Santpuria Alloys Pvt. Ltd., Giridih V. Additional CIT, Ranchi

ITA 142/RAN/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9585 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Assessee Lawyers: S K PODDARDEVESH PODDAR
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.142 /RAN/201 5 ASSESSMENT YEAR : 2006 - 2007 SANTPURIA ALLOYS PVT LTD., MANJHLADIH, GIRIDIH, - 815301 VS. ADDL. CIT, CENTRAL RANGE - 2, RANCHI PAN/GIR NO. AAICS 4215 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY: SHRI S.K.PODDAR/DEVESH PODDAR, ADV REVENUE BY : SHRI A.K.MOHANTY, JCIT DATE OF HEARING : 28 /05 / 201 8 DATE OF PRONOUNCEMENT : 30 /05/ 2018 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER OF THE CIT(A) - 3, PATNA DATED 24.9.2015 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.51,00,000/ - U/S.271D OF THE ACT MADE BY THE ASSESSING OFFICER. 2 ITA NO.142/RAN/2015 ASSESSMENT YEAR: 2006 - 2007 3. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE COMPANY IS PART OF MONGIA GROUP OF CASES, WHEREIN, SEARCH AND SEIZURE ACTION WAS CARRIED OUT ON 16.9.2009 AND ON SUBSEQUEN T DATES. SURVEY U/S.133A OF THE ACT WAS CONDUCTED IN THE FACTORY AND OFFICE PREMISES OF THE ASSESSEE COMPANY ALONGWITH THE GROUP CASE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE COMPANY RECEIVED SHARE APPLICATION MONEY FROM DIFFERENT PERSONS @ 10/ - P ER SHARE ALONGWITH PREMIUM AMOUNT OF RS.40/ - P ER PER SHARE. ALL THESE AMOUNTS WERE RECEIVED IN CASH TOTALLING RS.51,00,000/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED A COPY OF LEDGER IN WHICH IT IS REFLECTED THE CASH RECEIPTS FROM DIFFERENT COMPANIES EXCEEDING THE LIMITS PRESCRIBED U/S.269SS OF THE I.T.ACT, 1961. THEREFORE, THE ASSESSING OFFICER WAS OF THE OPINION THAT THERE HAS BEEN A VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT IN RESPECT OF TRANSACTION OF SHARE APPLI CATION MONEY AND, THEREFORE, RELYING ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BHALOTIA ENGINEERING WORKS PVT LTD., 275 ITR 399(JHAR) LEVIED PENALTY OF RS.51,00,000/ - BEING THE AMOUNT OF LOAN TAKEN IN CONTRAVENTION OF PROVIS IONS OF SECTION 269SS OF THE I.T.ACT, 196. 4. BEFORE THE CIT(A), THE ASSESEE HAS FILED A DISCLOSURE PETITION OF DIRECTOR OF THE ASSESSEE COMPANY, SHRI GUNWANT SINGH SALUJA, WHEREIN, AMOUNT OF RS.51,00,000/ - EQUIVALENT TO PENALTY U/S.271D HAS BEEN TAKEN AS ADDITIONAL UNDISCLOSED INCOME TO BUY PEACE AND TO AVOID LITIGATION. 3 ITA NO.142/RAN/2015 ASSESSMENT YEAR: 2006 - 2007 5. THE CIT(A) CONFIRMED THE LEVY OF PENALTY OF RS.51,00,000/ - U/S.271D OF THE ACT. HOWEVER, HE HELD THAT AS THE DIRECTOR OF THE ASSESSEE COMPANY HAS DISCLOSED THE INCOME OF RS.51,00,000/ - EQUIVALENT TO PENALTY AMOUNT , NECESSARY CREDIT WILL BE ALLOWED IN THE ASSESSMENT OF SHRI GUNWANT SINGH SALUJA IN HIS DISCLOSURE PETITION FOR THE ASSESSMENT YEAR 2006 - 07. 6. LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES WHEREAS LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY OF RS.51,00 ,000/ - U/S.271D ON THE GROUND THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS.51,00,000/ - IN CASH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT RELYING ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BHALOTIA ENGINEERING WORKS PVT LTD ., (SUPRA). 8. ON APPEAL, THE CIT(A) CONFIRMED THE LEVY OF PENALTY. 9. WE FIND THAT THERE IS NO DISPUTE TO THE FACTS THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION IN CASH IN CONTRAVENTION OF PROVISI ONS OF SECTION 269SS OF THE ACT. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BHALOTIA ENGINEERING WORKS PVT LTD., (SUPRA) , WHEREIN, IT HAS BEEN HELD THAT SECTION 269SS OF THE 4 ITA NO.142/RAN/2015 ASSESSMENT YEAR: 2006 - 2007 INCOME TAX ACT, 1961 WAS INS ERTED WITH A VIEW TO PREVENT TRANSACTIONS IN BLACK MONEY AND TO ENSURE THAT PAYMENTS OF RS. 20.000/ - AND ABOVE, ARE TRACEABLE TO TRANSACTIONS THROUGH A BANK. IF THE MISCHIEF THAT IS SOUGHT TO BE AVERTED IS KEPT IN MIND, IT WILL BE APPROPRIATE TO HOLD THAT ANY PAYMENT OF RS. 20,000/ - OR ABOVE, MADE TO A COMPANY AS SHARE APPLICATION MONEY, SHOULD BE AS PROVIDED IN SECTION 269SS OF THE ACT . EVEN IF SHARE APPLICATION MONEY CANNOT BE CONSIDERED TO BE A L OAN WITHIN THE MEANING OF SECTION 269SS OF THE ACT, IT PARTAKES THE CHARACTER OF A DEPOSIT, SINCE IT IS REPAYABLE IN SPECIE ON REFUSAL TO ALLOT SHARES AND IS REPAYABLE IF RECALLED BY THE APPLICANT, BEFOR E ALLOTMENT OF SHARES AND THE CONCLUSION OF THE CONTRACT. HENCE, ACCEPTANCE OF SHARE APPLICATION MONEY IN CASH AMOUNTING TO RS.20,000/ - OR MORE VIOLATES THE PROVISIONS OF SECTION 269SS OF THE ACT. WE, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 3 0 /05 /201 8 S D / - S D / - (PAVAN KUMAR GADALE) (N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RANCHI; DATED 3 0 /05 /201 8 B.K.PARIDA, SPS 5 ITA NO.142/RAN/2015 ASSESSMENT YEAR: 2006 - 2007 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : SANTPURIA ALLOYS PVT LTD., MANJHLADIH, GIRIDIH, - 815301 2. THE RESPONDENT: ADDL. CIT, CENTRAL RANGE - 2, RANCHI 3. THE CIT(A), 3, PATNA 4. PR. CIT , (CENT), PARTNA 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//