Bhosale Constructions, Pune V. ITO Wd. 3(1), Pune

ITA 1178/PUN/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7585 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-01-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 29-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY DAMLE
• Assessee Lawyers: K SRINIVASAN
• Keywords: Ignorance of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 1178/PN/09 (ASSTT YEAR: 1999-2000) BHOSALE CONSTRUCTION, APPELLANT 1, BHOSALE HOUSE, 13/2 KARVE ROAD, PUNE PAN AAEEB6897Q VS. INCOME-TAX OFFICER, WARD 3(1), PUNE RESPONDENT APPELLANT BY : SHRI K SRINIVASAN RESPONDENT BY : SHRI ABHAY DAMLE ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY ASSESSEE IS PREFERRED AGAINST THE O RDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 14.9.2009 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 28.6.2007 PASS ED BY THE ASSESSING OFFICER UNDER SEC. 271D OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 1999-2000. 2. THE RELEVANT FACT LEADING TO THE LEVY OF PENALTY UNDER SECTION 271-D OF THE ACT BY THE ASSESSING OFFICER ARE THAT THE AS SESSING OFFICER HAD NOTICED THAT THE ASSESSEE HAD ACCEPTED LOAN THROUGH BEARER CHEQUES AMOUNTING TO RS 2,50,000/- THEREBY VIOLATING THE PR OVISIONS OF SEC. 269SS OF THE ACT. THE ASSESSING OFFICER, AFTER REJECTING THE CONTENTIONS RAISED ITA NO 1178/PN/09 M/S BHOSALE CONSTRUCTION, PUNE 2 ON BEHALF OF THE ASSESSEE, LEVIED PENALTY UNDER SEC TION 271D OF THE ACT AT RS 2,50,000/-, WHICH WAS CONFIRMED BY THE COMMIS SIONER OF INCOME- TAX (APPEALS). 3. BEING AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. BEFORE US, ON BEHALF OF THE ASSESSEE, THE LEARNED A.R STATED THAT THE ASSESSEE HAD TO BORROW AN AMOUNT OF RS 2,50,000/- BY BEARER CHEQUES DURING THE YEAR UNDER CONSIDERATION TO MEET THE URGENT FINANCIAL NE EDS. THOUGH THE AMOUNT WAS BORROWED THROUGH BEARER CHEQUES, THE ASS ESSEE HAD DEPOSITED THESE CHEQUES INTO BANK. MOREOVER, THE AS SESSEE HAD REPAID THE BORROWED AMOUNT BY ACCOUNT PAYEE CHEQUES. THE A SSESSEE ALSO PAID INTEREST ON THE BORROWED AMOUNT BY ACCOUNT PAYEE CH EQUES. THEREFORE, IT WAS CONTENDED THAT THE PENALTY SHOULD BE DELETED. O N THE OTHER HAND, THE LEARNED D.R SUPPORTED THE ORDERS OF THE AUTHORI TIES BELOW AND SUBMITTED THAT IGNORANCE OF LAW IS NOT AN EXCUSE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y, WE FIND THAT THE ASSESSEE HAD TO BORROW AN AMOUNT OF RS 2,50,000/- B Y BEARER CHEQUES TO MEET URGENT FINANCIAL NEEDS. THE SAME WAS REPAID AL ONGWITH DUE INTEREST TO THE BORROWERS BY ACCOUNT PAYEE CHEQUES, WHICH IS NOT DISPUTED BY THE REVENUE. TAKING ALL FACTS AND CIRCUMSTANCES OF THE CASE INTO CONSIDERATION AND THE BUSINESS OF THE ASSESSEE AS W ELL, I.E. CIVIL CONSTRUCTION, WE FIND THAT THERE WAS REASONABLE CAU SE FOR THE ASSESSEE TO BORROW THE AMOUNT OF RS 2,50,000/- BY BEARER CHEQUE S AS STATED ABOVE. MOREOVER, THE SAME AMOUNT HAS ALREADY BEEN REFUNDED WITH INTEREST THEREON BY ACCOUNT PAYEE CHEQUES, WHICH IS NOT DISP UTED BEFORE US. SO, WE ARE OF THE VIEW THAT THE ASSESSEE HAD TO DO THE ABOVESAID TRANSACTION ITA NO 1178/PN/09 M/S BHOSALE CONSTRUCTION, PUNE 3 IN ORDER TO MEET ITS URGENT BUSINESS NEEDS AND, THE REFORE, THE PENALTY IS DIRECTED TO BE DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 31ST DAY OF J ANUARY, 2011. SD/- SD /- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 31ST JANUARY, 2011 COPY TO:- 1) M/S BHOSALE CONSTRUCTIONS, PUNE 2) THE ITO WD 3(1), PUNE, 3) THE CIT (A) II, PUNE 4) THE CIT-II, PUNE 5) THE D R, A BENCH, ITAT, PUNE. BY ORDER TRUE COPY ASSTT.REGISTRAR,I.T.A.T., PUNE B