Income Tax Officer, V. M/s Nirman Construction,

ITA 137/RAN/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85465 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-04-2014
• Court: TRIBUNAL
• Assessee Lawyers: A K MUKHOPADHYAY CA LD
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO . 137/RAN/2014 A.Y 200 8 - 09 INCOME - TAX OFFICER, W 2(2),RANCHI VS. M/S. NIRMAN CONSTRUCTION [ APPELLANT ] [ RESPONDENT ] FOR THE APPELLANT/DEPARTMENT : SHRI DEEPAK ROSHAN, SENIOR S.C/LD.DR M.K. CHOUDHARY, ADVOCATES, LD.ARS FOR THE RESPONDENT /ASSESSEE : SHRI A.K MUKHOPADHYAY, CA, LD.AR DATE OF HEARING : 0 3 - 12 - 2014 DATE OF PRONOUNCEMENT: 0 3 - 12 - 2014 ORDER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : TH IS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 2 4 - 02 - 2014 PASSED BY THE LD.CIT(A), RANCHI JHARKHAND AND IT RELATES TO ASSESSMENT YEAR 2007 - 08. 2. THE REVENUE IS AGG RIEVED BY THE DECISION OF THE LD.CIT(A) IN DELETING HE PENALTY OF RS.36,96,300/ - LEVIED BY THE ADDL.CIT U/S. 271D OF THE ACT. 3. THE FACTS LEADING TO LEVY O F PENALTY ARE STATED IN BRIEF. THE ASSESSEE IS AN ASSOCIATION OF PERSON (AOP) AND ENGAGED IN TH E BUSINESS OF BUILDING CONSTRUCTION ACTIVITIES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED CASH OF RS.36,93,300/ - OUT OF TOTAL BOOKING AMOUNT OF RS.1.07 CRORE. THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE HAS VIOLATED THE PROV ISIONS OF SECTION 269SS OF THE ACT BY ACCEPTING THE BOOKING AMOUNT IN CASH. ACCORDINGLY, HE REFERRED THE MATTER TO THE ADDL.CIT. ACCORDINGLY, PENALTY PROCEEDINGS U/S. 271D OF THE ACT W A S INITIATED BY THE ADDL.CIT . AFTER HEARING THE ASSESSEE, THE ADDL.CIT TOOK THE VIEW THAT THE ASSESSEE HAS NOT PROVED THE URGENCY FOR TAKING MONEY IN CASH. ACCORDINGLY, HE HELD 2 ITA NO .137/RAN/2014 M/S. NIRMAN CONSTRUCTION THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT. ACCORDINGLY, HE IMPOSED A PENALTY OF RS.36,93,300/ - . 4. IN THE APPELLAT E PROCEEDINGS THE LD.CIT(A) NOTICED THAT THE ASSESSEE HAS RECEIVED ONLY BOOK ING INSTALLMENT TOWARDS SALE OF FLATS . FURTHER, THE ASSESSEE HAS ALSO DECLARED THE SAID RECEIPT AS SALES IN THE P & L ACCOUNT. ACCORDINGLY, HE HELD THAT CASH RECEIVED TOWARDS SAL E OF FLAT CANNOT BE CONSIDERED AS LOAN/DEPOSIT MENTIONED IN SECTION 269SS OF THE ACT. THE LD. CIT(A) ALSO OBSERVED THAT THE REQUIREMENT OF GIVING REASONABLE EXPLANATION IN TERMS OF SECTION 273B SHALL APPLY ONLY IF THE PROVISIONS OF SECTION 269SS IS VI OLATED. SINCE THE AMOUNT TAKEN BY THE ASSESSEE AGAINST SALE OF FLATS COULD NOT BE CONSIDERED AS LOAN/DEPOSIT, THE LD.CIT(A) DELETED THE PENALTY BY HOLDING THE PROVISIONS OF SECTION ARE NOT APPLICABLE. THE LD.CIT(A) ALSO TOOK SUPPORT FROM THE DECISION REN DERED BY THE JAIPUR BENCH OF ITAT IN THE CASE LADDU LAL GHEESA LAL, HUF VS. D.I.T IN ITA NO.953/JP/2011 A.Y 2007 - 08 DATED 02 - 02 - 2012. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY, WE NOTI CE THAT THE ASSESSEE HAS RECEIVE D SALE CONSIDERATION PERTAINING TO FLATS BY WAY OF CASH. WE AGREE WITH THE OBSERVATION OF THE LD.CIT(A) THAT SALE CONSIDERATION RECEIVED BY THE ASSESSEE CANNOT BE CONSIDERED AS LOAN OR DEPOSIT FALLING UNDER THE PURVIEW OF SECTION 269SS OF THE ACT. HENCE, IN OUR VIEW THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT THERE WAS NO NECESSARY FOR THE ASSESSEE TO ESTABLISH REASONABLE CAUSE IN RECEIVING INSTALLMENTS IN CASH ON SALE CONSIDERATION. FURTHER, THE LD.CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS DISCLOSED THE AMOUNT RECEIVED BY IT AS INCOME. UNDER THE SET OF FACTS, WE ARE OF THE VIEW THAT THE LD.CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S. 271D OF THE ACT. ACCORDINGLY, WE UPHOLD THE SAME. 3 ITA NO .137/RAN/2014 M/S. NIRMAN CONSTRUCTION 6. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 0 3 - 12 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. B ASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 0 3 - 12 - 2014 PLACE : RANCHI PP, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : 2 THE RESPONDENT: 3. .THE CIT, 4.THE CIT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GU ARD FILE. TRUE COPY, BY ORDER, ASSTT. REGISTRAR 4 ITA NO .137/RAN/2014 M/S. NIRMAN CONSTRUCTION 1. DATE OF DICTATION ............. 03 - 12= - 2014 . ORDER MODIFIED BY THE MEMBER IN HIS LAPTOP ........ DICTATION TAKEN .............. 2. DATE ON WHICH THE TYPED DRAFT I S PLACED BEFORE THE DICTATING MEMBER ........................OTHER MEMBER ............................... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING ME MBER FOR PRONOUNCEMENT.................................. 0 3 - 12 - 2014 ................................................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ........ ............................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ............................................ ..................................................... 9. DATE OF DESPATCH OF THE ORDER ..............................................................