GURURAJAN AND JAWAD REHIM, JJ., IT APPEAL NO.60 OF 1999, JULY 18, 2006. 7. NOW THE CBDT HAS ISSUED CIRCULAR NO.09/DV/2016 D ATED 26 APRIL, 2016 WHICH HAS CLARIFIED THE DEPARTMENTAL VIEW ABOU T THE CONFLICTING ANSHUL SODANI 5 INTERPRETATIONS REGARDING THE DATE OF COMMENCEMENT OF LIMITATION FOR IMPOSITION OF PENALTY U/S 271D & 271E, AS UNDER:- 1. IT HAS BEEN BROUGHT TO THE NOTICE OF THE CENTRA L BOARD OF DIRECT TAXES (HEREINAFTER REFERRED TO AS THE BOARD) THAT THERE A RE CONFLICTING INTERPRETATIONS OF VARIOUS HIGH COURTS ON THE ISSUE WHETHER THE LIMITATION FOR IMPOSITION OF PENALTY UNDER SECTIONS 271D AND 2 71E OF THE INCOME TAX ACT, 1961 (HEREAFTER REFERRED TO AS THE ACT) COMMEN CES AT THE LEVEL OF THE ASSESSING OFFICER (BELOW THE RANK OF JOINT COMMISSI ONER OF INCOME TAX.) OR AT LEVEL OF THE RANGE AUTHORITY I.E. THE SJOINT COM MISSIONER OF INCOME TAX/ADDL. COMMISSIONER OF INCOME TAX. HIGH COURTS HAVE HELD THAT THE LIMITATION COMMENCES AT THE LEVEL OF THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY I.E. RANGE HEAD WHILE OTHERS HAVE HELD THAT EVEN THOUGH THE ASSESSING OFFICER IS NOT COMPETENT TO IMPOSE THE PE NALTY, THE LIMITATION COMMENCES AT THE LEVEL OF THE ASSESSING OFFICER WHE RE THE ASSESSING OFFICER HAS ISSUED SHOW CAUSE NOTICE OR REFERRED TO THE INITIATION OF PROCEEDINGS IN ASSESSMENT ORDER. 2. ON CAREFULLY EXAMINATION OF THE MATTER, THE BOAR D IS OF THE VIEW THAT FOR THE SAKE OF CLARITY AND UNIFORMITY, THE CONFLICT NE EDS TO BE RESOLVED BY WAY OF A DEPARTMENTAL VIEW. 3. THE HONBLE KERALA HIGH COURT IN THE CASE OF GRI HALAXMI VISIION V. ADDL. COMMISSIONER OF INCOME TAX, RANGE I, KOZHIKODE (AVA ILABLE IN NJRS 2015- LL-0807-4), VIDE ITS ORDER DATED 8.7.15 IN ITA NOS. 83 & 86 OF 2014, OBSERVED THAT, QUESTION TO BE CONSIDERED IS WHETHE R PROCEEDINGS FOR LEVY OF PENALTY, ARE INITIATED, WITH THE PASSING OF THE ORDER OF ASSESSMENT BY THE ASSESSING OFFICER OR WHETHER SUCH PROCEEDINGS H AVE COMMENCED WITH THE ISSUANCE OF THE NOTICE ISSUED BY THE JOINT COMM ISSIONER. FROM STATUTORY PROVISION, IT IS CLEAR THAT THE COMPETENT AUTHORITY TO LEVY PENALTY BEING THE JOINT COMMISSIONER. THEREFORE, ONLY THE JOINT COMMISSIONER CAN INITIATE PROCEEDINGS FOR LEVY OF PENALTY. SUCH INI TIATION OF PROCEEDINGS COULD NOT HAVE BEEN DONE BY THE ASSESSING OFFICER. THE STATEMENT IN THE ASSESSMENT ORDER THAT THE PROCEEDINGS UNDER SECTION 271D AND E ARE INITIATED IS INCONSEQUENTIAL. ON THE OTHER HAND, I F THE ASSESSMENT ORDER IS TAKEN AS THE INITIATION OF PENALTY PROCEEDINGS, SUC H INITIATION IS BY AN AUTHORITY WHO IS INCOMPETENT AND THE PROCEEDINGS TH EREAFTER WOULD BE PROCEEDINGS WITHOUT JURISDICTION. IF THAT BE SO, T HE INITIATION OF THE PENALTY PROCEEDINGS IS