S.Vasundara Devi, Coimbatore V. JCIT, Coimbatore

ITA 1520/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8980 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LAKSHMINARAYANAN
• Assessee Lawyers: A S SRIRAMAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1520/MDS/2015 / ASSESSMENT YEAR : 2009-10 SMT. S VASUNDARA DEVI 2/171, KUMUDHAM NAGAR VILLANKURICHI ROAD COIMBATORE 641 035 VS. THE JT. COMMI SSIONER OF INCOME TAX RANGE II COIMBATORE [PAN ABGPV 3470 H] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI A.S SRIRAMAN, ADVOCATE /RESPONDENT BY : SHRI LAKSHMINARAYANAN, JCIT / DATE OF HEARING : 23 - 05 - 2016 ! / DATE OF PRONOUNCEMENT : 23 - 0 6 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, COIMBA TORE, DATED 7.5.2015 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. SHRI A.S SRIRAMAN, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ASSESSEE IS A MEMBER OF M. SUBRAMANIAM(HU F). THE OTHER MEMBERS OF THE HUF ARE HER HUSBAND SHRI M. SUBRAMAN IAM AND HER SON. THE HUF SOLD A PROPERTY. THE ASSESSEE HAS R ECEIVED A LOAN OF ` ITA NO. 1520/15 :- 2 -: 6,50,000/- FROM HUF IN CASH. THE ASSESSING OFFICER LEVIED PENALTY U/S 271D OF THE ACT FOR RECEIVING LOAN IN CASH. PLAC ING RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF M. YESODHA, 351 ITR 265, THE LD. COUNSEL SUBMITTED THAT WHEN THE TRANSA CTION WAS BETWEEN HUSBAND AND WIFE, THE PROVISIONS OF SEC. 271D MAY N OT BE APPLICABLE. THE LD. COUNSEL FURTHER SUBMITTED THAT THE GENUINEN ESS OF THE TRANSACTION BETWEEN HUSBAND AND WIFE CANNOT BE A CA USE FOR LEVY OF PENALTY. THE LD. COUNSEL HAS PLACED HIS RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN I.T.A. NO. 707/MDS/2015 FOR ASSESSMENT YEAR 2009-10 DATED 28.10.2015. 3. ON THE CONTRARY, SHRI LAKSHMINARAYANAN, LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT LOAN WAS BORROWED FROM M. SU BRAMANIAMIHUF). UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961, H UF IS A SEPARATE AND INDEPENDENT UNIT FOR ASSESSMENT. THE ASSESSEE IS ASSESSABLE SEPARATELY AS INDIVIDUAL. WHEN THERE WAS A TRANSAC TION BETWEEN HUF AND ASSESSEE, IT HAS TO BE TREATED DIFFERENTLY AND THE MONEY SO RECEIVED IN CASH IS IN CONTRAVENTION OF THE PROVISI ONS OF SEC. 269SS OF THE ACT. THEREFORE, THE ASSESSEE IS DEFINITELY LI ABLE TO PAY PENALTY U/S 271D OF THE ACT. ITA NO. 1520/15 :- 3 -: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT SHE BORROWED A LOAN OF ` 6,50,000/- FROM HUF. THE HUF CONSISTS OF THE ASSESSEE, HER HUSBAND AND HER SON. IT IS AL SO NOT IN DISPUTE THAT THE ASSESSEE IS ALSO ONE OF THE MEMBER OF THE HUF. WHEN THE ASSESSEE FORMS PART OF THE HUF, RECEIVING A LOAN OF ` 6,50,000/- FROM HER HUSBAND CANNOT BE CONSTRUED AS VIOLATION OF ANY STATUTORY PROVISION. THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT THE OBJECT OF LEVY OF PENALTY U/S 271D MAY NOT BE EXTENDED TO TH E TRANSACTION BETWEEN THE HUSBAND AND WIFE. UNDER THE COMMON LAW , HUSBAND AND WIFE ARE ONE AND THE SAME. THEREFORE, THE TRANSACT ION BETWEEN THEM CANNOT BE TREATED AS SEPARATELY FOR THE PURPOSE OF LEVY OF PENALTY U/S 271D OF THE ACT. IF THE TRANSACTION WAS BETWEEN TH E ASSESSEE AND A THIRD PARTY, THE MATTER WOULD STAND IN A DIFFERENT FOOTING AND THE GENUINENESS OF THE TRANSACTION CANNOT BE A REASON F OR NOT LEVY OF PENALTY. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT PENALTY U/S 271D HAS TO BE LEVIED ONLY ON THE GENUINE TRANSACTI ON BETWEEN TWO DIFFERENT PARTIES. IF THE TRANSACTION WAS BOGUS AN D IT WAS NOT A GENUINE TRANSACTION, SEC. 271D IS NOT APPLICABLE AT ALL. IN THAT CASE, PENALTY IS TO BE LEVIED U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING ANY PART OF THE INCOME. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT ITA NO. 1520/15 :- 4 -: THE TRANSACTION BETWEEN THE HUSBAND AND WIFE CANNOT BE A CAUSE FOR LEVY OF PENALTY U/S 271D OF THE ACT. WE, THEREFOR E, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THE ASSE SSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271D OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 23 RD JUNE, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF