Shri Prakash Chandnani, Bhopal V. The ACIT, 3(1), Bhopal

ITA 117/IND/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7146 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: M K SHARMA
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NOS.117 AND 118/IND/2011 A.Y. 2006-07 PRAKASH CHANDNANI BHOPAL PAN ACRPC-4212F ... APPELLANT VS ASSTT.COMMISSIONER OF INCOME TAX 3(1), BHOPAL .. RESPONDENT APPELLANT BY : SHRI M.K. SHARMA RESPONDENT BY : SHRI ARUN DEWAN DATE OF HEARING 16.12.2011 DATE OF PRONOUNCEMENT 20.12.2011 2 O R D E R PER R.C. SHRMA, ACCOUNTANT MEMBER THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) DATED 28.2.2011 FOR THE ASSESSMENT YEAR 2006-07 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271D AND 271E OF THE INCOME TAX ACT, 1961. 2. AT THE OUTSET, IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS RECEIVED CASH LOAN FROM HIS WIFE WHICH WAS ALSO REPAID DURING THE YEAR. THE ASSESSING OFFICER HAS IMPOSED PENALTY IN VIOLATION OF PROVISIONS OF SECTIONS 269SS AND 269T OF THE ACT. HE PLACED ON RECORD THE ASSESSMENT ORDER DATED 29 TH DECEMBER, 2008 WHEREIN THE ASSESSING OFFICER HAS ALSO ADDED THE ENTIRE AMOUNT OF LOAN U/S 68 OF THE ACT TREATING THE SAME AS ASSESSEES INCOME. 3 AS PER THE LEARNED COUNSEL FOR THE ASSESSEE, WHEN THE ENTIRE AMOUNT OF LOAN HAS BEEN ADDED AS THE INCOME, THERE IS NO REASON FOR LEVY OF PENALTY U/S 271D AND 271E OF THE ACT. 3. ON THE OTHER HAND, THE LEARNED SR. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND FIND THAT THE ASSESSEE WAS IN RECEIPT OF LOAN FROM HIS WIFE WHICH WAS ALSO REPAID DURING THE YEAR ITSELF. THE ASSESSING OFFICER DID NOT ACCEPT THE CASH TRANSACTION OF TAKING THE LOAN, THEREFORE, ADDED THE ENTIRE AMOUNT OF LOAN OF RS. 22 LACS TO THE ASSESSEES INCOME U/S 68 OF THE ACT. HOWEVER, PENALTY WAS ALSO LEVIED U/S 271D AND 271E OF THE ACT ON THE PLEA THAT THE LOAN WAS TAKEN IN CASH AND REPAID IN CASH. AS PER OUR CONSIDERED 4 VIEW, WHEN THE TRANSACTION AS A WHOLE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE AMOUNT OF LOAN HAS BEEN ADDED TO THE ASSESSEES TOTAL INCOME, THERE DOES NOT ARISE ANY VALID REASON FOR LEVYING PENALTY BY TREATING THAT THE LOAN WAS TAKEN AND GIVEN BACK IN CASH. SINCE THE ENTIRE AMOUNT HAS BEEN TREATED AS THE ASSESSEES INCOME, NO QUESTION OF ANY VIOLATION OF TRANSACTION HAVING BEEN ENTERED IN CASH ARISES. ACCORDINGLY WE DO NOT FIND ANY MERIT IN IMPOSITION OF PENALTY WHEN THE ENTIRE AMOUNT OF LOAN HAS BEEN TREATED BY THE ASSESSING OFFICER IN THE ASSESEES INCOME. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. BEFORE PARTING WITH THE MATTER, IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE HAS PREFERRED AN APPEAL AGAINST 5 THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO KEEP A FOLLOW UP AND IF AT A LATER STAGE IN THE APPELLATE PROCEEDINGS, THE ORDER OF THE ASSESSING OFFICER IS REVERSED, AGAIN HE CAN INITIATE THE PENALTY PROCEEDINGS AT APPROPRIATE TIME. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED HEREINABOVE. SD SD (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DECEMBER 20 , 2011 COPY TO APPELLANT,RESPONDENT,CIT, CIT(A), DR DN/-