M/s.KSR Alankar Hotels & Resorts P. Ltd, Ernakulam V. The ADCIT, Cochin

ITA 171/COCH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7460 (ITAT-COCHIN)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 09-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Income from undisclosed sources; Question of law; Reasonable cause
• Section: 273B; 143(3); 27

Judgement Text

ITA NOS. 170&171/COCH/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM ITA NOS.170&171/COCH/2015 (ASST YEAR : 2010-11) M/S. KSR ALANKAR HOTELS & RESORTS P. LTD., KANIYAMPUZHA ROAD, VYTILLA, ERNAKULAM. THE ADL. COMMISSIONER OF INCOME- TAX, KOCHI. ( ASSESSEE APPELLANT) VS (REVENUE -RESPONDENT) PAN NO. AADCJ 1488J ASSESSEE BY SHRI R. KRISHNA IYER, CA REVENUE BY SH K P GOPAKUMAR, SR DR DATE OF HEARING 09-02-2016 DATE OF PRONOUNCEMENT 01-03-2016 ORDER PER B.P. JAIN, AM THESE TWO APPEALS OF THE ASSESSEE ARISE FROM THE DIFFERENT ORDERS OF THE LD. CIT(A)-II, KOCHI DATED 12/11/2014, ONE AGAINST THE CONFIRMATION OF THE PENALTY LEVIED U/S. 271D OF THE ACT AND ANOTHER AGA INST THE CONFIRMATION OF THE PENALTY LEVIED U/S. 271E OF THE ACT. 2. SINCE THE ISSUES IN BOTH THE ORDERS ARE IDENTI CAL, THEREFORE, BOTH THE APPEALS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORDER. 3. WE SHALL FIRST TAKE UP THE APPEAL OF THE ASSES SEE IN I.T.A. NO. 170/COCH/2015 FOR THE ASSESSMENT YEAR 2010-11 AS UNDER: ITA NOS. 170&171/COCH/2015 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE BUSINESS OF RUNNING A HOTEL. THE RELEVANT ASSESSMENT YEAR IS 2010-11. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT LOANS WERE RECEIVED IN CASH BY THE ASSESSEE-COMPANY FROM THE DIRECTORS OF THE COMPANY. THE TOTAL AMOUN T OF LOANS RECEIVED BY THE ASSESSEE DURING THE YEAR WAS RS.40,80,000/-. THE A SSESSING OFFICER HELD THAT THE AMOUNT OF RS.40,80,000/- HAS BEEN RECEIVED AS CASH LOANS BY VIOLATING THE PROVISIONS OF SECTION 269SS OF THE ACT AND THEREFOR E, THE ASSESSEE WAS LIABLE FOR PENALTY U/S. 271D OF THE ACT. ACCORDINGLY, THE PENA LTY OF RS.40,80,000/- WAS LEVIED U/S. 271D OF THE ACT VIDE ORDER DATED 30.01. 2014. 5. AGGRIEVED BY THE ORDER DATED 30.01.2014 PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT(A) VIDE ORDER DATED 12/11/2014 CONFIRMED THE ORDER PASSED B Y THE ASSESSING OFFICER AND OBSERVED THAT THE CONTENTION OF THE ASSESSEE TH AT THE DIRECTORS OF A COMPANY WERE EXCLUDED FROM THE PURVIEW OF SECTION 2 69SS WAS NOT ACCEPTABLE. 6. