Smt. Kavitha Nanjungud Keethi, Bangalore V. CIT, Bangalore

ITA 1043/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7615 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI JT BENGALURU
• Assessee Lawyers: P DINESHA
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.1043/BANG/2016 ASSESSMENT YEAR : 2007-08 SMT. KAVITHA NANJUNGUD KEERTHI, NO.103, YAMUNA BLOCK, NATIONAL GAMES VILLAGE, KORAMANGALA, BANGALORE 560 034. PAN: AHPPK 2134B VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-14, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI P. DINESHA, ADVOCATE RESPONDENT BY : SMT. PADMA MEENAKSHI, JT.CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 21.08.2017 DATE OF PRONOUNCEMENT : 13.09.2017 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(APPEALS) CONFIRMING THE PENALTY LEVIED U/S. 271 D OF THE INCOME-TAX ACT, 1961 [THE ACT]. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD AR E THAT ASSESSEE HAS TAKEN A LOAN OF RS.6,60,000 FROM SHRI RAVI KUMAR LA NKA IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS FOR WHICH PENALT Y U/S. 271D WAS LEVIED. ITA NO.1043/BANG/2016 PAGE 2 OF 5 THE REASON FOR TAKING THE LOAN IN CASH WAS STATED T O BE URGENCY OF MAKING PAYMENT TO THE SELLER FOR PURCHASE OF HOUSE PROPERT Y. SINCE THE ASSESSEE COULD NOT SATISFY THE AO WITH THE REASONS FOR TAKIN G THE LOAN IN CASH, THE AO LEVIED PENALTY U/S. 271D OF THE ACT AGAINST WHIC H THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS), BUT DI D NOT FIND FAVOUR WITH HIM. NOW THE ASSESSEE IS BEFORE THE TRIBUNAL REITE RATING ITS CONTENTIONS AS RAISED BEFORE THE LOWER AUTHORITIES. 3. THE LD. DR, ON THE OTHER HAND, HAS INVITED OUR A TTENTION TO THE ORDER OF THE CIT(APPEALS) THAT ASSESSEE HAS TAKEN A LOAN FROM THE SAID CREDITOR, SHRI RAVI KUMAR LANKA, EARLIER ALSO AND SHORT TERM LOAN WAS TAKEN THROUGH A CHEQUE. THEREFORE, THERE IS NO VALID REASON FOR TAKING LOAN IN CASH OF RS.6,60,000 FROM SHRI RAVI KUMAR LANKA. MOREOVER, SHE HAS NOT PLACED ANY EVIDENCE JUSTIFYING THE NEED OF TAKING A LOAN I N CASH FOR THE INVESTMENT IN HOUSE PROPERTY. BESIDES, HE ALSO PLACED HEAVY R ELIANCE UPON THE ORDER OF CIT(APPEALS). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE ASSESSEE HAS TAKEN A LOAN IN CASH OF RS.6,60,000 FROM SHRI RAVI KUMAR LA NKA FROM WHOM SHE HAS ALSO TAKEN A LOAN OF RS.4 LAKHS IN EARLIER YEAR S, BUT AT THAT TIME LOAN WAS TAKEN THROUGH A CHEQUE. NO SPECIFIC REASONS WE RE FURNISHED AS TO WHY LOAN WAS TAKEN IN CASH. ASSESSEE ALSO COULD NO T PLACE ANY EVIDENCE TO JUSTIFY THAT THIS PAYMENT IN CASH WAS DEMANDED B Y THE SELLER OF THE ITA NO.1043/BANG/2016 PAGE 3 OF 5 HOUSE PROPERTY. BESIDES, NO EVIDENCE IS ALSO PLACE D THAT THE ASSESSEE WAS FORCED TO TAKE LOAN IN CASH TO SHRI RAVI KUMAR LANKA. IN THE ABSENCE OF ANY MATERIAL, IT WILL BE DIFFICULT FOR US TO ACC EPT THE CONTENTION OF ASSESSEE THAT ASSESSEE WAS FORCED TO ACCEPT THE LOAN IN CASH FROM SHRI RAVI KUMAR LANKA. SINCE NO JUSTIFIABLE REASONS HAVE BEEN FURN ISHED FOR TAKING THE LOAN IN CASH, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A PPEALS). FOR THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT OBSERVATIONS OF THE CIT(APPEALS) AS UNDER:- THE APPELLANT HAS SUBMITTED THAT SHE HAD BORROWED A SUM OF RS.6,60,000 FOR INVESTMENT IN HOUSE NO.1700, KEN GERI SATELLITE TOWN EXTENSION, BENGALURU. AS PER INFORMA TION GIVEN BY THE APPELLANT IN APPEAL RELATING TO ASSESSMENT PROC EEDINGS, IT HAS BEEN SUBMITTED THAT THE APPELLANT HAD BOUGHT THE HO USE ON 06.05.2006 FOR A SALE CONSIDERATION OF RS.23,50,000 /- AND STAMP DUTY AND REGISTRATION FEE COST WAS RS.2,21,320/-. SHE HAD TAKEN LOAN OF RS.23,00,000/- FROM CORPORATION BANK FOR TH E ACQUISITION OF THE HOUSE PROPERTY. FURTHER INFORMATION GIVEN RE GARDING CONFIRMATION OF LOAN FROM SRI RAVI KUMAR LANKA IS T HAT A LOAN OF RS.6,60,000/- WAS TAKEN ON 10.04.2006 THE SAME WAS REPAID THROUGH CHEQUE SUBSEQUENTLY STARTING FROM 26.05.200 6. THE EXPLANATION OF THE APPELLANT REGARDING THE CASH LOA N IS NOT CONVINCING. WHEN ALMOST ENTIRE ACQUISITION COST WA S FINANCED BY BANK, THE STATED PURPOSE OF CASH LOAN IS WITHOUT AN Y MERIT. THE APPELLANTS RELIANCE ON THE DECISION IN THE CAS E OF CIT V. BHAGAVATI PRASAD BAJORIA (HUF) (SUPRA) IS OF NOT MUCH USE IN THIS CASE. IN THAT CASE, THE COURT HELD THAT IN CAS E OF AN IMMEDIATE NEED OF MONEY AND TO SATISFY THE IMMEDIATE REQUIREM ENTS, A PERSON COULD APPROACH A MONEY LENDER OR A FRIEND OR A RELATIVE TO SATISFY IMMEDIATE REQUIREMENT. IN SUCH CASES, THERE WAS NO JUSTIFICATION IN IMPOSING PENALTY UNDER SECTION 271 D. HOWEVER, IN THIS CASE, THE APPELLANT HAS STATED THAT THE PUR POSE OF LOAN WAS ACQUISITION OF HOUSE PROPERTY. A HOUSE PROPERTY IS BOUGHT AFTER A NEGOTIATION AND CONSIDERING THE RESOURCES AVAILABLE . THERE WAS NEITHER ANY URGENCY OR ANY NEED OF MONEY IN THIS CA SE AS A ITA NO.1043/BANG/2016 PAGE 4 OF 5 HOUSING LOAN FROM BANK WAS USED TO MEET THE ACQUISI TION COST AND THEREFORE, THE EXPLANATION IS DEVOID OF ANY SUBSTAN CE. IN THE CASE OF CIT V. KUNDRATHUR FINANCE & CHIT CO. (SUPRA), THE COURT NOTED THAT IF TAX PAYER COULD NO T GET A LOAN OR A DEPOSIT BY ACCOUNT PAYEE CHEQUE OR DEMAND DRAFT FOR SOME BONAFIDE REASONS, THE AUTHORITY VESTED WITH POWER T O IMPOSE A PENALTY HAS A DISCRETION NOT TO IMPOSE PENALTY. HO WEVER, IN THIS CASE, THE ASSESSEE COULD NOT EVEN DEMONSTRATE THE P URPOSE FOR TAKING LOAN. THERE IS NO REASON AS TO HOW SHE COULD NOT OBTAIN AN ACCOUNT PAYEE CHEQUE IN BENGALURU. IT IS NOTED THA T SHE HAD TAKEN OF RS.4,00,000/- ON 19.05.2005 FROM THE SAME LENDER SRI. RAVI KUMAR LANKA PRIOR TO TAKING A LOAN OF RS.6,60,000/- ON 10.04.2006 FROM HIM. THEREFORE, IT IS NOT A CASE WH ERE SHE WAS NOT ABLE TO TAKE ANY LOAN THROUGH ACCOUNT PAYEE CHE QUE. THE ASSESSEE'S EXPLANATION IS NOT ACCEPTABLE AS IT IS N OT REFLECTED FROM THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, THE PENALTY IMPOSED UNDER SECTION 271D IS CONFIRMED. GROUNDS OF APPEAL ARE NOT ALLOWED. 5. SINCE NO SPECIFIC INFIRMITY IS POINTED OUT IN TH E ORDER OF THE CIT(APPEALS), WE CONFIRM HIS ORDER. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF SEPTEMBER, 2017. SD/- ( SUNIL KUMAR YADAV) JUDICIAL MEMBER BANGALORE, DATED, THE 13 TH SEPTEMBER, 2017. / D ESAI S MURTHY / ITA NO.1043/BANG/2016 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.