Sri Gurulingappa Bhimsha Kalshetty , Gulbarga V. Joint Commissioner of Income Tax Gulbarga Range , Gulbarga

ITA 111/BANG/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6953 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Set aside
• Section: 271D; 271E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NOS.111 & 112/BANG/2017 ASSESSMENT YEAR : 2008-09 SRI GURULINGAPPA BHIMSHA KALSHETTY, NO.78, KIADB INDUSTRIAL AREA, GULBARGA-585 104. PAN APVPK 6644 N VS. THE JT. COMMISSIONER OF INCOME-TAX GULBARGA RANGE, GULBARGA. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI R.N SIDDAPPAJI, ADDL. CIT DATE OF HEARING : 11.07.2019 DATE OF PRONOUNCEMENT : 31.07.2019 O R D E R PERB.R BASKARAN,ACCOUNTANT MEMBER BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A), GULBARGA CONFIRMING THE PENALTY LEVIED U/S 271D AND 271E OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS RUNNING A DALL MILL IN THE NAME OF M/S GURUDATTA IN DUSTRIES AT GULBARGA. THE AO NOTICED THAT THE ASSESSEE HAS REC EIVED LOANS FROM M/S GURULINGAPPA B KALSHETTY (HUF) AND ALSO RE PAID THE SAME IN PART IN CASH IN VIOLATION OF PROVISIONS OF SEC.269SS AND 269T OF THE ACT. ACCORDINGLY HE REFERRED THE MATTE R TO JOINT ITA NO.111 & 112/BANG/2017 PAGE 2 OF 5 COMMISSIONER OF INCOME TAX, WHO INITIATED PENALTY P ROCEEDINGS U/S 271D AND 271E OF THE ACT. 3. BEFORE LD JCIT, THE ASSESSEE SUBMITTED THAT HU F OF THE ASSESSEE IS HAVING AGRICULTURAL LANDS AND HE WAS RE CEIVING HIS SHARE OF AGRICULTURAL INCOME EVERY YEAR WHICH WAS CREDITE D TO THE ACCOUNT OF GURULINGAPPA B KALSHETTY (HUF). DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED RS.1,22,730/- AS HIS SHARE OF AGRICULTURAL INCOME AND THE SAME IS SHOWN AS CASH R ECEIVED FROM HUF. THE ASSESSEE HAS CLAIMED TO HAVE PAID A SUM O F RS.38,825/- TOWARDS AGRICULTURAL EXPENSES AND DEBITED THE ACCOU NT OF HIS HUF. IT WAS SUBMITTED THAT THE ABOVE SAID RECEIPT AND PA YMENT SHOULD NOT BE CONSIDERED AS LOAN TRANSACTIONS IN VIOLATION OF SEC.269SS AND 269T OF THE ACT. THE LD JCIT WAS NOT CONVINCED WITH THE SAID EXPLANATIONS OF THE ASSESSEE AND ACCORDINGLY LEVIED PENALTY OF RS.1,22,730/- U/S 271D OF THE ACT FOR ACCEPTING LOA N IN VIOLATION OF SEC.269SS OF THE ACT. SIMILARLY HE LEVIED A PENALT Y OF RS.38,835/- U/S 269T OF THE ACT FOR REPAYING LOAN IN VIOLATION OF SEC.269T OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAME. 4. BEFORE US, THE LD A.R SUBMITTED THAT THE HUF HAS GROWN TOOR DALL IN ITS LANDS AND THE SAME WAS SUPPLIED TO THE ASSESSEE, SINCE THE ASSESSEE IS RUNNING A DALL MILL. THE TOOR DALL WAS PURCHASED FROM THE HUF TO THE TUNE OF RS.1,22,730/- ON CREDIT BASIS AND HENCE THE ACCOUNT OF HUF WAS CREDITED BY THAT AMOUN T. OUT OF THE SAID RUNNING ACCOUNT, A SUM OF RS.38,835/- WAS REPA ID. ACCORDINGLY HE SUBMITTED THAT THE TRANSACTIONS WITH HUF WERE PURCHASE TRANSACTIONS AND NOT LOAN TRANSACTIONS. A CCORDINGLY HE ITA NO.111 & 112/BANG/2017 PAGE 3 OF 5 SUBMITTED THAT THE PROVISIONS OF SEC.269SS AND 269T SHALL NOT APPLY TO THESE TRANSACTIONS. IN SUPPORT OF THIS SU BMISSIONS, THE LD A.R FURNISHED COPIES OF CASH BOOK TO SHOW THAT THE ASSESSEE HAS DEBITED PURCHASES ACCOUNT WITH RS.1,22,730/- 5. WE HEARD LD D.R AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE IS OFFERING NEW EXPLANATIONS BEFORE US. T HE COPY OF CASH BOOK FURNISHED BY THE ASSESSEE WOULD SHOW THAT THE ASSESSEE HAS DEBITED PURCHASES ACCOUNT WITH THE ABOVE SAID AMOUN T OF RS.1,22,730/- AND HAS GIVEN CORRESPONDING CREDIT TO HUF ACCOUNT. HENCE, AS PER THE CASH BOOK, THE CREDIT OF RS.1,22, 730/- MADE IN THE ACCOUNT OF HUF REPRESENTS PURCHASE TRANSACTION. SINCE THE PURCHASE TRANSACTION WAS ENTERED IN CASH BOOK, IT H AS BEEN REFLECTED AS CASH RECEIPT IN THE ACCOUNT OF HUF, AS PER THE SOFTWARE PROGRAM. THERE SHOULD NOT BE ANY DISPUTE THAT THE PURCHASE TRANSACTIONS ENTERED ON CREDIT BASIS WOULD NOT ATTR ACT THE PROVISIONS OF SEC.269SS, SINCE THE SAME CANNOT BE C ONSIDERED AS LOAN TRANSACTIONS. 6. SINCE THE ASSESSEE HAS OFFERED NEW EXPLANATION S BEFORE US, WE ARE OF THE VIEW THAT THE ISSUE URGED IN BOTH THE AP PEALS REQUIRES FRESH EXAMINATION AT THE END OF LD JCIT IN THE LIGH T OF NEW EXPLANATIONS. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) IN BOTH THE APPEALS AND RESTORE ALL THE ISSU ES TO THE FILE OF LD JCIT FOR EXAMINING THEM AFRESH IN THE LIGHT OF NEW EXPLANATIONS AND EVIDENCES FURNISHED BY THE ASSESSEE. ITA NO.111 & 112/BANG/2017 PAGE 4 OF 5 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSES SEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST JULY, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 31ST JULY, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.