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER DATED 12/11/2014 PASSED BY THE LD. CIT(A). IN THE GROUNDS OF APPEAL , THE ASSESSEE HAS CHALLENGED THE PENALTY LEVIED U/S. 271D OF THE ACT. ITA NOS. 170&171/COCH/2015 3 7. THE LD. AR SUBMITTED THAT THE LOAN TRANSACTION S WERE CARRIED OUT BETWEEN THE DIRECTORS OF THE ASSESSEE-COMPANY AND THE ASSES SEE-COMPANY. THE SAID LOANS WERE RECEIVED BY THE ASSESSEE-COMPANY IN CASH DUE TO URGENT REQUIREMENT FOR THE PURPOSE OF BUSINESS OF THE ASSE SSEE. HE FURTHER SUBMITTED THAT THE TRANSACTIONS AS SUCH HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. A CCORDINGLY, THE CASE OF THE ASSESSEE WAS THAT THERE WAS REASONABLE CAUSE FOR OB TAINING LOANS IN CASH AND THEREFORE, PENALTY CANNOT BE LEVIED U/S. 271D OF TH E ACT. 8. THE LD. DR ON THE OTHER HAND RELIED UPON THE O RDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A) TO SUPPORT HIS SUBMISSIONS. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SECTION 269SS LAYS DOWN THE MODE OF TAKING LOANS AN D DEPOSITS. THE OBJECT OF SECTIONS 269SS AND 269T IS TO ENSURE THAT THE ASSES SEE SHOULD NOT BE ALLOWED TO MANIPULATE HIS BOOKS OF ACCOUNT TO SUBSTANTIATE HIS UNACCOUNTED MONEY BY MAKING FALSE ENTRIES. THE APPLICATION OF SECTION 2 71D ON VIOLATION OF SECTION 269SS IS NOT AUTOMATIC. THE PROVISION OF SECTION 27 3B PROVIDES THAT NO PENALTY U/S. 271D OR 271E SHALL BE IMPOSABLE ON THE ASSESSE E FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS, IF HE PROVES THAT THERE WAS RE ASONABLE CAUSE FOR THE SAID FAILURE. SECTION 274 PROVIDES THE PROCEDURE FOR LE VYING PENALTY U/S. 271D OF THE ACT. ITA NOS. 170&171/COCH/2015 4 10. IN THE PRESENT CASE, THE GENUINENESS AND AUTH ENTICITY OF THE TRANSACTION OF LOAN CARRIED OUT BY THE ASSESSEE-COMPANY IS NOT QUESTIONED BY THE AS SESSING OFFICER OR THE LD. CIT(A) AND MOREOVER ADMITTEDLY, THE AMOUNTS ARE RECEIVED FROM DIRECTORS OF THE COMPANY AND THESE LOANS WERE ADVANCES FOR EMERGENCY AND URGENT NEED OF BUS INESS. THE LOANS HAD BEEN OBTAINED BY THE ASSESSEE FROM THE DIRECTORS OF THE ASSESSEE-COM PANY ITSELF. THE IDENTITY OF THE DIRECTORS OF THE ASSESSEE-COMPANY WAS NOT IN DISPUTE. THE REPAY MENT OF THE DEPOSITS WAS ALSO MADE BY THE ASSESSEE AND THERE IS NO ALLEGATION THAT THE PERSON S TO WHOM THE REPAYMENTS HAVE BEEN MADE HAVE NOT ACCOUNTED THE SAME IN THEIR BOOKS OF ACCOU NT. IT CLEARLY SHOWS THAT THE MONEY WAS ACCOUNTED FOR AND IT WAS NOT THE CASE OF THE ASSESS EE TO INDULGE IN MAKING FALSE ENTRIES IN ITS BOOKS OF ACCOUNT. 11. ALSO THE CREDITORS WHO HAVE GIVEN THE LOANS TO THE ASSESSEE HAVE MADE THE CORRESPONDING LOAN ENTRIES IN THEIR BOOKS OF ACCOUN T AND ACCORDINGLY, THERE WAS NO LOSS TO THE STATE EXCHEQUER. THE REASONABLE CAU SE AS CONTEMPLATED U/S. 273B OF THE ACT IS ESTABLISHED AND THE SAME IS EVID ENT FROM THE FACT THAT THE LOANS OBTAINED BY THE ASSESSEE FROM THE DIRECTORS O F ITS COMPANY WERE REPAID, THE IDENTITY OF THE CREDITORS WAS ESTABLISHED AND A LSO THE FACT THAT THE TRANSACTIONS WERE NOT DOUBTED BY THE ASSESSING OFFI CER IN THE ASSESSMENT PROCEEDINGS. 12. PENALTY U/S. 271D OF THE ACT CANNOT BE LEVIE D ON THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WHERE THE ASS ESSEE HAD LAID DOWN A ITA NOS. 170&171/COCH/2015 5 REASONABLE CAUSE FOR OBTAINING THE LOANS IN CASH. MERELY BECAUSE THE ASSESSEE HAD COMMITTED TECHNICAL OR VENIAL BREACH, THE PENA LTY IS NOT IMPOSABLE. 13. IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ADDL. CIT, 41 DRT 305, THE HYDERABAD BENCH OBSERVED AS UNDER: 16.6 IN LEVYING THE PENALTY U/S. 271D OR 271E ONE HAS TO SEE THE EXISTENCE OF REASONABLE CAUSES. THE WORDS REASONABLE CAUSE HAVE NOT BEEN DEFINED UNDER THE ACT, BUT THEY COULD RECEIVE THE SAME INTERPRETATION WHICH IS GIVEN TO THE EXPRESSION SUFFICIENT CAUSE . THEREFORE, IN THE CONTEXT TO PENALTY PROVISIONS, THE WORDS REASONABL E CAUSE COULD MEAN A CAUSE WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. REASONABLE CAUSE MEANS A CAUSE WHICH PREVENTS A REASONABLE MA N OF ORDINARY PRUDENCE ACTING UNDER NORMAL CIRCUMSTANCES WITHOUT NEGLIGENCE OR INACTION OR WANT OF BONA FIDES. BEFORE IMPOSITION O F PENALTY UNDER S. 271, THE AO MUST BE SATISFIED, NOT ARBITRARILY BUT JUDIC IOUSLY, THAT THE ASSESSEE HAS WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH THE PROVISIONS. 16.7 FURTHER, THERE SHOULD BE FINDINGS IN THE ASSE SSMENT ORDER THAT THE TRANSACTIONS MADE BY THE ASSESSEE IN BREACH OF PROV ISIONS OF SE. 269SS OR 269T WERE NOT GENUINE TRANSACTIONS. THE ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE IT ACT, WHICH IS AFTER SCRUTINY OF TH E BOOKS OF ACCOUNTS OF THE ASSESSEE SHOULD HAVE FINDINGS THAT THE TRANSACTION MADE BY THE ASSESSEE WAS MALA FIDE AND WITH THE SOLE OBJECT TO DISCLOSE THE CONCEALED OR UNDISCLOSED MONEY. IF THERE IS MERELY A TECHNICAL MISTAKE COMMITTED BY THE ASSESSEE WHICH HAS NOT RESULTED IN ANY LOSS OF REVENUE THEN INVOKING THE PROVISIONS OF S. 271D OR 271E IS VERY HARSH, WH ICH IS TO BE AVOIDED. THE OBJECT OF S. 269SS OR 269T IS TO ENSURE THAT A TAXP AYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY OR IF H E MAKES SOME FALSE ENTRIES, HE SHALL NOT ESCAPE BY GIVING FALSE EXPLAN ATION FOR GIVING SAME. A TAXPAYER SHALL NOT BE ALLOWED TO MANIPULATE HIS ACC OUNT TO SUIT THE PLEA OF HIM. THE MAIN OBJECT OF THESE SECTIONS IS TO CUR B THIS MENACE OF MAKING FALSE ENTRIES IN THE ACCOUNT BOOKS AND LATER GIVING AN EXPLANATION FOR THE SAME. THE TRANSACTIONS NOT BEING IMPEACHED AS NOT G ENUINE OR BOGUS, CANNOT LEAD TO THE LEVY OF PENALTY U/S. 271D/271E. EVEN IF THEY WERE TO APPLY, ONE SHOULD SEE THE PROVISIONS OF S. 273B. IF THE ASSESSEE HAVING BONA FIDE BELIEF THAT IT WOULD NOT ATTRACT THE PENA LTY PROVISIONS, GIVEN THE NATURE OF THE TRANSACTIONS AND CIRCUMSTANCES, THE P ENALTY NEED NOT BE ITA NOS. 170&171/COCH/2015 6 LEVIED. IN OTHER WORDS, BONA FIDE BELIEF COUPLED WITH GENUINENESS OF THE TRANSACTIONS CONSTITUTE REASONABLE CAUSE FOR NOT IN VOKING THE PROVISIONS OF SS. 271D AND 271E. 14. IN THE CASE OF CIT VS. MANOJ LALWANI, 180 CTR 394, THE HONBLE RAJASTHAN COURT HELD THAT IN CASE WHERE THE ASSESSEE WAS IN U RGENT NEED OF MONEY FOR MAKING PAYMENT TO THE SUPPLIERS, THE SAME AMOUNTED TO REASONABLE CAUSE AND THE PROVISIONS OF SECTION 271D WERE NOT ATTRACTED. IT WAS HELD AS UNDER: 4. AS PER SECTION 269SS OF THE ACT OF 1961 AFTER 3 0 TH DAY OF JUNE, 1984 NO PERSON IS ALLOWED TO TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR A CCOUNT PAYEE BANK DRAFT, OF AMOUNT OF TWENTY THOUSAND RUPEES OR MORE. SECTION 271D OF THE ACT OF 1961 SPEAKS OF LEVY OF PENALTY OF A SUM EQUAL TO THE AMOUNT OF LOAN OR DEPOSIT SO TAKEN OR ACCEPTED IN CONTRAVENTION OF TH E PROVISIONS OF SECTION 269SS. A PLAIN READING OF SECTION 271D GIVES AN IMP RESSION THAT IF THERE IS A CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS, T HE ASSESSEE SHALL BE LIABLE TO PAY THE PENALTY EQUAL TO THE AMOUNT WHICH HAS BE EN TAKEN AS LOAN OR DEPOSIT AND THERE IS NO DISCRETION LEFT WITH THE AS SESSING AUTHORITY TO WAIVE THE PENALTY CONSIDERING THE FACTS AND CIRCUMSTANCES IN WHICH THE LOAN OF DEPOSIT WAS TAKEN BY THE ASSESSEE. BUT WHEN WE READ SECTION 271D WITH SECTION 273B OF THE ACT OF 1961 WHICH BEGINS WITH NON-OBSTA NTE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIO NS OF SECTION 271D, IT IS CLEAR THAT IN SPITE OF THE PROVISION OF SECTION 271 D, THE ENACTMENT FOLLOWING, NAMELY, NO PENALTY SHALL BE IMPOSABLE ON THE PERSO N OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAI D PROVISIONS IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE, W ILL HAVE ITS FULL OPERATION. SECTION 273-B PERMITS THE ASSESSING AUTHORITY NOT T O IMPOSE A PENALTY PROVIDED UNDER SECTION 271D OF A SUM EQUAL TO THE A MOUNT OF LOAN OR DEPOSIT TAKEN OR ACCEPTED IN SPITE OF THE BREACH OF PROVISIONS OF SECTION 269SS WHEREIN THE PERSON HAS ACCEPT A LOAN OR DEPOS IT OR THE AGGREGATE AMOUNT OF SUCH LOAN OR DEPOSIT BY WAY OF ACCOUNT PA YEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, IF THE ASSESSEE OR THE PE RSON PROVES BEFORE THE ASSESSING AUTHORITY THAT THERE WAS A REASONABLE CAU SE FOR NOT ACCEPTING THE AMOUNT OF LOAN OR DEPOSIT BY WAY OF ACCOUNT PAYEE C HEQUE OR ACCOUNT PAYEE BANK DRAFT, IF THE ASSESSEE OR THE PERSON PRO VES BEFORE THE ASSESSING AUTHORITY THAT THERE WAS A REASONABLE CAUSE FOR NOT ACCEPTING THE AMOUNT OF LOAN OR DEPOSIT BY WAY OF ACCOUNT PAYEE CHEQUE O R ACCOUNT PAYEE BANK DRAFT. UNDER SECTION 273B A JUDICIAL DISCRETI ON IS LEFT WITH THE ASSESSING ITA NOS. 170&171/COCH/2015 7 AUTHORITY NOT TO LEVY A PENALTY U/S. 271D IF THE AU THORITY IS SATISFIED THAT THERE WAS A REASONABLE CAUSE FOR NOT COMPLYING WITH THE P ROVISIONS OF SECTION 269SS OF THE ACT OF 1961. 5. IN THE PRESENT CASE THE TRIBUNAL HAS FOUND THAT THE ASSESSEE IS AN EXPORTER AND WAS IN URGENT NEED OF THE MONEY FOR COMPLYING W ITH THE TIME BOUND SUPPLIES AND, THEREFORE, HE TOOK A LOAN RS.2,50,000 /- (RS. TWO LAC FIFTY THOUSAND) FROM HIS BROTHER-INLAW MUKESH MANWANI. OU T OF THE LOAN SO TAKEN, AN AMOUNT OF RS.2,45,000/- (RS. TWO LAC FORTY-FIVE THOUSAND) WAS IMMEDIATELY DEPOSITED IN THE BANK, WHICH INDICATES THAT THE AMO UNT OF LOAN, IN FACT, WAS RECEIVED BY HIM FROM MUKESH MANWANI. IT WAS ONLY T O MEET THE EMERGENT NEED OF TIME BOUND SUPPLIES; THE LOAN WAS TAKEN AS HE DID NOT HAVE SUFFICIENT TIME AND FUNDS AND, THAT THERE WAS NO IN TENTION TO VIOLATE THE PROVISION OF SECTION 269SS OF THE ACT OF 1961. THE TRIBUNAL, IN THESE CIRCUMSTANCES, HAS ARRIVED AT A CONCLUSION THAT THE CASH LOAN WAS TAKEN BY THE ASSESSEE IN THE EXCEPTIONAL CIRCUMSTANCES AND T HAT IT IS A CASE OF REASONABLE CAUSE, AS A CONSEQUENCE THEREOF SET ASI DE THE PENALTY IMPOSED BY THE REVENUE AUTHORITIES . AS WE HAVE ALREADY HEL D THAT ON A REASONABLE CAUSE BEING SHOWN, THE ASSESSING AUTHORITY HAS JURI SDICTION NOT TO IMPOSE THE PENALTY AND, THEREFORE, IN OUR OPINION, THE TRIBUNA L HAS ACTED IN ACCORDANCE WITH THE LAW IN WAIVING THE PENALTY IMPOSED ON THE ASSESSEE BY THE REVENUE AUTHORITIES. 6. IN VIEW OF THE AFORESAID, THE QUESTIONS ARE ANS WERED IN FAVOUR OF THE ASSESSEE. THE APPEAL IS DISMISSED. 15. IN THE CASE OF CIT VS. BALAJI TRADERS, 303 IT R 312, THE HONBLE MADRAS HIGH COURT HELD AS UNDER: 5. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE SUBMISSIO NS MADE ON EITHER SIDE. 6. THIS COURT IN CIT VS. KUNDRATHUR FINANCE & CHIT CO. (SUP RA), FOLLOWING THE DECISION OF APEX COURT IN ASST. DIRECTOR OF INSPECTION (INVESTIGA TION) VS. KUM. A.B. SHANTHI (2002) 255 ITR 258 ( SC), HELD THAT IF THERE WAS GENUINE AND BONA FIDE TRANSACT ION AND THE TAX PAYER COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT PAYE E CHEQUE OR DEMAND DRAFT FOR SOME BONA FIDE REASON, THE AUTHORITY VESTED WITH THE POWE R TO IMPOSE PENALTY HAS A DISCRETION NOT TO LEVY PENALTY. 7. IN THE INSTANT CASE, THE CIT(A) AND THE TRIBUNAL FOUND THAT (I) THERE WAS BUSINESS EXIGENCY FORCING THE ASSESS EE TO TAKE CASH LOANS FOR THE PURPOSE OF HONOURING THE COMMITMENT, VIZ., ISSUANCE OF CHEQUE ON A PARTICULAR DATE; (II) THE CREDITORS WERE GENUINE PERSONS AND THE TRANSACTI ONS WERE NEVER DOUBTED BY THE AUTHORITIES BELOW; AND (III) THERE WAS NO REVENUE LOS S TO THE STATE EXCHEQUER, AND ITA NOS. 170&171/COCH/2015 8 SATISFIED THAT THE ASSESSEE HAS SHOWN REASONABLE CAUSE F OR THE ABOVE TRANSACTIONS. 8. THE AUTHORITIES HAVE ALSO NOTICED THAT ALL THE TRANSACTI ONS WERE BROUGHT INTO ACCOUNT OF THE ASSESSEE AND THERE WERE CORRESPONDING ENTRIES IN T HE BOOKS OF ACCOUNT OF RESPECTIVE PARTIES/CREDITORS WHICH SATISFIED THE TEST OF BUSINESS EXIGENCY. 9. ONCE THE SAID FINDING IS ARRIVED AT BY THE TRIBUNAL ON FACTS, A S HELD BY THE DELHI HIGH COURT IN CIT VS. PARMA NAND ( 200 4 ) 266 ITR 255 WHICH WAS FOLLOWED BY THIS COURT IN RATNA AGENCIES CASE THAT THE FINDING RECORDED BY THE TRIBUNAL AS TO T HE REASONABLE IS ESSENTIALLY A FINDING OF FACT AND NO QUESTION OF LAW MUCH LESS A SUBST ANTIAL QUESTION OF LAW WOULD ARISE, WE DO NOT HAVE ANY HESITATION TO HOLD THAT IT MAY NO T BE PROPER FOR THIS COURT TO INTERFERE WITH SUCH A FINDING OF FACT. FOR ALL THESE REAS ONS, ANSWERING THE QUESTIONS OF LAW REFERRED TO US AGAINST THE REVENUE, THE APPEAL STAND S DISMISSED. NO COSTS. 1 6. IN VIEW THEREOF, WE DIRECT THE ASSESSING OFFI CER TO CANCEL THE PENALTY LEVIED U/S. 271D OF THE ACT AND REVERSE THE ORDER OF THE L D. CIT(A). ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. THUS, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 170/COCH/2015 IS ALLOWED. 17. NOW WE SHALL TAKE UP THE APPEAL IN I.T.A. NO. 171/COCH/2015 AS UNDER: 18. THE FACTS IN THE PRESENT CASE ARE IDENTICAL T O THE FACTS IN THE CASE OF THE ASSESSEE IN I.T.A. NO. 170/COCH/2015. THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR 2010-11 HAD MADE REPAYMENT OF RS.39,60,460/- I N CASH AS AGAINST THE LOAN TAKEN, IN VIOLATION OF SECTION 269T OF THE ACT . THE ASSESSING OFFICER HAD LEVIED PENALTY OF RS.39,60,460/- U/S. 271E OF THE A CT. 19. IN APPEAL, THE LD. CIT(A) HAS CONFIRMED THE SA ME. ITA NOS. 170&171/COCH/2015 9 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. WE HAVE ALREADY ALLOWED THE APPEAL OF THE ASSESSEE IN I.T.A. NO.170/COCH/2015 WHERE WE HAVE DIRECTED THE ASSESSING OFFICER TO CAN CEL THE PENALTY LEVIED U/S. 271D OF THE ACT FOR TAKING LOANS IN VIOLATION OF SE CTION 269SS OF THE ACT AS THE ASSESSEE HAD ESTABLISHED THE REASONABLE CAUSE FOR T AKING LOANS IN CASH. THE PRINCIPLE OF LAW PERTAINING TO SECTIONS 269SS AND 2 71D IS EQUALLY APPLICABLE IN THE CASE OF SECTIONS 269T AND 271E. THE FACTS IN T HE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF THE APPEAL OF THE ASSES SEE IN I.T.A.NO.170/COCH/2015 IN AS MUCH AS THE ASSESSING OFFICER HAD NOT DOUBTED THE TRANSACTION OF REPAYMENTS AND IT IS NOWHERE ALLEGED THAT THE ASSES SEE HAD MADE FALSE ENTRIES TO ACCOMMODATE UNACCOUNTED INCOME. THE REPAYMENTS HAVE BEEN MADE TO THE DIRECTORS, SISTER CONCERN OF THE ASSESSEE AND F OR URGENT NEED. MOREOVER, THE IDENTITY OF THE PARTIES IS NOT IN DISPUTE. THE PAR TIES TO WHOM THE REPAYMENTS HAVE BEEN MADE HAVE ACCOUNTED THE MONEY RECEIVED FR OM THE ASSESSEE IN THEIR BOOKS OF ACCOUNT. IN VIEW THEREOF, WE HOLD T HAT THE ASSESSEE HAS ESTABLISHED THE REASONABLE CAUSE AS CONTEMPLATED U/ S. 273B OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO CAN CEL THE PENALTY LEVIED U/S. 271E OF THE ACT AND ACCORDINGLY, THE ORDER OF THE L D. CIT(A) IS REVERSED. ACCORDINGLY, ALL THE GROUNDS OF THE ASSESSEE ARE AL LOWED. THUS, THE APPEAL OF THE ASSESSEE IN I.T.A. NO.171/COCH/2015 IS ALLOWED. ITA NOS. 170&171/COCH/2015 10 21. IN THE RESULT, THE APPEALS OF THE ASSESSEE I N I.T.A. NOS. 170&171/COCH/2015 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING I.E ON THE 1ST OF MARCH, 2016. SD/- SD/- ( GEORGE GEORGE.K) (B P JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : COCHIN DATED: 1ST MARCH, 2016 GJ COPY TO: 1. KSR ALANKAR HOTELS & RESORTS (P) LTD., KNIYAMPUZHA ROAD, VYTILLA, ERNAKULAM. 2. THE ADDL. COMMISSIONER OF INCOME-TAX, KOCHI 3. THE COMMISSIDONER OF INCOME-TAX(APPEALS)-II, KOCHI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. DR/ITAT, COCHIN. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN 1.DATE OF DICTATION : 29/02/20156 2.DATE ON WHICH THE TYPED DRAFT IS PLACED 01/03/2016 BEFORE THE DICTATING MEMBER OTHER MEMBER: 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . PS/PS: 01/03/2016 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER : 01/03/2016 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. PS/PS : 01/03/2016 6. NO. OF PGS. OF DICTATION PAD PLACED ON RECORD 7. NO. OF PGS. OF DRAFT OF THE ORDER PLACED ON RE CORD 8. DATE ON WHICH THE FILE GOES TO BENCH CLERK: 01/ 03/2016 9. DATE ON WHICH THE FILE GOES TO HEAD CLERK: ITA NOS. 170&171/COCH/2015 11 10. DATE ON WHICH THE FILE GOES TO ASSISTANT REGIST RAR 11. DATE OF DISPATCH OF THE ORDER: