Addl.Commissioner of Income tax, Bangalore V. Sri Shyam Jamadagni, Bangalore

ITA 1143/BANG/2014

• Counselvise Citation: 114321114 RSA 2014
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: PRASANNA ADIGA
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.1143/BANG/2014 ASSESSMENT YEAR : 2009-10 THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 4, BANGALORE. VS. SHRI SHYAM JAMADAGNI, NO.378, 16 TH A MAIN, 4 TH T BLOCK, JAYANAGAR, BANGALORE 560 011. PAN: AANPJ 0750D APPELLANT RESPONDENT APPELLANT BY : DR. P.K. SRIHARI, ADDL. CIT(DR) RESPONDENT BY : SHRI PRASANNA ADIGA, C.A. DATE OF HEARING : 16.03.2015 DATE OF PRONOUNCEMENT : 20.03.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 1.5.2014 OF THE CIT(APPEALS)-II, BANGALORE RELATING TO A.Y. 200 9-10. 2. THE ASSESSEE IS AN INDIVIDUAL. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASS ESSEE HAD TAKEN A LOAN OF RS.5 LAKHS FROM ONE SHANKAR SUBRAMANYAM, C.A. AN D ANOTHER SUM OF RS.1,73,000 BY CASH FROM DIFFERENT FRIENDS. THE AO WAS OF THE VIEW THAT ITA NO.1143/BANG/2014 PAGE 2 OF 5 UNDER THE PROVISIONS OF SECTION 269SS OF THE ACT, T HE ASSESSEE OUGHT NOT TO HAVE TAKEN LOANS IN CASH IN EXCESS OF RS.20,000 AND THAT SUCH LOANS HAD TO BE TAKEN ONLY BY ACCOUNT PAYEE CHEQUE OR DRAFT. SI NCE THERE WAS VIOLATION OF THE PROVISIONS OF SEC. 269SS OF THE ACT, THE AO INITIATED PENALTY PROCEEDINGS U/S. 271D OF THE ACT. 3. U/S. 273B OF THE ACT, PENALTY U/S. 271D CANNOT B E IMPOSED IF THE ASSESSEE PROVES THAT THERE WAS A REASONABLE CAUSE F OR TAKING LOANS IN CASH IN EXCESS OF RS.20,000. THE ASSESSEE EXPLAINE D THAT HE HAD ISSUED A CHEQUE FOR RS.5 LAKHS TO ONE SHRI SANDEEP KUMAR IN CONNECTION WITH A PROPERTY TRANSACTION. THE SAID CHEQUE WAS PRESENT BY THE PAYEE TO THE ASSESSEES BANKERS FOR PAYMENT. SINCE THERE WAS NO SUFFICIENT BALANCE IN THE ASSESSEES BANK ACCOUNT, THE BANKERS CALLED THE ASSESSEE AND ASKED HIM TO DEPOSIT FUNDS IN HIS ACCOUNT SO THAT CHEQUE COULD BE HONOURED AND THAT IN CASE FUNDS ARE NOT ARRANGED, THE CHEQUE WOU LD BE DISHONOURED. IT WAS IN THESE CIRCUMSTANCES THAT THE ASSESSEE TOOK A CASH LOAN OF RS.5 LAKHS FROM SHANKAR SUBRAMANYAM AND DEPOSITED THE SA ME INTO HIS BANK ACCOUNT. 4. WITH REGARD TO CASH LOAN OF RS.1,73,000, THE ASS ESSEE POINTED OUT THAT CASH LOANS HAVE BEEN AVAILED FROM 12 DIFFERENT PERSONS AND EACH OF THE CASH LOAN WAS LESS THAN RS.20,000 AND THEREFORE THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT, INSO FAR AS BORROWING OF RS.1,73,000 IS CONCERNED. ITA NO.1143/BANG/2014 PAGE 3 OF 5 5. THE AO DID NOT DISPUTE THE AFORESAID FACTS AS ST ATED BY THE ASSESSEE, BUT WAS OF THE VIEW THAT THE CIRCUMSTANCE S WHICH PROMPTED THE ASSESSEE TO AVAIL CASH LOANS WAS NOT ENOUGH TO PROV E THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO COMPLY WITH PROVISI ONS OF SECTION 269SS. 6. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) WAS OF THE VIEW THAT THE CIRCUMSTANCES EXPLAINED BY THE ASSESSEE WAS SUF FICIENT TO HOLD THAT THERE WAS REASONABLE CAUSE FOR THE ASSESSEES FAILU RE TO COMPLY WITH THE PROVISIONS OF SECTION 269SS OF THE ACT. 7. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WHO RELIED ON THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE R ELIED ON THE ORDER OF CIT(APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS AL READY STATED, THE FACTUAL POSITION WITH REGARD TO ISSUE OF A CHEQUE F OR RS.5 LAKHS FOR A PROPERTY TRANSACTION AND LACK OF FUNDS IN THE BANK ACCOUNT OF THE ASSESSEE TO HONOUR THE SAID CHEQUE IS NOT IN DISPUTE. THE F ACT THAT ASSESSEE BORROWED RS.5 LAKHS FROM SHANKAR SUBRAMANYAM AND DE POSITED THE SAME IN THE BANK ACCOUNT TO HONOUR THE CHEQUE OF RS.5 LA KHS ISSUED BY HIM IS ALSO NOT IN DISPUTE. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THERE WAS ITA NO.1143/BANG/2014 PAGE 4 OF 5 A REASONABLE CAUSE FOR THE ASSESSEES FAILURE TO CO MPLY WITH THE PROVISIONS OF SECTION 269SS OF THE ACT. 10. AS FAR AS CASH LOAN OF RS.1,73,000 IS CONCERNED , EACH OF THE CASH LOAN IS LESS THAN RS.20,000. THE DETAILS IN THIS R EGARD ARE GIVEN BY THE ASSESSEE AT PAGE 7 OF THE ASSESSEES PAPERBOOK FILE D BEFORE US. THEREFORE, THERE CANNOT BE ANY VIOLATION OF THE PRO VISIONS OF SECTION 269SS, AS FAR AS SUM OF RS.1,73,000 IS CONCERNED. 11. WE ARE OF THE VIEW THAT THE LD. CIT(APPEALS) WA S FULLY JUSTIFIED IN CANCELLING THE ORDER OF THE ASSESSING OFFICER IMPOS ING PENALTY ON THE ASSESSEE. WE THEREFORE CONFIRM THE ORDER OF CIT(AP PEALS). 12. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF MARCH , 2015 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 20 TH MARCH , 2015 . /D S/ ITA NO.1143/BANG/2014 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE.