ACIT, New Delhi V. M/s Vikon Engineers Pvt. Ltd., New Delhi

ITA 1345/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82157 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 25-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P CHANDRAKAR
• Keywords: Opportunity of being heard; Question of law
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI C.M. GARG, JUDICIAL MEMBER ITA NO. 1345/DEL/2013 ASSESSMENT YEARS: 2008-09 ACIT, VS. VIKON ENGINEERS PVT. LTD., CENT. CIRCLE 5, 8, RINGH ROAD, NEW DELHI. LAJPAT NAGAR, NEW DELHI. AABCV7701K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJIV SAXENA, ADV. & MS. SU MANGLA SAXENA, ADV. RESPONDENT BY : SH. J.P. CHANDRA KAR, SR. DR ORDER PER SHAMIM YAHYA, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) DATED 24.12.2012 AND PERTAINS TO THE A.Y. 20 08-09. 2. THE GROUNDS OF APPEAL READ AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN THE FACTS IN DELETING THE PENALTY LEVIED AMOUNTING TO RS. 13,11,320/- U/S 271D OF THE I.T. ACT IN CONTRAVENTI ON OF THE PROVISIONS OF SECTION 269SS OF I.T. ACT, 1961. 3. IN THIS CASE THE ADDL. CIT HAD IMPOSED PENALTY U /S 271D AS DURING THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED THAT THE ASSESSEE HAD RECEIVED RS. 13,11,320/- OTHERWISE THAN BY AN ACCOU NT PAYEE CHEQUE FROM M/S GLOBAL HERITAGE VENTURE LTD. IN CONTRAVENTION O F THE PROVISION U/S 269SS OF THE I.T. ACT. IN THE AUDIT REPORT U/S 44A B AT ANNEXURE-2, THE AUDITORS HAD LISTED THE SAID AMOUNT AS HAVING BEEN RECEIVED OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE. THE APPELLANT HAD STAT ED BEFORE THE AO AND THE ACIT THAT THIS WAS NOT A CASH OR CHEQUE RECEIPT BY THE ASSESSEE FROM THE SAID COMPANY. INSTEAD THIS WAS THE WORK CONTRA CT TAX PAID ON BEHALF OF THE ASSESSEE COMPANY BY THE GROUP CONCERN FOR WH ICH CONTRA ENTRIES ITA NO. 1345/D/2013 M/S VIKON ENGINEERS PVT. LTD. 2 HAVE BEEN PASSED IN THE ASSESSEES BOOKS. THE AO A ND THE ADDL. CIT DID NOT ACCEPT THE SUBMISSION AND LEVIED PENALTY U/S 27 1D. UPON ASSESSEES APPEAL LD. CIT(A) GAVE A FINDING THAT THE SAID AMOU NT WAS IN FACT A MERE CONTRA ENTRY AND NOT ACTUAL RECEIPT OF ANY CASH OR NON ACCOUNT PAYEE CHEQUE. LD. CIT(APPEALS) DETAILED FINDING IN THIS REGARD ARE AS UNDER: I. IN THE BOOKS OF NARSI CREATIONS, AGAIN A GROUP CON CERN, A DEBIT ENTRY HAS BEEN PASSED ON 18/04/2006 IN THE AC COUNT OF KRISHAN BUILDWELL AND DEVELOPERS PVT. LTD. (NOW GLO BAL HERITAGE VENTURE LTD.) FOR RS. 30,92,850/-. THE NA RRATION THERE IN IS CREDIT ABN AMRO BANK 959533-CHEQUE NO. 909820 /18406 FOR PAY ORDER FAVOURING ASSESSING AUTHORITY GURGAON FOR WORKS CONTRACT TAX UPTO MARCH, 2006. II. THE NEXT CONTRA ENTRY IS MADE IN THE BOOKS OF KRISH NA BUILDWELL AND DEVELOPER P. LTD. (NOW GLOBAL HERITAGE VENTURE LTD.). IN THESE BOOKS, THE WORK CONTRACT TAX PAYABLE ACCOUNT HAS BEEN DEBITED WITH RS. 30,92,850/- AND GIVEN CREDIT TO NA RSI CREATIONS. THE NARRATION STATES BEING THE AMOUNT PAID BY NARSI CREATIONS VIDE CHEQUE NO. 909820 THROUGH PAID ORDER IN FAVOUR OF ASSESSING AUTHORITY GURGAON TOWARDS WORK CONTRACT TAX PAYABLE UPTO MARCH 2006. IN THE SAME WORK CON TRACT TAX PAYABLE A/C A DEBIT ENTRY HAS BEEN PASSED IN THE NA ME OF VIKON ENGINEERS PVT. LTD. FOR RS. 13,11,320/- WITH THE NA RRATION BEING AMOUNT OF WORK CONTRACT TAX OF VIKON ENGINEE RS PVT. LTD. PAID ON YOUR BEHALF. III. THE ABN AMRO BANK ACCOUNT OF NARSI CREATIONS CLEARL Y DEPICTS THE PURCHASE OF DD/CC ISSUED ON 19/04/2006 FOR RS. 30,92,850/-. THERE IS ALSO REFERENCE TO CHEQUE NO. 909820. IV. THE ABOVE FACTS INDICATE THAT THERE WAS NO VIOLATIO N OF PROVISIONS OF SECTION 269SS. THE WORK CONTRACT TAX LIABILITY OF THE ASSESSEE WAS BY ONE OF THE GROUP CONCERNS BY WA Y OF PAYMENT THROUGH PAY ORDER ISSUED FROM THE BANK ACCO UNT. THE ASSESSEE MERELY PASSED A CONTRA ENTRY CREDITING THE SAID PARTY. THE AO WAS ALSO GIVEN AN OPPORTUNITY OF BEING HEARD ON 11.12.2012 TO WHOM THE COPIES OF THE LEDGER ACCOUNT S HAVE ALSO BEEN MADE AVAILABLE AND THE MATTER HAS BEEN DISCUSS ED WITH HIM. 4. IN LIGHT OF HIS ABOVE SAID FINDING LD. CIT(A) HE LD THAT THERE WAS NO CASE FOR LEVYING PENALTY U/S 271D AND HENCE THE SAM E WAS DELETED. 5. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BE FORE US. ITA NO. 1345/D/2013 M/S VIKON ENGINEERS PVT. LTD. 3 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORD. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO. HE SUBMITTED THAT THE AMOUNTS INVOLVED HAVE NOT BEEN PAID BY THE CHEQUE OR DRAFT. HENCE HE SUBMITTED THAT PROVISIONS OF SECTION 269SS ARE ATTRACTED. HENCE HE ARGUED THAT LEVY OF PENALTY U/S 271D WAS PERFECT LY JUSTIFIED. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE SUBMITTED T HAT THE AMOUNT INVOLVED IS A MERE JOURNAL ENTRY. HE SUBMITTED THAT A GROUP CONCERN HAS PAID BY CHEQUE THE AMOUNT PAYABLE TO GOVERNMENT ON ACCOUNT OF WORKS CONTRACT TAX ON BEHALF OF THE ASSESSEE COMPANY. HENCE HE SU BMITTED THAT FIRSTLY NO CHEQUE OR CASH PAYMENT HAS BEEN DONE, SECONDLY, THE PAYMENT HAS BEEN MADE BY CHEQUE BY A GROUP CONCERN ON ACCOUNT OF WOR KS CONTRACT TAX DEPOSITED WITH GOVERNMENT. HE SUBMITTED THAT SUCH PAYMENTS EVEN IF MADE IN CASH ARE EXEMPTED FROM THE PROVISIONS OF SE CTION 269SS AS PER THE PROVISO THEREIN. LD. COUNSEL FURTHER REFERRED TO THE SEVERAL CASE LAWS ON THE PROPOSITION THAT 269SS IS NOT ATTRACTED TOWA RDS PAYMENT THROUGH JOURNAL ENTRIES. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. U PON CAREFUL CONSIDERATION, WE NOTE THAT THE SUM OF RS. 13,11,32 0/- WAS PAID ON BEHALF OF THE ASSESSEE COMPANY BY A GROUP CONCERN THROUGH CHEQUE. THE PAYMENT WAS ON ACCOUNT OF WORKS CONTRACT TAX PAID T O GOVERNMENT ACCOUNT. THESE ARE THE UNDISPUTED FACTS OF THE CAS E. NO CASE HAS BEEN MADE OUT THAT THE PAYMENT WAS NOT MADE BY THE GROUP CONCERN THROUGH CHEQUE. IT IS ALSO NOT THE CASE OF THE AO THAT PAY MENT WAS NOT ON ACCOUNT OF WORKS CONTRACT TAX PAID TO THE GOVERNMENT. WHEN THESE FACTS ARE CONSIDERED IT IS CLEAR THAT ASSESSEE HAS NOT ACCEPT ED FROM ANY PERSON ANY CASH LOAN OR DEPOSIT IN VIOLATION OF SECTION 269SS. THE CREDIT RECEIVED BY THE ASSESSEE COMPANY WAS THROUGH JOURNAL ENTRY FROM A GROUP CONCERN. THE GROUP CONCERN HAD MADE PAYMENT ON BEHALF OF THE ASSESSEE COMPANY BY CHEQUE ON ACCOUNT OF WORKS CONTRACT TAX DEPOSITE D TO GOVERNMENT. IN ITA NO. 1345/D/2013 M/S VIKON ENGINEERS PVT. LTD. 4 THIS VIEW OF THE MATTER, IN OUR CONSIDERED OPINION THERE IS NO VIOLATION OF SECTION 269SS. IN THIS REGARD WE ALSO PLACED RELIA NCE TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOI DA TOLL BRIDGE COMPANY LTD., 262 ITR 260. IN THIS CASE THE HONBLE JURISD ICTIONAL HIGH COURT HAS OBSERVED AS UNDER: 5. AGGRIEVED, THE ASSESSED PREFERRED APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS) BUT WITHOUT AN Y SUCCESS. THE ASSESSED CARRIED THE MATTER IN FURTHER APPEAL T O THE TRIBUNAL. BY THE IMPUGNED ORDER, THE TRIBUNAL HAD DELETED THE SAID PENALTY. WHILE HOLDING THAT THE PROVISIONS OF SECT ION 269SS OF THE ACT WERE NOT ATTRACTED, THE TRIBUNAL HAS NOTICED THAT: (I) IN THE INSTANT CASE, THE TRANSACTION WAS BY AN ACCOUNT PAYEE CHEQUE, (II) NO PAYMENT ON ACCOUNT WAS MADE IN CASH EITHER BY THE ASSESSED OR ON ITS BEHALF, (III) NO LOAN WAS ACCEPTED BY THE ASSESSEE IN CASH, AND (IV) THE PAYMENT OF RS. 4.85 CRORES MADE BY THE ASSESSED THROUGH IL & FS, WHICH HOLDS MORE THAN 309 PER CENT OF THE PAID-UP CAPITAL OF THE ASSESSED, BY JOURNAL ENTRY IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BY CREDITING THE ACCOUNT OF IL & FS. 6. HAVING REGARD TO THE AFORENOTED FINDINGS, WHICH ARE ESSENTIALLY FINDINGS OF FACT, WE ARE IN COMPLETE AG REEMENT WITH THE TRIBUNAL THAT THE PROVISIONS OF SECTION 269SS W ERE NOT ATTRACTED ON THE FACTS OF THE CASE. ADMITTEDLY, NE ITHER THE ASSESSED NOR IL &FS HAD MADE ANY PAYMENT IN CASH. THE ORDER OF THE TRIBUNAL DOES NOT GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW. 7. WE ACCORDINGLY DECLINE TO ENTERTAIN THE APPEAL, DISMISSED . 8. WHEN WE EXAMINE THE PRESENT CASE ON THE ANVIL OF AFORESAID CASE LAW FROM HONBLE JURISDICTIONAL HIGH COURT, WE FIND THAT FACTS ARE SIMILAR. HENCE, IN THE BACKGROUND OF AFORESAID DISCUSSIONS A ND PRECEDENT IN OUR CONSIDERED OPINION THERE IS NO INFIRMITY IN THE ORD ER OF LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 9. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/11/2014 SD/- SD/- (C.M. GARG) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25/11/2014 ITA NO. 1345/D/2013 M/S VIKON ENGINEERS PVT. LTD. 5 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR