Shri Raj Devendrasingh Mahipatsinh, Baroda V. The Addl. CIT, Range-2, Baroda

ITA 1131/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8311 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER RAJ DEVENDRASINGH MAHIPATSINH, 15, NIRMAN SOCIETY, ALKPURI, BARODA PAN: ACOPR8440B (APPELLANT) VS ADDL. CIT, RANGE - 2 BARODA (RESPONDENT) REVENUE BY : MS PRAJNA PARAMITA , SR. D . R. ASSESSEE BY: S H R I S.N. DIVATIA , A.R. DATE OF HEARING : 22 - 09 - 2 017 DATE OF PRONOUNCEMENT : 09 - 10 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , AR IS ES FROM ORDER OF THE CIT(A) - 5, BARODA DATED 19 - 12 - 2014 , IN PROCEEDINGS UNDER SECT ION 271D OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1131 / A HD/20 15 A SSESSMENT YEAR 2011 - 12 I.T.A NO. 1131 /AHD/20 15 A.Y. 2011 - 12 PAGE NO RAJ DEVENDRASINGH MAHIPATSINH VS. ADDL. CIT 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN CONFIRMING PENALTY U/S 271D OF THE IT ACT, 1961 OF RS. 5,40,000/ - LEVIED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE - 2, BARODA WITHOUT APPRECIATING THE CIRCUMSTANCES IN WHICH THE APPELLANT WAS REQUIRED TO BORROW AMOUNT IN URGENCY IN CASH. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271D OF THE IT ACT, 1961 WITHOUT APPRECIATING AND WITHOUT CONSIDERING THE FACTS WITH REGARDS TO THE URGENCY AND NECESSITY OF THE APPELLANT TO BORROW THE AMOUNT OF RS. 5,40,000/ - IN CASH. 3. IN THIS CASE, THE AS SESSEE HAS FILED RETURN OF INCOME ON 30 TH MARCH, 2012 DECLARING INCOME OF RS. 4 , 29 , 480/ - . THE ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 16 TH DECEMBER , 2013 BY DETERMINING TOTAL INCOME OF RS . 4 , 53 , 450/ - . DURING THE COURSE OF A SSESSMENT PROCEE DINGS , THE ASSESS ING OFFICER HAS NOTICED THAT ASSESSEE HAS ACCEPTED CASH LOAN OF RS. 5 , 40 , 000 ON 15 TH FEB, 2012 IN CONTRAVENTION OF PROVISION OF SECTION 269SS OF THE ACT . CONSEQUERNTLY, THE ADDITIONAL CIT HAS LEVIED PENALTY OF RS. 5,40,000/ - U/S. 271D OF THE ACT. 4. AGGRIEVED AGAINST THE DECISION OF THE ADDL. CIT, THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 2.3.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAD RECEIVED UNSECURED LOANS FROM SHRI ANIL GOSALIA PRIOR TO THE RECEIPT OF THIS CASH LOAN AS WELL AS ON SUBSEQUENT DATES BY WAY OF ACCOUNT PAYEE CHEQUES. THEREFORE, THERE WAS NO REASON FOR THE ASSESSEE TO ACCEPT THE UNSECURED LOAN OF RS.5,40,000/ - IN CASH FROM THE SAME PERSON. THE ASSESSEE HAS SUBMITTED THAT THERE WAS URGENCY OF CASH FOR THE PURPOSE OF PAYMENT OF STAMP DUTY FOR THE REGISTRATION OF PURCHASE DEED WHICH WAS EARLIER EXECUTED VIDE I.T.A NO. 1131 /AHD/20 15 A.Y. 2011 - 12 PAGE NO RAJ DEVENDRASINGH MAHIPATSINH VS. ADDL. CIT 3 BANAKHAT DATED 01.01.2011. THE ASSESSING OFFICER HAS OBSERVED THAT THE SAID PURCHASE AGREEMENT WAS ALREADY MADE VIDE BANAKHAT DATED 01.01.2011, WHICH IS ONE AND HALF MONTHS PRIOR TO THE DATE OF REGISTRATION OF THE SAID PURCHASE DEED DATED 14.02.2011. THEREFORE, THERE WAS SUFFICIENT TIME FOR THE ASSESSEE TO ARRANGE CASH THROUGH HIS BANK ACCOUNT FOR THE PAYMENT OF STAMP DUTY. EVEN IF THE ASSESSEE HAD TO TAKE LOAN FOR THIS PURPOSE, THE ASSE SSEE HAD SUFFICIENT TIME FROM THE DATE OF BANAKHAT TILL REGISTRATION OF PURCHASE DEED TO ARRANGE LOANS BY WAY OF ACCOUNT PAYEE CHEQUE AND SUBSEQUENTLY ASSESSEE COULD HAVE WITHDRAWN CASH FROM HIS OWN BANK A/C. FOR THIS PURPOSE. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE CASH LOAN WAS ACCEPTED FOR URGENT REQUIREMENT DOES NOT BORNE OUT OF THE FACTS OF EVENTS. 2.3.2 THE ASSESSEE HAD ALSO PRODUCED A CASH SUMMARY STATEMENT OF SHRI ANIL GOSALIA FOR THE PERIOD 2010 - 11 SHOWING THE SOURCE OF CASH GIVEN BY HIM TO LESSEE. FROM THE PERUSAL OF THE STATEMENT, IT WAS FOUND THAT SUCH CASH WERE SHOWN TO HAVE WITHDRAWN BY SHRI GOSALIA FROM HIS BANK ACCOUNT DURING OCTOBER AND NOVEMBER 2010, WHEREAS, THE CASH LOAN IS ALLEGEDLY GIVEN ON 15.2.2011 TO THE ASSESSEE. THEREFOR E, THE ASSESSING OFFICER HELD THAT 'IT IS NOT THE CASE OF THE ASSESSEE THAT THE CASH WAS IMMEDIATELY WITHDRAWN BY HIM FOR SUCH SO CALLED 'URGENCY' AS STATED BY THE ASSESSEE'. THEREFORE, I AM IN AGREEMENT WITH THE ASSESSING OFFICER THAT ASSESSEE'S SUBMISSIO N THAT CASH LOAN WAS RECEIVED FOR URGENT NEED OF CASH TOWARDS PAYMENT OF STAMP DUTY AND REGISTRATION FEES DOES NOT SEEM LOGICAL, RATHER FROM THE CHAIN OF EVENTS, IT IS AMPLY CLEAR THAT THE TRANSACTION BY THE ASSESSEE WITH THE SAID PERSON WAS GOING ON FOR S EVERAL TIMES BEFORE THE SAID CASH LOAN AND THE ASSESSEE COULD HAVE EASILY OBTAINED THE SAID AMOUNT BY WAY OF ACCOUNT PAYEE CHEQUE TO AVOID THE VIOLATION OF SECTION 269SS OF THE INCOME - TAX ACT, 1961. 2.3.3. THE ASSESSING OFFICER HAS ALSO HIGHLIGHTED THAT FR OM THE COPY OF BANK ACCOUNT STATEMENT OF THE ASSESSEE WITH INDIAN BANK THAT, ALL THE LOAN AMOUNT RECEIVED FROM SHRI ANIL GOSALIA AS STATED IN PARA 5.1 ABOVE, ARE CREDITED IN THE SAID ACCOUNT AND AS ON 11.2.2011 (I.E. PRIOR TO THE DATE OF REGISTRATION), THE BANK BALANCE IN THE ABOVE A/C WAS RS.36,41,344/ - AND THERE IS NO TRANSACTION TILL 15.2.2011 (I.E. DATE OF REGISTRATION OF THE PURCHASE DEED). FURTHERMORE, THE BALANCE IN HIS BANK ACCOUNT WAS MORE THAN RS.5,40,000/ - DURING THE MONTH OF FEBRUARY 2011. THEREF ORE THE ASSESSEE'S CLAIM THAT CASH LOAN WAS ACCEPTED FOR URGENT PAYMENT OF STAMP DUTY FOR REGISTRATION OF PURCHASE DEED FALLS FLAT. ON THE OTHER HAND THE ASSESSEE COULD HAVE EASILY MET THE REQUIREMENT FROM HIS OWN BANK ACCOUNT WHERE SUFFICIENT BALANCE WAS AVAILABLE. THESE OBSERVATIONS OF THE ASSESSING OFFICER HAVE NOT BEEN CONTROVERTED BY THE APPELLANT. IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT BOTH THE PERSON WERE RESIDING IN THE AREA WHERE BANKING FACILITIES ARE NOT AVAILABLE OR IT IS ALSO NOT THE CASE THAT BOTH THE PERSONS DO NOT HAVE BANK ACCOUNTS. THEREFORE, IT IS HELD THAT THERE WAS NO REASONABLE CAUSE FOR THE ASSESSEE TO ACCEPT LOAN OF RS.5,40,000/ - BY CASH, IN VIOLATION OF SECTION 269SS OF THE ACT. THE ASSESSING OFFICER HAS RIGHTLY REJECTED THE SU BMISSION OF THE ASSESSEE AND LEVIED PENALTY U/S 271D OF THE ACT FOR RS.5,40,000/ - . THE SAME IS HEREBY CONFIRMED. I.T.A NO. 1131 /AHD/20 15 A.Y. 2011 - 12 PAGE NO RAJ DEVENDRASINGH MAHIPATSINH VS. ADDL. CIT 4 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS FURNISHED PAPER B OOK CONTAINING WRITTEN SUBMISION MADE BEFORE T HE LD. C IT(A), SALE DEED ETC. ALONG WITH JUDICIAL PRONOUNCEMENT AND CONTENDED THAT THE CASH LOAN WAS ACCEPTED F OR URGENT REQUIREMENT WHICH W AS NOT CONSIDERED BY THE LD.CIT(A) . ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LD . CIT(A). 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE OBSERVED THAT IT WAS UNDISPUTED FACT THAT THE ASSESSEE WAS TO PAY STAMP DUTY OF RS. 4 ,46, 000/ - BY WAY OF PURCHASE OF STAMP PAPER FOR EXECUTION OF DEED OF PURCHASE FOR THE LAND AT VILLAGE BAROLA, TALUKA - KAROL IN DISTRICT PANCHMAHAL FROM VENDOR MR. NAR VATS IN H A C HA VDA . THE ASSESSEE WAS TOLD BY THE STAMP VENDOR THAT T HE PAYMENT FOR PURCHASING STAMP PAPER S TO BE PAID IN CASH SO THAT THE STAMP VENDOR PAY THE SAME INTO GOVERN MENT TREASURY FOR GETTING THE STAMP PAPERS. WE HAVE ALSO PERUSED THE DOCUMENT S FURNISHED IN THE PAPER BOOK DEMONSTRATING THAT ASSESSEE WAS NOT HAVING CASH AT TH E TIME OF PURCHASE OF STAMP PAPER S. WE HAVE ALSO NOTICED F ROM THE DETAILS SUBMITTED THAT ON 11 T H FEB, 2011, ASSESSEE WAS HAVING BANK BALANCE OF RS. 36,41,344/ - AGAINST WHICH ON 15 TH FEB, 2011, THE ASSESSEE HAD ALREADY ISSUED CHEQUES DATED 17 TH FEB, 2011 AND 20 TH FEB, 2011 IN ADVANCE AGGREGATING TO THE AMOUNT OF RS. 37 LACS TO THE VENDOR OF THE PROPE RTY SHRI NAVRAT SINGH F. CHAVADA. WE HAVE FURTHER NOTICED THAT ISSUING OF THESE CHEQUES WERE REGISTERED IN THE SALE DEED DATED 17 TH FEB, 2011 . WE CONSIDERED THAT I.T.A NO. 1131 /AHD/20 15 A.Y. 2011 - 12 PAGE NO RAJ DEVENDRASINGH MAHIPATSINH VS. ADDL. CIT 5 AFORESAID CONSTRAINTS HAVE IMPELLED THE ASSESSEE TO PROCURE CASH LOAN FROM DR. ANIL GOSALIA O F RS. 5,40,000/ - FOR MAKING PAYMENT TO THE STAMP VENDOR IN CASH ON 15 TH FEB, 2012 FOR PURCHASING OF STAMP PAPER WROTH RS. 4 , 46 , 600/ - I N CASH FROM THE SAID VENDOR FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AND REGISTRATION FEES . AFTER CONSIDERING ALL THES E FACTS AND CIRCUMSTANCES, WE ARE NOT INCLINED WITH THE DECISION OF LD. CIT(A), THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED . 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 09 - 10 - 201 7 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) J UDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 09 /10 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,