ONLY WITH THE ISSUANCE OF THE NOTICE ISSUED BY THE JOINT COMMISSIONER TO THE ASSESSEE TO WHICH HE HAS FILED HIS REPLY 4. THE ABOVE JUDGMENT REFLECTS THE DEPARTMENTAL VI EW. ACCORDINGLY, THE ASSESSING OFFICERS (BELOW THE RANK OF JOINT COMMISS IONER OF INCOME TAX) MAY BE ADVISED TO MAKE A REFERENCE TO THE RANGE HEA D, REGARDING ANY VIOLATION OF THE PROVISIONS OF SECTION 269SS AND SE CTION 269T OF THE ACT, AS THE CASE MAY BE, IN THE COURSE OF THE ASSESSMENT PR OCEEDINGS (OR ANY OTHER PROCEEDINGS UNDER THE ACT). THE ASSESSING OFFICER (BELOW THE RANK OF JOINT COMMISSIONER OF INCOME TAX) SHALL NOT ISSUE THE NOT ICE IN THIS REGARD. THE RANGE HEAD WILL ISSUE THE PENALTY NOTICE AND SHALL DISPOSE/COMPLETE THE PROCEEDINGS WITHIN THE LIMITATION PRESCRIBED U/S 27 5(1)(C). ANSHUL SODANI 6 5. WHERE ANY HIGH COURT DECIDES THIS ISSUE CONTRARY TO THE DEPARTMENTAL VIEW, THE DEPARTMENTAL VIEW THEREON SHALL NOT BE OPERATIVE IN THE AREA FALLING IN THE JURISDICTION OF THE RELEVANT HIGH CO URT. HOWEVER, THE CCIT CONCERNED SHOULD IMMEDIATELY BRING THE JUDGMENT TO THE NOTICE OF THE CENTRAL TECHNICAL COMMITTEE. THE CTC SHALL EXAMINE THE SAID JUDGMENT ON PRIORITY TO DECIDE AS TO WHETHER FILING OF SLP T O THE SUPREME COURT WILL BE ADEQUATE RESPONSE FOR THE TIME BEING OR SOME LEG ISLATIVE AMENDMENT IS CALLED FOR. 6. THE ABOVE CLARIFICATION MAY BE BROUGHT TO THE NO TICE OF ALL OFFICERS. 7.1 IN VIEW OF THE ABOVE CIRCULAR AND JUDICIAL DECI SIONS, IT IS CLEAR THAT THE RANGE HEAD IS THE COMPETENT AUTHORITY TO ISSUE THE PENALTY NOTICE IN RESPECT OF VIOLATION OF PROVISIONS OF SECTION 269SS AND 269T AND SHALL DISPOSE/COMPLETE THE PROCEEDINGS WITHIN THE LIMITAT ION PRESCRIBED U/S 275(1)(C) OF THE ACT. IN THIS PARTICULAR CASE THE NOTICE WAS ISSUED BY THE RANGE HEAD I.E. THE ADDITIONAL CIT, RANGE I, BHOPAL AND THE PENALTY ORDER WAS PASSED WITHIN THE TIME LIMIT AS PRESCRIBED U/S 275(1)(C) OF THE ACT. HENCE, THE CONTENTION OF THE APPELLANT WITH REGARD TO THE PENALTY ORDER BEING BARRED BY LIMITATION IS NOT ACCEPTED. 8. THE OTHER TECHNICAL GROUND RAISED BY THE APPELLA NT IS THAT THE A.O HAS NOT RECORDED HIS SATISFACTION IN THE ASSESSMENT ORD ER U/S 143(3) PASSED BY HIM DATED 22.11.2010 FOR THE A.Y. 2008-09. THE APPELLANT HAS SUBMITTED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS JAI LAXMI RICE MILLS IN 279 ITR 520 WHEREIN IT HAS BEEN HELD THAT:- 5. AS POINTED OUT ABOVE, IN SO FAR AS, FRESH ASSES SMENT ORDER IS CONCERNED, THERE WAS NO SATISFACTION RECORDED REGAR DING PENALTY PROCEEDING UNDER SECTION 271E OF THE ACT, THOUGH IN THAT ORDER THE ASSESSING OFFICER WANTED PENALTY PROCEEDINGS TO BE INITIATED UNDER SECTION 275(1)(C) OF THE ACT. THUS, IN SO FAR AS PENALTY U NDER SECTION 271E IS CONCERNED, IT WAS WITHOUT ANY SATISFACTION AND, THE REFORE, NO SUCH PENALTY COULD BE LEVIED. THESE APPEALS ARE, ACCORDINGLY, D ISMISSED. 9. HOWEVER, IT IS SEEN THAT THE FACTS OF THIS CASE ARE DIFFERENT FROM THE FACTS IN THE ABOVE DECISION OF THE APEX COURT IN THE CASE OF CIT VS JAI LAXMI RICE MILLS IN 279 ITR 520. THE QUESTION TO BE CONSIDERE D IS WHETHER PROCEEDINGS FOR LEVY OF PENALTY, ARE INITIATED WITH THE PASSING OF THE ORDER OF ASSESSMENT BY THE ASSESSING OFFICER OR WHETHER S UCH PROCEEDINGS HAVE COMMENCED WITH THE ISSUANCE OF THE NOTICE BY THE RA NGE HEAD. FROM STATUTORY PROVISION, IT IS CLEAR THAT THE COMPETENT AUTHORITY TO LEVY PENALTY IS THE RANGE HEAD. THEREFORE, ONLY THE RANGE HEAD CAN INITIATE PROCEEDINGS FOR LEVY OF PENALTY. SUCH INITIATION O F PROCEEDINGS COULD NOT HAVE BEEN DONE BY THE ASSESSING OFFICER. THEREFORE , THE STATEMENT IN THE ASSESSMENT ORDER THAT THE PENALTY PROCEEDINGS UNDER SECTION 271D AND 271E ARE INITIATED IS INCONSEQUENTIAL. THE A.O HAS TO SEPARATELY INTIMATE THE RANGE HEAD WITH REGARD TO THE VIOLATIONS OF THE PROVISIONS U/S 269SS AND 269T OF THE ACT. AS MENTIONED IN THE EARLIER P ARAGRAPHS, AFTER THE A.O INTIMATES THE RANGE HEAD, THE RANGE HEAD WILL ISSUE NOTICE FOR THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271 E. IN THIS PARTICULAR ANSHUL SODANI 7 CASE, THE A.O HAD INTIMATED THE RANGE HEAD ABOUT TH E VIOLATIONS OF THE PROVISIONS AND THE RANGE HEAD HAD THEREAFTER ISSUE THE NOTICE FOR THE PENALTY PROCEEDINGS U/S 271E OF THE INCOME TAX ACT. THEREAFTER, THE PENALTY ORDER U/S 271E OF THE INCOME TAX ACT WAS PA SSED BY THE RANGE HEAD ON 31.3.2014 AS PER THE PROVISIONS OF SECTION 275(1)(C) OF THE ACT. THEREFORE, THIS GROUND OF APPEAL TAKEN BY THE APPEL LANT IS DISMISSED. WE ACCORDINGLY DISMISS GROUND NO. 1 & 2 RAISED BY T HE ASSESSEE. 7. NOW WE TAKE UP GROUND NO.3 RELATING TO MERITS OF THE CASE WHEREIN THE LD. COUNSEL CONTENDED THAT THE LD. A.O ERRED IN LEVYING THIS PENALTY BECAUSE THE ALLEGED TRANSACTIO NS IS NOT IN THE NATURE OF REPAYMENT OF LOAN RATHER IT WAS A REGULAR BUSINESS TRANSACTION CARRIED OUT BY THE ASSESSEE WITH HIS CL IENTS IN THE NORMAL COURSE OF BUSINESS. PROVISIONS OF SECTION 27 1E OF THE ACT CONTEMPLATES LEVYING OF PENALTY FOR FAILURE IN COMP LYING THE PROVISIONS OF 269T OF THE ACT. FOR JUSTIFICATION OF PENALTY IMPOSED U/S 271E, FIRST IT IS TO BE EXAMINED WHETHER THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE IN COMPLYING THE PROVISION S OF SECTION 269T OF THE ACT WHICH RELATES TO REPAYMENT OF LOANS AND DEPOSITS OTHERWISE THEN BY ACCOUNT PAYEE CHEQUE/ACCOUNT PAYE E DRAFT IF THE AMOUNT EXCEEDS RS.20,000/- OR MORE. SO FIRST IT IS TO BE ASCERTAINED WHETHER THE IMPUGNED TRANSACTION WAS IN THE NATURE OF REPAYMENT OF LOAN OR OTHERWISE. 8. THE ALLEGED TRANSACTIONS OF RS.3,00,000/- RELAT ES TO TWO PARTIES NAMELY SHRI JAMUNA PRASAD DUGYA AND SHRI RAJESH TAP ARIA. IT IS NOT DISPUTED THAT BOTH THESE PERSONS ARE HAVING REG ULAR ACCOUNT WITH THE ASSESSEE IN THE CAPACITY OF THE CLIENT. T HE ASSESEE WHO IS ACTING AS A BROKER OF M/S. EXCLUSIVE SECURITIES LIM ITED HAVING ANSHUL SODANI 8 NUMBER OF CLIENTS ON WHOSE BEHALF TRANSACTIONS OF SHARES/COMMODITIES ARE ENTERED AND THE AMOUNT AS RE CEIVED FROM THE CLIENTS ARE KEPT AS MARGIN DEPOSITS AND ALL THE CLIENTS OF THE ASSESSEE ARE ALSO HAVING THEIR TRADING ACCOUNT WITH THE MAIN BROKING FIRM M/S. EXCLUSIVELY SECURITIES LTD. 9. WE FURTHER OBSERVE THAT DURING THE RELEVANT ASS ESSMENT YEAR I.E A.Y. 2008-09 M/S. EXCLUSIVELY SECURITIES LIMITED DE BITED THE ACCOUNT OF THE ASSESSEE WITH THE AMOUNT OF RS.2,50 ,000/- AND RS.50,000/- ON ACCOUNT OF DEBIT IN THE ACCOUNT OF S HRI JAMUNA PRASAD DUGYA AND SHRI RAJESH TAPARIA. FROM PERUSAL OF THE COPY OF THE ACCOUNT PLACED IN THE PAPER BOOK AS ON 1.4.2007 AN AMOUNT OF RS.48,194/- WAS SHOWN AS DEBIT BALANCE AND AMOUNT O F RS.50,000/- WAS DEBITED IN THE ACCOUNT OF ASSESSEE. SIMILARLY IN THE CASE OF SHRI JAMUNA PRASAD DUGYA AN AMOUNT OF RS.2, 56,224/- WAS DEBITED. IN THIS WAY THE DEBIT BALANCES OF BOTH THE ABOVE PARTIES WERE ADJUSTED BY THE MAIN BROKER THROUGH TH E COMMISSION ACCOUNT OF ASSESSEE. THE REASON FOR THIS DEBIT IS O N ACCOUNT OF PURCHASES MADE OR LOSS INCURRED BY THESE TWO PERSON S IN THE SHARES AND SECURITIES. 10. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AND PERUSAL OF NECESSARY EVIDENCES AND DOCUMENTS FI LED IN THE PAPER BOOK ARE OF THE VIEW THAT THE IMPUGNED TRANSA CTIONS OF ALLEGED REPAYMENT OF RS.2,50,000/- AND RS.50,000/- BY JOURNAL ENTRY I.E. OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE/D RAFT AND IS PURELY A REGULAR BUSINESS ACCOUNT WITH HIS CLIENT C ANNOT BE TREATED AS REPAYMENT OF LOAN BY ANY CANNON. THEREFORE, WE ARE OF VIEW THAT ANSHUL SODANI 9 THE ASSESSSEE HAS MADE NO CONTRAVENTION OF PROVISIO NS OF SECTION 269 T OF THE ACT AS THE ALLEGED TRANSACTIONS WERE N OT IN THE NATURE OF REPAYMENT OF LOAN BUT THESE WERE FOR NORMAL BUSI NESS TRANSACTIONS BY CLIENTS CATEGORIZED UNDER THE HEAD SUNDRY DEBTORS/CREDITORS AND THEREFORE NO PENALTY WAS LEVI ABLE U/S 271E OF THE ACT. WE THEREFORE SET ASIDE THE FINDINGS OF LO WER AUTHORITIES AND ALLOW GROUND NO.3 OF THE ASSEESEES APPEAL AND DELE TE THE PENALTY OF RS.3,00,000/- LEVIED U/S 271E . 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.01.201 8. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 12, JANUARY, 2018 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE