The ITO, Ward-9(4), Ahmedabad V. Shri Dipak Ambalal Shah, Ahmedabad

ITA 1343/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1509 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI S.K. YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NOS: 1342 & 1343/AHD/2013 (ASSESSMENT YEAR: 2008-09) INCOMETAX OFFICER, WARD-9(4), AHMEDABAD V/S SHRI DIPAK AMBALAL SHAH, A-301, BAGESHRI COMPLEX, OPP: FUN REPUBLIC CINEMA SATELLITE, AHMEDABAD-380- 15 (APPELLANT) (RESPONDENT) PAN: AJQPS4139K APPELLANT BY : SHRI RAJDEEP SINGH, SR. D. R. RESPONDENT BY : SHRI S.N. DIVETIA, A.R. ( )/ ORDER DATE OF HEARING : 30 -05-201 6 DATE OF PRONOUNCEMENT : 31 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO DIFFERENT ORDERS OF THE LD. CIT(A)-XV, AHMEDABAD DATED 27.02. 2013 PERTAINING TO A.Y. 2008-09. ITA NO. 1342 & 1343/AHD/2013 . A.Y. 2008-09 2 2. ITA NO. 1342/AHD/2013 IS AGAINST LEVY OF PENALTY U/ S. 271D OF THE ACT AND ITA NO. 1343/AHD/2013 IS AGAINST THE LEVY OF PE NALTY U/S. 271E OF THE ACT AMOUNT TO RS. 16,26,483/- AND RS. 14,72,342 /- RESPECTIVELY. 3. FACTS UNDERLYING IN BOTH THESE APPEALS ARE IDENTICA L, THEREFORE, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDING S FOR THE YEAR UNDER CONSIDERATION, THE A.O. OBSERVED THAT THE ASS ESSEE HAS ACCEPTED LOANS IN CASH AND HAS ALSO REPAID LOANS IN CASH IN CONTRAVENTION TO SECTION 269SS AND 269T OF THE ACT. THE FACTUAL MATR IX IS AS PER THE FOLLOWING CHART:- SR. NO. NAME OF THE PARTY LOAN TAKEN/ACCEPTED IN CASH RS. LOAN/DEPOSIT REPAID IN CASH RS. 1 RUJAL SHAH 25,000/- 30,000/- 2 SADHANA D. SHAH 1,20,000/- 8,00,000/- 3 PLANETS AVIATION PVT. LTD. 12,21,483/- 3,45,023/ - 4 VEER FOREX MANAGEMENT SERV. PVT. LTD. 2,60,000/- 2,97,319/- TOTAL RS. 16,26,483/- RS. 14,72,342 /- 5. THE A.O. WAS OF THE FIRM BELIEF THAT THE ASSESSEE H AS VIOLATED THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT AND , THEREFORE, LIABLE FOR PENALTY U/S. 271D AND 271E OF THE ACT. 6. AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE A SSESSEE, PENALTY WAS LEVIED U/S. 271D FOR RS. 16,26,483/- AND U/S. 2 71E FOR RS. 14,72,342/-. ITA NO. 1342 & 1343/AHD/2013 . A.Y. 2008-09 3 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND EXPLAINED THE URGENCY, NECESSITY AND REASONABLE CAUSE FOR THE IMPUGNED TRANSACTION IN CASH. THE LD. CIT(A) WAS CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND DELETED THE RESPECTIVE PENALTIE S. 8. THE REVENUE IS BEFORE US AGAINST THE SAID DE LETION OF THE PENALTIES. THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN S TATED BEFORE THE LOWER AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED T HE FACTUAL MATRIX AS DISCUSSED AT LENGTH BY THE FIRST APPELLATE AUTHORIT Y. THERE IS NO DISPUTE THAT THE FAMILY GROUP BUSINESS OF THE ASSES SEE RELATED TO INTERNATIONAL TICKETING, VISA CONSULTANCY, ARRANGEM ENT OF FOREIGN EXCHANGE AND THE NATURE OF THE BUSINESS IS SUCH THA T BECOMES EXPEDIENT AND NECESSARY TO ARRANGE FUND ON INSTANT CALL FROM THE CLIENTS SO AS TO EARN COMMISSION NOT ONLY FROM THE CLIENTS BUT ALSO FROM THE HOTELS/AIRLINES. 10. THUS, IT CAN BE SAFELY CONCLUDED THAT THE IMPUGNED TRANSACTION IN CASH WERE FOR THE FURTHERANCE OF SMOOTH FUNCTION ING OF THE BUSINESS. 11. THE HONBLE SUPREME COURT IN THE CASE OF KUMARI A B . SHANTHI 255 ITR 258 HAS EXPLAINED THE OBJECT OF INTRODUCING THE SECTION 269SS AND WHICH READS AS UNDER:- 'THE OBJECT OF INTRODUCING SECTION 269SS IS TO ENSU RE THAT A TAXPAYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACC OUNTED MONEY OR IF HE HAS GIVEN SOME FALSE ENTRIES IN HIS ACCOUNTS I.E. S HALL NOT ESCAPE BY GIVING ITA NO. 1342 & 1343/AHD/2013 . A.Y. 2008-09 4 FALSE EXPLANATION FOR THE SAME. DURING SEARCH AND S EIZURES UNACCOUNTED MONEY IS UNEARTHED AND THE TAXPAYER WOULD USUALLY G IVE THE EXPLANATION THAT HE HAD BORROWED OR RECEIVED DEPOSITS FROM HIS RELATIVES OR FRIENDS AND IT IS EASY FOR THE SO-CALLED LENDER ALSO TO MANIPUL ATE HIS RECORDS LATER TO SUIT THE PLEA OF THE TAXPAYER THE MAIN OBJECT OF SE CTION 269SS WAS TO CURB THIS MENACE . AS REGARDS THE TAX LEGISLATIONS, IT I S A POLICY MATTER AND IT IS FOR PARLIAMENT TO DECIDE IN WHICH MANNER THE LEGISL ATION SHOULD BE MADE. OF COURSE, IT SHOULD STAND THE TEST OF CONSTITUTION AL VALIDITY. THE OBJECT SOUGHT TO BE ACHIEVED WAS TO ERADICATE THE EVIL PRA CTICE OF MAKING OF FALSE ENTRIES IN THE ACCOUNT BOOKS AND LATER GIVING EXPLA NATION FOR THE SAME.' 12. SIMILAR VIEW WAS EXPRESSED BY THE HONBLE JURISDICT IONAL HIGH COURT OF GUJARAT IN THE CASE OF BHAWATIPRASAD BAJOR IA (HUF) 263 ITR 487 IN WHICH THE HONBLE HIGH COURT OBSERVED THAT T HE OBJECT OF INTRODUCING SECTION 269SS IS TO ENSURE THAT A TAX P AYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY , OR IF HE HAS GIVEN SOME FALSE ENTRY IN HIS ACCOUNTS HE SHALL NOT ESCAP E BY GIVING FALSE EXPLANATION FOR THE SAME. 13. A PERUSAL OF THE PENALTY ORDER CLEARLY SHOWS THAT N OWHERE THE A.O. HAS DOUBTED THE GENUINENESS OF THE TRANSACTION . MOREOVER, THE FIRST APPELLATE AUTHORITY HAS GIVEN A CATEGORICAL F INDING AFTER PERUSING THE LEDGER ACCOUNTS OF THE RESPECTIVE PARTIES THAT THE ACCOUNTS ARE NOTHING BUT EXHIBITING REGULAR BUSINESS TRANSACTION AS CURRENT ACCOUNTS. NO INTEREST HAS BEEN PAID ON THE BORROWIN GS. 14. SINCE THE TRANSACTIONS ARE MORE OR LESS BUSINESS TR ANSACTION, THEREFORE, WE DO NOT FIND ANY REASON FOR THE LEVY O F IMPUGNED PENALTIES AND IN THE LIGHT OF THE OBSERVATIONS OF T HE HONBLE SUPREME COURT AND THE JURISDICTIONAL HIGH COURT (SUPRA), WE DECLINE TO INTERFERE ITA NO. 1342 & 1343/AHD/2013 . A.Y. 2008-09 5 WITH THE FINDINGS OF THE LD. CIT(A); BOTH THESE APP EALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 05 - 20 16. SD/- SD/- (S.K. YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD