ACIT, Trichy V. Shri S.Sridharan, Trichy

ITA 1631/CHNY/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7637 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 04-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAHI P JACOB
• Assessee Lawyers: S RAMACHANDRA RAO
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN JUDICIAL MEMBER .. ITA NO.1631/MDS./2010 A.Y : 2006-2007 ASSISTANT COMMISSIONER OF INCOEM TAX, CIRCLE-II, RANGE-II, 44, WILLIAM ROAD, TRICHY. VS. SHRI S.SRIDHARAN, PLOT NO.6,II MAIN ROAD, GNANAM COLONY, TRICHY. ( PAN NO.AAHPS 8921 P ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMACHANDRA RAO FCA DEPARTMENT BY : SHRI SHAHI P. JACOB O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT: THIS APPEAL IS FILED BY THE REVENUE. THE RELEVA NT ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF CIT(A) TIRUCHIRAPPALLI, DATED 30.07.2010. THE APPEAL AR ISES OUT OF THE PENALTY ORDER PASSED U/S.271D OF THE INCOME TAX AC T, 1961. 2. THE ASSESSING OFFICER HAS ALLEGED A CASE OF VIO LATION OF SECTION 269-SS AGAINST THE ASSESSEE. ACCORDING TO THE ASSE SSING AUTHORITY, PAGE 2 OF 3 ITA.1631 /MDS/10 THE ASSESSEE HAS ACCEPTED LOANS IN CASH EXCEEDING ` .20,000/- FOR WHICH HE HAS LEVIED A PENALTY OF ` .11 LAKHS U/S.271D. 3. THE ASSESSEE IS A TRANSPORT OPERATOR. HIS TRANS PORT CONTRACT IS MAINLY WITH PUBLIC SECTOR COMPANIES. HE HAS TO MOB ILIZE NUMBER OF VEHICLES FOR TRANSPORTING GOODS AS AND WHEN REQUIRE D BY THOSE COMPANIES. IN THIS PROCESS, HE AS AVAILED THE SERV ICES OF CERTAIN LORRY OWNERS AND PAID THEM IN CASH FOR WHICH HE HAD TO AV AIL HAND LOANS IN CASH. THE ASSESSING OFFICER TOTALED THE SAME TO ` .11 LAKHS AND LEVIED PENALTY THEREON. IN FIRST APPEAL, THE CIT(A ) FOUND THAT ASSESSEE HAS EXPLAINED THE CIRCUMSTANCES IN WHICH H E HAD TO ACCEPT CERTAIN CASH IN THE EXIGENCY OF BUSINESS AND THE S AME HAS BEEN PROVED TO BE A REASONABLE CAUSE. ON THAT VIEW, THE PENALTY HAS BEEN DELETED. 4. WE HAVE CONSIDERED THE MATTER. WE SHOULD GIVE P ROPER CONSIDERATION TO THE FACTS OF A CASE WHEN MATTERS O F PENALTY ARE EXAMINED. IN THE PRESENT CASE, THE ASSESSEE IS A TR ANSPORT OPERATOR. HE HAS AVAILED SERVICES OF LARGE NUMBER OF LORRIES FOR CARRYING ON HIS BUSINESS AS A RESULT OF WHICH HIS CASH TURNOVER IS CRORES OF RUPEES. OUT OF SUCH HUGE TURNOVER, THE AMOUNT HIT BY SECTIO N 269-SS AS ALLEGED BY THE ASSESSING AUTHORITY IS ONLY AN AMOUN T OF ` .11 LAKHS. THIS QUANTUM ITSELF SHOWS THAT IN ALMOST OF CASES, THE ASSESSEE WAS TAKING CARE TO MAKE AND TAKE FUNDS BY CHEQUES OR BA NK INSTRUMENTS AND ONLY IN CERTAIN EXIGENT CIRCUMSTANCES, ASSESSEE ACCEPTING CASH FOR MEETING THE URGENCY OF THE BUSINESS. WHEN TH E ASSESSEE IS CALLING LORRIES FOR HIRE FROM THE LORRY STAND, HE W ILL HAVE TO MAKE PAGE 3 OF 3 ITA.1631 /MDS/10 IMMEDIATE PAYMENTS FOR WHICH HE ALSO HAVE TO GO FOR HAND LOANS. THIS IS AN INHERENT CHARACTER OF THE TRADE CARRIED ON BY THE ASSESSEE. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CASH ACCEPTED BY THE ASSESSEE FOR NOMINAL AMOUNT IN THE COURSE OF HIS BUSINESS DOES NOT CONSTITUTE VIOLATION OF SEC.2 69-SS BECAUSE THERE IS A REASONABLE CAUSE AS DIGESTED IN SECTION 273B. 6. IN VIEW OF THE MATTER, WE FIND THAT THE ORDER OF THE CIT(A) IS JUST AND PROPER. 7. IN RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY THE 23 RD OF DECEMBER, 2010 AT CHENNAI. SD/- SD/- ( GEORGE MATHAN ) ( DR.O.K.NARAYANAN ) JUDICIAL MEMBER VICE PRESIDENT CHENNAI, DATED THE 23 RD DECEMBER, 2010. KSS COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE