M/s. Rajchandra Medical Corporation, Ahmedabad V. The Addl.CIT.,Range-2, Ahmedabad

ITA 1316/AHD/2011

• Counselvise Citation: 131620514 RSA 2011
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD TANWANI
• Assessee Lawyers: DEEPAK SONI
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M .) I.T.A. NO. 1316/AHD./2011 ASSESSMENT YEAR : 2005-2006 M/S. RAJCHANDRA MEDICAL CORPORATION, ABAD -VS- ADDL.C.I.T., RANGE-2, ABAD (PAN : AAEFR 7206D) (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI DEEPAK SONI, A.R . RESPONDENT BY : SHRI VINOD TANWANI, SR. D.R. DATE OF HEARING : 17.08.2011 DATE OF PRONOUNCEMENT : 17.08.2011 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 17.02.2011 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XV I, AHMEDABAD CONFIRMING THE PENALTY OF RS.3,90,879/- LEVIED BY THE AO UNDER SEC TION 271E OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2005-2006. 2. BRIEFLY STATED, THE FACTS ARE THAT THE ADDITIONA L C.I.T., RANGE-2, AHMEDABAD LEVIED THE PENALTY OF RS.3,90,879/- FOR THE PAYMENT OF LOA N OF RS.1,24,000/- TO JALPA NIKUNJ PATEL, RS.1,23,879/- TO VAISHALI BANSIBHAI PATEL AN D RS.1,43,000/- TO INDIRABEN B. PATEL IN VIOLATION OF PROVISIONS OF SECTION 269T. WHEN THE A O ASKED THE ASSESSEE AS TO WHY THE PENALTY WILL NOT BE LEVIED, THE ASSESSEE REPLIED TH AT THE ASSESSEE HAS TAKEN DEPOSIT OF RS.2,03,510/- FROM PUNAMBHAI M PATEL AND WHEN HE WA NTED THE MONEY BACK, AN AMOUNT OF RS.1,43,000/- WAS GIVEN TO INDRABEN, DAUGHTER-IN -LAW OF PUNAMBHAI. IT WAS ALSO STATED THAT THESE CHEQUES WERE GIVEN TO THE RELATIVES OF T HE DEPOSITORS BECAUSE IF THE CHEQUES 2 ITA NO. 1316-AHD-2011 WERE ISSUED IN FAVOUR OF THEIR FAMILY MEMBERS, THEI R RELATIVES MAY OR MAY NOT GIVE CHEQUES BACK TO THE ASSESSEE HAS DEPOSIT BECAUSE OF THE FAMILY ARRANGEMENT. THE AO DID NOT ACCEPT THIS EXPLANATION AND STATED THAT NO REAS ONABLE EXPLANATION HAS BEEN GIVEN FOR VIOLATING THE PROVISIONS OF SECTION 279T. THE AO, T HEREFORE, LEVIED THE PENALTY UNDER SECTION 271E OF THE I.T. ACT. 3. IN APPEAL AGAINST THE AFORESAID PENALTY ORDER, I T WAS CONTENDED THAT THE ASSESSEE HAS NOT ISSUED ANY CHEQUES BUT HAS MADE A TRANSFER ENTRY IN THE BOOKS OF ACCOUNT IN THE NAME OF THE RELATIVES OF THE EARLIER DEPOSITORS. IT WAS ALSO STATED THAT THERE WAS A REASONABLE CAUSE UNDER SECTION 273B AND THEREFORE, THE PENALTY SHOULD NOT BE LEVIED. 3.1 AFTER CONSIDERING THE AFORESAID SUBMISSIONS, TH E LD. CIT(A) CONFIRMED THE PENALTY FOR THE REASONS GIVEN IN PARA 4 OF THE IMPUGNED ORD ER, WHICH IS REPRODUCED HEREUNDER: 4 I HAVE CONSIDERED THE SUBMISSION MADE BY T HE APPELLANT AND OBSERVATION OF THE AO. THE EXPLANATION OF THE ASSESSEE IS TOTALLY UNACCEPTABLE AND WITHOUT ANY REASON. THE APPELLANT SAYS THAT THE DEPOSITORS WANT ED THE MONEY BACK. THE APPELLANT HAS FURTHER STATED THAT THE MONEY WAS TRA NSFERRED IN THE NAME OF THE RELATIVES OF THE DEPOSITOR BY BOOK ENTRY. IF THE DE POSITORS WANTED THE MONEY BACK WHERE IS THE QUESTION OF RETAINING THE MONEY IN THE NAME OF RELATIVES OF THE DEPOSITORS BYPASSING THE BOOK ENTRY. THE APPELLANT IS NOT COMING OUT WITH THE TRUTH. IF THE DEPOSITORS WANTED THE MONEY BACK THEN THERE IS NO QUESTION OF THE ASSESSEE BEING ABLE TO RETAIN THE MONEY BY SIMPLY P ASSING THE BOOK ENTRY IN THE NAME OF OTHER PERSONS RELATED OR NOT. THE APPELLANT HAS NOT BEEN ABLE TO CITE ANY REASONABLE CAUSE FOR VIOLATING THE PROVISIONS OF SE CTION 271E. IT IS ALSO NOT THE CASE OF SETTLING THE ACCOUNT BY WAY OF BOOK ENTRY W HERE SOME AMOUNT WAS DUE TO THE ASSESSEE AND SOME AMOUNT WAS DUE TO THE PARTY. THIS IS NOT SUCH A CASE. HENCE IN VIEW OF THE ABOVE THE PENALTY LEVIED IS CONFIRME D, THE GROUNDS OF APPEAL ARE DISMISSED. 4. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI DEEPAK SONI APPEARED AND POINTED OUT THAT NO CHEQUE WAS ISSUED BY THE ASSESSEE AND ONLY BOOK ENTRIES WERE MADE WHEREBY THERE WAS MERE CHANGE IN THE NAME AND AS MUCH AS DEPOSITS WERE TRANSFERRED FROM NAMES OF SHRI N.B.PATEL/ SHRI P.B. PATEL TO THE NAMES OF SMT. J.N.PATEL AND SMT. V.B.PATEL AND SMT. I.B. PATEL. IT WAS ALSO SUBMITTED THAT FUNDS WERE REMAINED WITH THE ASSESSEE AND THEREFORE, IN LAW AND UNDER T HE FACTS, THERE IS NO REPAYMENT. ON THIS 3 ITA NO. 1316-AHD-2011 BASIS, IT WAS CONTENDED THAT PENALTY LEVIED UNDER S ECTION 271E AMOUNTING TO RS. 3,90,879/- BE CANCELLED. AS AGAINST THIS, SHRI VINO D TANWANI, APPEARING ON BEHALF OF THE REVENUE, SUPPORTED THE ORDER OF THE LD. CIT(A). 5. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT NO PAYMENT BY ACCOUNT PAYEE CHEQUE HAS BEEN MADE BY THE ASSESSEE. ONLY GENERAL ENTRY HAS B EEN MADE BECAUSE OF FAMILY ARRANGEMENT. HENCE, I AM OF THE VIEW THAT THERE IS NO VIOLATION OF PROVISIONS CONTAINED IN SECTION 269T OF THE I.T. ACT, 1961. I, THEREFORE, C ANCEL THE PENALTY OF RS. 3,90,879/- LEVIED BY THE ADDITIONAL C.I.T., RANGE-2, AHMEDABAD. RESUL TANTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 .08.2011. SD/- (T.K. SHARMA) JUDICIAL MEMBER DATED : 17/08/2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S. 4 ITA NO. 1316-AHD-2011