ITO, CHITTORGARH V. Smt. Gurmeet Kaur, NIMBAHERA

ITA 164/JODH/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54360 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR SHRI AMIT KOTHARI
• Keywords: Unexplained cash credit; Bonafide belief
• Section: 271D; 271E; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR (BEFORE SHRI R.K. GUPTA AND SHRI .N.L. KALR A ) ITA NOS.164 & 165/JU/2009 ASSESSMENT YEARS: 2005-06 & 2006-07 PAN: ABYPA 7590 A THE ITO VS. SMT. GURMEET KAUR WARD- 1 CHITTORGARH W/O SHRI AMARJEET SINGH ARO RA CHITTORGARH ADRASH COLONY, NIMBAKHERA (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI MAHESH KUMAR ASSESSEE BY : SHRI AMIT KOTHARI DATE OF HEARING: 02-12-2011 DATE OF PRONOUNCEMENT: 09-12-2011 ORDER PER N.L. KALRA, AM:- THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF THE LD.CIT(A), UDAIPUR DATED 05-01-2009 FOR THE ASSESSMENT YEAR 2005-06 AND 2006 -07. 2.1 THE REVENUE IS AGGRIEVED AGAINST CANCELLATION O F PENALTY IMPOSED BY THE AO U/S 271D AND 271E OF THE ACT. 2.2 FIRST OF ALL, WE TAKE UP THE APPEAL AGAINST DEL ETION OF PENALTY U/S 271D. 2.3 THE PENALTY HAS BEEN IMPOSED BY THE ADDL. CIT O N THE BASIS OF THE INFORMATION RECEIVED FROM THE AO THAT THE ASSESSEE HAS ACCEPTED THE DEPOSITS IN CASH. BEFORE ADDL. CIT, IT WAS SUBMITTED THAT AO HAS ADDED AN AMOUNT T O THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. HENCE, PENALTY SHOULD NOT BE INITIATED U/S 271D OF THE ACT, THE ADDL. CIT ISSUED FURTHER SHOW CAUSE NOTICE IN WHICH THE ASSES SEE WAS POINTED OUT THAT THE ADDITION MADE BY THE AO U/S 68 HAS BEEN CHALLENGED BY THE AS SESSEE BEFORE THE LD.CIT(A). THE 2 ADDL. CIT WAS OF THE OPINION THAT IN CASE THE APPEA L IS WITHDRAWN THEN THE PENALTY CANNOT BE IMPOSED. THEREFORE, THE ADDL. CIT PROVIDE THE OP PORTUNITY TO THE ASSESSEE TO FILE THE REPLY. THE REPLY WAS FILED VIDE LETTER DATED 18-06- 2008. IT WAS STATED BY THE ASSESSEE THAT DEPARTMENT SHOULD TAKE STAND AS TO WHETHER THE ASSE SSEE HAS ACCEPTED THE DEPOSIT OR THE AMOUNT IS UNEXPLAINED U/S 68 OF THE ACT. BEFORE THE LD.CIT(A) , THAT APPEAL IS PENDING AND THEREFORE, THE VIEW TAKEN BY THE AO IN THE ASSE SSMENT PROCEEDINGS WILL HAVE TO BE CONSIDERED BEFORE IMPOSING THE PENALTY. THE ADDL. C IT HAS REFERRED TO THE AFFIDAVITS GIVEN BY THE DEPOSITORS IN WHICH THEY ACCEPTED THAT THEY HAVE GIVEN THE LOAN TO THE ASSESSEE. ACCORDINGLY PENALTY U/S 271D WAS IMPOSED. 2.4 THE LD.CIT(A) DELETED THE PENALTY AFTER OBSERVI NG AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMI SSION OF THE LD. A/R AND FOUND THAT THE AO LEVIED THE PENALTY U/S 271D OF THE ACT ON THE GROUND THAT THE APPELLANT ACCEPTED AGGREGATE DEPOSIT IN CONTRAVENTION TO SECTION 269SS OF THE ACT EXCEEDING RS.20,000/- AND LEVIED PENALTY U/S 271E OF THE ACT ON THE GROUND THAT THE APPELLANT MADE AGGREGATE REPAYMENT EXCEEDING RS.20,000/- IN CONTRAVENTION TO SECTION 269T OF THE ACT. THE LD . A/R SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN LEVYING THE PENALT IES SPECIALLY WHEN THE AO MADE ADDITION U/S 68 OF THE ACT TREATIN G THE ENTRIES AS UNEXPLAINED CASH CREDITS. FURTHER THE DEPOSITS A ND PAYMENTS ARE IN RESPECT OF FREIGHT RECEIPT AND FREIGHT PAYMENTS. IN QUANTUM APPEAL IT HAS BEEN HELD THAT 'HOWEVER, ON GOING THR OUGH THE DETAILS FURNISHED, IT IS REVEALED THAT THE APPELLANT IS PRE PARING BILTIES IN THE NAME OF THE CONSIGNOR SHOWING THE AMOUNT PAID AND TO BE PAID. THE ENTRIES IN THE BOOKS OF ACCOUNT AND DEPOSITED IN THE BANK ARE VERIFIABLE FROM THE RESPECTIVE COPIES OF BILITIES. ON RECEIPT OF THE AMOUNT FROM THE RESPECTIVE DRIVER/PARTIES, THE APPE LLANT IS HANDING OVER THE AMOUNT TO THE TRUCK OWNERS/DRIVERS, WHICH IS ALSO VERIFIABLE 3 FROM THE BOOKS OF ACCOUNT. FURTHER THE APPELLANT ALSO PRODUCED SHRI AMARJEET SINGH DURING THE ASSESSMENT PROCEEDINGS FOR EXAMINATION AND WHO ACCEPTED THE FACT. FURTHER THE APPELLANT HAS ALSO FURNISHED CONFIRMATIONS OF THE RESPECTIVE DRIVERS REGARDING THE TRANSACTION BETWEE N THE APPELLANT BEFORE THE AO. A COPY OF WHICH ARE SUBMITTED IN THI S, PROCEEDINGS ALSO. FURTHER THE AO CONSIDERED THE FACT OF DEPOSIT IN BANK ACCOUNT ONLY BUT NOT CONSIDERED THE WITHDRAWAL MADE FROM THE ACCOUNT FOR PAYMENTS. AS AND WHEN THE AMOUNT IS RECEIVED BY THE APPELLANT IS ENTERED/CREDITED IN THE CASH BOOK AND SIMILAR IS THE POSITION IN RESPECT OF PAYMENT ALSO. THERE IS NO MATERIAL WITH THE AO TO STATE THAT THE ENTRY IN THE CASH BOOK PERTAIN ED TO CASH CREDIT ENTRIES. THE NAME ENTERED IN THE CASH BOOK IS DRIV ER/CONSIGNOR FROM WHOM THE AMOUNT RECEIVED. THIS VERY FACT WAS NOT VERIFIED BY THE AO DURING THE ASSESSMENT PROCEEDINGS INSPITE OF THE FACT THAT THE APPELLANT GIVEN ALL THE RELEVANT DOCUMENTS FOR VERIFICATION. IN VIEW OF THE ABOVE, THE AO WAS NOT JUSTIFIED IN TREA TING THE ENTRIES IN CASH BOOK ON VARIOUS DATES AND DEPOSITED IN THE BAN K ACCOUNT ON VARIOUS DATES AS UNEXPLAINED CASH CREDIT. THE AO LEVIED THE PENALTIES CONSIDERING THE CREDIT AND DEB IT ENTRIES BUT NOT CONSIDERED THE NATURE OF DEPOSIT IN THE BOOKS O F ACCOUNT AND NATURE OF PAYMENT. ON GOING THROUGH THE DETAILS FURNISHED BY THE A/R OF THE APPELLANT IT IS SEEN TH AT IN THIS CASE THERE IS NO DEPOSIT OR REPAYMENT IN CASH BUT WHATEVER ENT RIES MADE ARE IN RESPECT OF RECEIPT OF FREIGHT PAYMENT FROM THE PART IES AND PAYMENT OF FREIGHT TO THE RESPECTIVE PARTIES. FURTHER THE AO HAS TREATED THE AMOUNT OF RECEIPT AS INCOME OF THE APPELLANT U/S 68 OF THE ACT, THEN ALSO PENALTY U/S 271D AND 271E IS NOT ELIGIBLE. THEREFORE, THE AO WAS NOT JUSTIFIED IN LEVYING THE .PENALTY U/S 271 D AND 271 E OF THE ACT. HENCE THE PENALTY ORDERS ARE CANCELLED. BOTH THE APPEALS ARE ALLOWED. 4 2.5 WE HAVE HEARD BOTH THE PARTIES. IT IS ALWAYS NOT NE CESSARY TO IMPOSE PENALTY U/S 271D AND 271E OF THE ACT IF THERE HAS BEEN BONA FIDE REASONS WITH THE ASSESSEE FOR ACCEPTING THE LOANS/ DEPOSITS IN CASH OR THE AS SESSEE MAY BE UNDER BONAFIDE BELIEF THAT THE AMOUNT SO RECEIVED IS NOT A LOAN OR DEPOSIT BUT AS SECURITY. THE HON'BLE APEX COURT IN THE CASE OF ASSTT. DIRECTOR O F INSPECTION (INVESTIGATION) VS KUM. A.B. SHANTHI ,255 ITR 258 HAS HELD THAT THE AU THORITY VESTED WITH THE POWER TO IMPOSE PENALTY HAS A DISCRETIONARY POWER. IF TH ERE IS A GENUINE AND BONAFIDE TRANSACTIONS AND IF FOR ANY REASONS THE TAXPAYER CO ULD NOT GET THE LOAN OR DEPOSIT BY ACCOUNT PAYEE CHEQUE OR DEMAND DRAFT THEN FOR THE S AME BONAFIDE REASONS THE PENALTY SHOULD NOT BE IMPOSED. THE ITAT JODHPUR BEN CH IN THE CASE OF CHOUHARY & CO. BHUJIAWALA VS ITO, 89 TTJ 357 HELD THAT IN CA SE THE DEFAULT FOR NOT ACCEPTING THE AMOUNT BY CHEQUE IS ON ACCOUNT OF BOANFIDE BELI EF AND THE TRANSACTION IS GENUINE THEN PENALTY U/S 271D CANNOT BE IMPOSED. M OREOVER, THE REVENUE CANNOT BLOW HOT AND COLD. ONCE THE REVENUE HAS TAKEN A STA ND THAT DEPOSITS ARE NON- GENUINE THEN PENALTY U/S 271D CANNOT BE IMPOSED. PE NALTY IS A CIVIL LIABILITY AND FOR THAT SOME SATISFACTION IS REQUIRED TO BE NEEDED FOR IMPOSING SUCH PENALTY. THE AO IN THE ASSESSMENT ORDER HAS ADDED THE AMOUNT U/S 68 OF THE ACT. THERE IS NO TIME LIMIT IN IMPOSING THE PENALTY U/S 271D OF THE ACT. SUCH PENALTY COULD HAVE BEEN INITIATED AFTER THE ORDER OF THE LD.CIT(A) AND IN C ASE THE DEPARTMENT ACCEPTS IT THAT THE ASSESSEE HAS RECEIVED THE DEPOSITS THEN PENALTY COULD HAVE BEEN INITIATED. SO FAR THE FACTS ON RECORD IN THE PRESENT CASE DO NOT SUGG EST THE IMPOSITION OF PENALTY U/S 271D IS CORRECT FOR THE SAME REASONS, WE HOLD THAT PENALTY U/S 271E IS NOT IMPOSABLE. WE THEREFORE, UPHOLD THE FINDINGS OF THE LD.CIT(A). 5 3.0 IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09-12 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JODHPUR DATED: /12/2012 MISHRA COPY TO: 1. THE ITO, WARD- 1 CHITTORGARH 2. SMT. GURMEET KAUR, NIMBAKHERA 3.THE LD. CIT (A) BY ORDER 4.THE CIT 5.THE D/R 6.THE GUARD FILE (ITA NO.164 & 165//JU/09) A.R.. ITAT: JODHPUR