Jt CIT Range - 1,Kolkata, Kolkata V. M/s Ellora Mercantile Pvt Ltd., Kolkata

ITA 1664/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3097 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2012
• Court: TRIBUNAL
• Department Lawyers: DILI P KR RAKSHIT

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NO.1664/KOL/2012 $'( !)*/ ASSESSMENT YEAR : 2007-08 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) JT.C.I.T., RANGE-1, . M/S. ELLORA MERCANTILE PVT . LTD. KOLKATA -VERSUS- KOLKATA (PAN: AAACE 6028 K) ,- 1 2 / FOR THE APPELLANT SHRI DILIP KR.RAKSHIT, SR.DR /0,- 1 2 / FOR THE RESPONDENT NONE '!3 1 4 /DATE OF HEARING : 18.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 18.04.2013. 6 / ORDER PER SHRI K.K.GUPTA, AM THE REVENUE IS IN APPEAL RAISING THE SOLE GROUND WHICH READS AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY OF RS.10,80,000/- IMPOSED U/S 271D OF THE IT ACT FOR VIOLATING THE PROVISIONS OF SECTION 269SS. 2. THE LD. DR INITIATING HIS ARGUMENTS SUBMITTED T HE BRIEF FACTS THAT IN THE INSTANT CASE PENALTY ORDER U/S 271 D WAS PA SSED ON 30.4.2010 IMPOSING A PENALTY OF RS.10,80,000/- FOR ACCEPTING THE SHARE APPLICATI ON MONEY IN CASH IN VIOLATION OF SECTION 269SS. LD.CIT(A)-1, KOLKATA HAS ALLOWED THE ASSESSEE APPEA L VIDE ORDER DATED 06.08.2012 RELYING ON THE JUDGEMENT OF HONBLE ITAT, KOLKATA I N THE CASE OF BASIL EXPORTS LTD. FACTS OF THE INSTANT CASE IS AS UNDER :- ASSESSEE COMPANY HAS RECEIVED SHARE APPLICATION MON EY FROM BALASHRI COMMERCIAL LTD. (FORMERLY BALRAM COMMERCIAL ENTERPRISES LTD.) FOR 22,000 EQUITY SHARES BY PAYING IN CASH AS UNDER :- DATE AMOUNT ITA NO.1664 KOL/2012 2 05.10.06 6,00,000./- 14.10.06 2,00,000/- 31.01.07 3,00,000/- TOTAL 11,00,000/- NO SHARES WAS ALLOTTED BY THE ASSESSEE COMPANY AGAI NST ABOVE MENTIONED SHARE APPLICATION MONEY RECEIVED. AS SUCH RS.10,80,000/- WAS IMPOSED AS PENALTY U/S 271D ACCEPTING THE DEPOSIT IN THE FORM OF SHARE APPLICAT ION MONEY ABOVE SPECIFIED LIMIT AS PRESCRIBED IN SECTION 269SS. MUTE QUESTION INVOLVED IN THE PRESENT CASE IS WHETH ER SHARE APPLICATION MONEY RECEIVED IN CASH COMES UNDER THE DEFINITION OF DEPOSIT/LOAN WITHIN THE MEANING OF PROVISON OF SECTION 269SS. HONBLE JHARKHAND HIGH COURT IN THE CASE OF BHALOTI A ENGINEERING WORKS PVT. LTD. [275ITR 399] HAS OBSERVED THAT SHARE APPLICATION MO NEY PARTAKES OF THE CHARACTER OF DEPOSIT WITHIN THE MEANING OF SECTION 269SS SINCE I T IS REPAYABLE IN SPECIE ON REFUSAL TO ALLOT SHARES AND IS REPAYABLE IF RECALLED BY THE AP PLICANT BEFORE ALLOTMENT OF SHARES AND THE CONCLUSION OF CONTRACT. FROM THE ABOVE IT IS EVIDENT THAT SHARE APPLICATION MONEY PARTAKES THE CHARACTER OF DEPOSIT WITHIN THE MEANING OF SECTION 269SS TILL TH E SHARES ARE ALLOTTED. IN THE INSTANT CASE, ASSESSEE COMPANY HAS RECEIVED SHARE APPLICATION MONEY IN CASH ABOVE SPECIFIED LIMIT BUT DID NOT ALLOT SHARES DURI NG THE YEAR. IT MEANS THAT SHARE APPLICATION MONEY WAS KEPT BY THE ASSESSEE COMPANY AS DEPOSIT ON BEHALF OF THE SUBSCRIBER. HENCE CONSIDERING THE FACTS OF THE PRES ENT CASE AND RELYING ON THE JUDGEMENT OF HONBLE JHARKHAND HIGH COURT (SUPRA), SHARE APPL ICATION MONEY RECEIVED DURING THE YEAR IN CASH ABOVE THE SPECIFIED LIMIT IS A DEPOSIT WITHIN THE MEANING OF SECTION 269SS. 3. THE LD. COUNSEL FOR THE ASSESSEE RESPONDENT PERU SED THE ORDER OF THE LD. CIT(A) WHO HAS ELABORATELY CONSIDERED THE CASE OF THE ASSE SSEE APPELLANT AND NOTED THE FOLLOWING :- AFTER CAREFUL CONSIDERATION OF THE PENALTY ORDER U /S 271D FOR VIOLATION OF SECTION 269SS AND THE WRITTEN SUBMISSIONS FILED BY THE APPE LLANT, IT IS NOTICED THAT ASSESSEE HAD RECEIVED SHARE APPLICATION MONEY OF RS .11 LAKH IN CASH. THE ADDL.CIT, R-1 HAD LEVIED A PENALTY U/S 271D BY RELY ING ON JHARAHAND HIGH COURT JUDGEMENT REPORTED IN 275 ITR 399. ASSESSEE HAD PLA CED RELIANCE ON ITAT, KOLKTA BENCH DECISION DT.21.0`1.2011. IN THE CASE O F BASIL EXPORTS LTD. TO SUPPORT ITS CLAIM THAT SHARE APPLICATION MONEY CANN OT BE TREATED AS DEPOSIT APPEARING IN THE PROVISIONS OF SECTION 269SS AND AC CORDINGLY PENALTY U/S 271D IS NOT APPLICABLE. KEEPING IN VIEW THESE FACTS AND CIR CUMSTANCES, PENALTY LEVIED U/S 271D IS DELETED. 4. WE HAVE HEARD THE LD. DR AND CAREFULLY PERUSED T HE MATERIAL AVAILABLE ON RECORD. ON CAREFUL PERUSAL OF THE ORDERS OF THE AUT HORITIES BELOW WE DO FIND THAT THE FACTS AS BROUGHT ON RECORD BY THE AO DID NOT REQUIR E THE VISIT OF PENALTY PROVISION U/S 271D OF THE ACT AS BEING DEALT WITH BY THE LD. CIT( A) IN AN ELABORATE MANNER, IN SO FAR AS, SHARE APPLICATION MONEY CANNOT BE TREATED AS DE POSIT FOR INVOKING THE PROVISION OF ITA NO.1664 KOL/2012 3 SECTION 269SS OF THE IT ACT. IN THIS VIEW OF THE MA TTER WE DISMISS THE APPEAL FILED BY THE REVENUE. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 18.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M/S. ELLORA MERCANTILE PV.T LTD., 1B, BLACK BURN LA NE, 4 TH FLOOR, KOLKATA-700012. 2 JT.C.I.T., RANGE-1, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-I, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES