M/s. Sofitra Impex Pvt. Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 1748/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7082 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-08-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 16-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B RAMANJANEYULA
• Assessee Lawyers: S K CHATURVEDI
• Keywords: Reasonable cause; Reason to believe

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH FRIDAY (F) NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1748 & 1749/DEL./2012 ASSTT. YEAR : 2002 - 03 SOFITRA IMPEX PVT. LTD., VS. ADDL. CIT, RANGE - 9, C/O S. CHATURVEDI & ASSOCIATES, NEW DELHI. 305, DEEP SHIKHA, RAJENDRA PLACE, NEW DELHI.(PAN: AAECS 1474R) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. CHATURVEDI, C.A. RESPONDENT BY : SH. B. RAMANJANEYULA, SR. DR DATE OF HEARING : 09.12.2016 DATE OF PRONOUNCEMENT : 10 .01.2017 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 24.02.2009 AND 18.02.2009 OF LD. CIT(A) - XII, NEW DELHI FOR THE ASSESSMENT YEAR 2002 - 03 ON THE GROUND THAT THE ACTION OF THE LD. CIT(A) - XII, NEW DELHI BY CONFIRMING THE PENALTY U/S. 271D OF RS.13,86,244/ - AND U/S. 271E OF RS.2,95,500/ - , IS WRONG, ARBITRARY, ILLEGAL AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 1748 & 1749/DEL./2012 2 2. SINCE THE FACTS INVOLVED IN BOTH THE APPEALS ARE COMMON, HENCE, FOR THE SAKE OF CONVENIENCE, THE SAME ARE BEING DISPOSED OFF TOGETHER BY THIS CONSOLIDATED ORDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE SCRUTINY PROCEEDINGS OF THE ASSESSEE COMPANY , THE ASSESSING OFFICER NOTED THAT THE ASSESSEE COMPANY HAD RECEIVED CASH OF RS. 6,29,000/ - FROM ANWAR JALIL AHMED KHAN , RS. 7,30,000/ - FROM SOFIA PRAVEEN KHAN, BOTH DIRECTORS OF THE ASSESSEE - COMPANY AND RS.27,244 / - FROM M/S. SOFTECH SOLUTIONS PVT. LTD. ON BEING APPRISED OF THE FACT BY THE ASSESSING OFFICER, THE ASSESSEE AT FIRST INSTANCE TRIED TO MISLEAD THE AO THAT THE ASSESSEE COMPANY HAD NOT ACCEPTED ANY CASH DEPOSIT AND IN SUPPORT SUBMITTED A CASH BOOK WHERE T HERE WAS NO MENTION OF RECEIPTS OF THE ABOVE AMOUNTS. THE ASSESSING OFFICER TREATED THE SAID CASH BOOK AS UNAUTHENTIC AS IT WAS NOT PREPARED AS PER ACCOUNTING PRINCIPLES . THE ASSESSING OFFICER ALSO OBSERVED IN THE ASSESSMENT PROCEEDINGS THAT THE AUDITOR OF THE COMPANY IN COLUMN NO. 24(A) & (B) OF FORM 3CD, HAS NOT REPORTED THE DETAILS OF AMOUNTS RECEIVED AND REPAID IN VIEW OF THE PROVISIONS OF SECTION 269SS & 269T, WHEREAS THE ASSESSING OFFICER ON SCRUTINY OF ACCOUNTS FOUND THAT THE ASSESSEE COMPANY HAS TAK EN LOAN IN CASH ON DIFFERENT DATES & REPAID THE SAME IN CASH IN CONTRAVENTION OF SECTION 269SS & 269T OF THE ACT. ITA NO. 1748 & 1749/DEL./2012 3 4. ON THE BASIS OF ABOVE FACTS, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271D & 271E OF THE ACT. IN THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE MONEY WAS RECEIVED FROM DIRECTOR SMT. SOFIA PRAVEEN KHAN AS SHARE APPLICATION MONEY FOR ALLOTMENT OF SHARE CAPITAL, BUT THE BOARD REJECTED THE ALLOTMENT OF SHARE AND THE MONEY SO RECEIVED WAS REPAID TO HER IN CASH. THE ASSES SING OFFICER OBSERVED THAT IT WAS NEITHER A LOAN NOR SHARE APPLICATION MONEY, BUT WAS A TEMPORARY DEPOSITS WITH THE COMPANY, AS NO INTEREST IS SAID TO HAVE BEEN PAID BY THE ASSESSEE ON ITS REPAYMENT WHICH IS THE PRECONDITION OF A LOAN. THE ASSESSING OFFICE R, THEREFORE, CONCLUDED THAT THE ASSESSEE HAS RECEIVED THE MONEY IN CASH IN VIOLATION OF SECTION 269SS AND REPAID THE SAME IN CASH IN VIOLATION OF SECTION 269T OF THE ACT AND IMPOSED A PENALTY OF RS.13,86,244/ - U/S. 271D AND RS.2,95,500/ - U/S. 271E OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEALS BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE PENALTY ORDERS AND THE SUBMISSIONS OF THE ASSESSEE , CONFIRMED THE PENALTY ORDERS PASSED BY THE ASSESSING OFFICER. 5. THE LD. AR OF THE ASSESSEE CONTENDED THAT THE AMOUNT WAS DEPOSITED BY MRS. SOFIA PRAVEEN KHAN ONLY OF RS.7,30,000/ - AND NOT RS.13,86,244/ - . THIS AMOUNT WAS RECEIVED AS SHARE APPLICATION MONEY FOR ISSUE OF SHARE CAPITAL IN THE COMPANY. SHE IS A NRI AND HAD AGRICULTURAL INCOME WHICH IS NOT TAXABLE IN ITA NO. 1748 & 1749/DEL./2012 4 INDIA. WHEN THE BOARD OF DIRECTORS REJECTED THE OFFER FOR PURCHASE OF SHARES OF THE COMPANY, THEN THE SHARE APPLICATION MONEY WAS RETURNED BY CHEQUE NO. 87757 AND 87755 FOR RS.4,00,000/ - AND RS.3,00,000/ - RESPECTIVELY . NO ANY CASH PAYMENTS HAVE BEEN RE CEIVED FROM SH. ANWAR JALIL AHMED KHAND THE AO HAS WRONGLY MENTIONED THE SAME AMOUNT TWICE RECEIVED FROM MRS. SOFIA PRAVEEN KHAN AS MENTIONED IN THE REPLY OF THE ASSESSEE PLACED AT PAPER BOOK PAGE 21 & 22 BEFORE US. THEREFORE, NO PENALTY IS LEVIABLE AGAIN ST THE ASSESSEE COMPANY. RELIANCE IS PLACED ON THE FOLLOWING JUDGMENTS : (I). CIT V. IDHAYAM PUBLICATIONS LTD., 285 ITR 221 (MAD.) (II). CIT VS. SUNIL KUMAR GOEL, 315 ITR 163 (P&H) (III). CIT VS. BALAJI TRADERS, 303 ITR 312 (MAD.) (IV). CIT VS. MAHESHWARI NIRMAN UDYOG, 302 ITR 201 (RAJ.) (V). CIT VS. BHAGWATI PRASAD BAJORIA(HUF) 263 ITR 487 (GAU.) (VI). ADI VS. KUMARI A.B. SHANTHI, 255 ITR 258 (SC) (VII). SMT. DIMPLE YADAV APPEAL NO. 174 OF 2015 DT. 21.08.2015(ALL). 6. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE CLEARLY VIOLATED THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT AND ALL THE CASE LAWS RELIED BY THE LD. DR DO NOT SUPPORT THE CASE OF ASSESSEE BECAUSE THE ASSESSEE COULD NOT BE AB LE TO SUBMIT ANY REASONABLE CAUSE UNDER WHICH IT RECEIVED THE MONEY IN CASH AND REPAID THE SAME IN CASH. THE AO NOTED IN THE ASSESSMENT ORDER AT PAGE NO. 2 & 3 THAT THE CASH BOOK SUBMITTED WAS NOT AUTHENTIC AND MANIPULATED ONE. THE ITA NO. 1748 & 1749/DEL./2012 5 TAX AUDITOR HAS ALSO HI DDEN THE ACTUAL CASH PAYMENTS RECEIVED AND PAID IN VIOLATION OF SECTION 269SS AND 269T IN ITS TAX AUDIT REPORT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD AND WE FIND THAT THE ASSESSEE HAS TAKEN DIVERSE STANDS AT DIFFERENT POINTS OF TIME. IN THE ASSESSMENT PROCEEDINGS, INITIALLY THE ASSESSEE STATED THAT NO CASH PAYMENT HAS BEEN RECEIVED. IN THE PENALTY PROCEEDINGS, IT WAS STATED THAT CASH PAYMENT WAS RECEIVED AS SHARE APPLICATION MONEY AND WAS REPAID TO SOFIA PRAVEEN KHAN ON REJECTION OF THE OFFER BY THE BOARD OF DIRECTORS. THE APPELLANT COULD NOT BRING ANY EVIDENCE ON RECORD TO SUPPORT HIS CLAIM REGARDING THE AMOUNT RECEIVED FROM SOFIA PRAVEEN KHAN TOWARDS SHARE APPLICATION MONEY AND THE REJECTION OF THE SHARE CAPITAL ALLOTMENT BY THE BOARD. THE APPELLANT HAS ALSO FAILED TO REBUT THE FINDING OF THE AUTHORITI ES BELOW THAT ONCE, BOTH THE DEPOSITORS WERE THE DIRECTORS OF ASSESSEE COMPANY, THERE WAS NO REASON TO BELIEVE THAT THE PROPOSED OFFER OF SHARE CAPITAL ALLOTMENT WAS WITHDRAWN, FOR WHICH NO EVIDENCE IS LAID ON RECORD. THE ASSESSEE ALSO COULD NOT ADDUCE AN Y EVIDENCE BEFORE US TO SUPPORT ITS STAND THAT THE AMOUNT SO RECEIVED FROM SOFIA PRAVEEN KHAN WAS REPAID BY WAY OF CHEQUES OR THE AMOUNTS RECEIVED FROM SOFIA PRAVEEN KHAN WAS MENTIONED TWICE BY THE AO. THE CASH BOOK SUBMITTED WAS NOT FOUND AUTHENTIC, AS IT WAS AN EXTRACT TYPED ON A - 4 SIZE PAPER AS MENTIONED BY THE LD. CIT(A) IN ITA NO. 1748 & 1749/DEL./2012 6 THE IMPUGNED ORDER. THERE IS ALSO NO PLAUSIBLE EXPLANATION WITH RESPECT TO THE AMOUNT RECEIVED FROM M/S. SOFTECH SOLUTIONS PVT. LTD. THE TAX AUDITOR HAS ALSO NOT REPORTED TRUE FACTS IN RESPECTIVE COLUMNS OF TAX AUDIT REPORT AS MENTIONED ABOVE. IN PRESENCE OF ALL THESE FACTS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE CONCLUSIONS OF THE LD. AUTHORITIES BELOW THAT THE APPELLANT HAS TAKEN LOAN IN CONTRAVENTION OF SECTION 269 SS AND HAS REPAID THE SAME IN CONTRAVENTION OF SECTION 269T OF THE ACT ENTAILING PENALTY U/S. 271D AND 271E OF THE ACT. THE CASE LAWS RELIED ON BEHALF OF THE APPELLANT DO NOT RENDER SUPPORT TO THE APPELLANT, AS THE APPELLANT IN THE INSTANT CASE HAS FAILED TO EXPLAIN ANY REASONABLE CAUSE UNDER WHICH IT RECEIVED AND REPAID THE LOAN IN CASH IN VIOLATION OF SECTION 269SS AND 269T OF THE ACT. THE LD. CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL AND HAS PASSED A REASONED ORDER. WE ACCORDINGLY, FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE LD. CIT(A). AS A RESULT, BOTH THE APPEALS OF THE ASSESSEE DESERVE TO BE DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.01.2017 . SD / - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.01.2017 *AKS/ -