Sri. NARAYAN GOWDA, MUMBAI V. JT. CIT CIR. - 21(3), MUMBAI

ITA 1356/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1472 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S RAWAL
• Assessee Lawyers: BEHARILAL
• Keywords: Principle of natural justice
• Section: 133A; 271D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 1356/MUM/2007 (ASSESSMENT YEAR: 2005-06) NARAYAN GOWDA M/S K M KAPADIA AND ASSOCIATES, SHOP NO.49, 1 ST FL. ASHOKA SHOPPING CENTRE, LOKMANYA TILAK ROAD MUMBAI-400001 PAN: AABHN3686A .APPELLANT V/S JCIT CIR-21(3), C-11, 5 TH FL, PRATYAKSHAKAR BHAVAN, BKC BANDRA (E) MUMBAI-400051 RESPONDENT APPELLANT BY : SHRI BEHARILAL, AD VOCATE RESPONDENT BY : SHRI R S RAWAL O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 15.01.2007 OF CIT(A)-XXI, MUMBAI ARISI NG FROM THE PENALTY ORDER PASSED UNDER SECTION 271D OF THE ACT FOR THE ASSESSMENT YEAR 2005-06. ITA NO. 1356/MUM/2007 (ASSESSMENT YEAR: 2005-06) 2 2 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN T HIS APPEAL: PENALTY OF RS.10,00,000/- LEVIED U/S 271D OF THE INCOME TAX ACT, 1961 ON THE APPELLANT BE DROPPED AS THE SAME IS BAD IN LAW AND ON FACTS AND AGAINST THE LAW OF NATURAL JUSTICE 3. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAN ED DR AND CONSIDERED THE RELEVANT RECORD. A SURVEY ACTI ON U/S 133A WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PR EMISES OF THE ASSESSEE ON 25.10.2005. DURING THE COURSE OF SURVEY, APART FROM OTHER PAPERS A DOCUMENT ON LETTER PAD OF M/S SAI SHAKTI DEVELOPERS AND BUILDERS PVT LTD DATED 25.9.2 004 WAS IMPOUNDED WHICH READS AS UNDER : I NARAYAN GOWDA (DIRECTOR) OF SAI SHAKTI DEVELOPERS AND BUILDERS (P) LTD RECEIVED CASH RS.10 LAKHS (TEN LAKHS) ON 25.9.2004 FROM MR.SUBHASH R AGARWAL ON ABOVE SAID DATE. AND AGAINST THIS AMOUNT I AM GIVING TWO CHEQUES NO. (I) 407591 RS.5 LAKHS AND (II) 407592 RS.5 LAKH. AND THIS AMOUNT IS RETURN WITHIN 3 MONTHS FOR SAI SHAKTI DEVELOPERS AND BUILDERS (PVT) LTD (SD/- DIRECTOR 4. THE AO INITIATED PENALTY PROCEEDINGS U/S 271D FO R ACCEPTING CASH LOAN OF RS.10 LAKHS AND VIOLATIONS OF THE PROVISIONS OF SECTION 269SS OF THE ACT AND CONSEQUE NTLY A PENALTY OF RS.10 LAKHS WAS IMPOSED. ITA NO. 1356/MUM/2007 (ASSESSMENT YEAR: 2005-06) 3 5. ON APPEAL, THE CIT(A) HAS CONFIRMED THE PENALTY IMPOSED BY THE AO. 6. WE HAVE HEARD THE LD. AR AND LD. DR AND CONSIDER ED THE RELEVANT RECORD. AS IT IS EVIDENT FROM THE IMPOUNDE D DOCUMENTS THAT THE SAID DOCUMENT WAS ON THE LETTER PAD M/S SAI SHAKTI DEVELOPERS AND BUILDERS (P) LTD AND THE LANGUAGE OF THE DOCUMENTS ALSO SUGGESTS WITHOUT ANY AMBIGUIT Y THAT THE ALLEGED CASH OF RS.10 LAKHS WAS RECEIVED BY THE ASS ESSEE IN THE CAPACITY OF THE DIRECTOR AND ON BEHALF OF M/S SAI SHAKTI DEVELOPERS AND BUILDERS (P) LTD. FURTHER TWO CH EQUES NO. 407591 AND 407592 OF RS.5 LAKHS EACH WERE GIVEN AS SECURITY WERE ALSO BELONGS TO M/S SAI SHAKTI DEVELOPERS AN D BUILDERS (P) LTD. THEREFORE, IT IS MANIFEST FROM THE RECORD THAT THE ALLEGED LOAN IN CASH, IF ANY, THE SAME WAS RECE IVED BY M/S SAI SHAKTI DEVELOPERS AND BUILDERS (P) LTD AND THE ASSESSEE HAS SIGNED THE IMPOUNDED DOCUMENTS ONLY IN THE CAP ACITY OF DIRECTOR OF M/S SAI SHAKTI DEVELOPERS AND BUILDERS (P) LTD AND NOT IN HIS PERSONAL CAPACITY. 7. IN VIEW OF THE ABOVE FACTS, WE FIND THAT THE IMP OSITION OF PENALTY U/S 271D ON THE ASSESSEE IN PERSON IS IMPR OPER AND ILLEGAL. THE SAME IS LIABLE TO BE DELETED. ACCORD INGLY, WE DELETE THE PENALTY LEVIED U/S 271D. ITA NO. 1356/MUM/2007 (ASSESSMENT YEAR: 2005-06) 4 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 18.06.2010 SD SD (P.M.JAGTAP) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMB ER MUMBAI, DATED 18TH JUNE 2010 SRL:4610 COPY TO: 1. NARAYAN GOWDA M/S K M KAPADIA AND ASSOCIATES, SHOP NO.49, 1 ST FL. ASHOKA SHOPPING CENTRE, LOKMANYA TILAK ROAD MUMBAI-400001 PAN: AABHN3686A 2.JCIT CIR-21(3), C-11, 5 TH FL, PRATYAKSHAKAR BHAVAN, BKC BANDRA (E) MUMBAI-400051 3 CIT CITY-21, MUMBAI. 4.JCIT 21(3), MUMBAI 5 CIT(A)-XXI, MUMBAI. 6. DR B BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO. 1356/MUM/2007 (ASSESSMENT YEAR: 2005-06) 5