ACIT, Kota V. SUBHASH PARETA, Kota

ITA 183/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2124 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Rejection of books of accounts; Unexplained expenditure; Business income; Loose papers; Period of limitation; Question of law; Initiation of penalty proceedings; Reasonable cause; Competent authority
• Section: 69C; 40A(3); 143(3); 133(6); 131; 68; 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 183/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-2012 THE ACIT, CIRCLE-1, KOTA. CUKE VS. SHRI SUBHASH PARETA, PROP. M/S PARETA ASSOCIATES, 3/148, GANESH TALAB, BASANT VIHAR, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AGGPP4046H VIHYKFKHZ@ APPEL LANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ CO NO. 15/JP/2017 (ARISING OUT OF ITA NO. 184/JP/2017) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-2012 SHRI SUBHASH PARETA, PROP. M/S PARETA ASSOCIATES, 3/148, GANESH TALAB, BASANT VIHAR, KOTA. CUKE VS. THE ACIT, CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AGGPP4046H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 184/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-2012 THE ACIT, CIRCLE-1, KOTA. CUKE VS. SHRI SUBHASH PARETA, PROP. M/S PARETA ASSOCIATES, 3/148, GANESH TALAB, BASANT VIHAR, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AGGPP4046H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 2 VK;DJ VIHY LA- @ CO NO. 14/JP/2017 (ARISING OUT OF ITA NO. 183/JP/2017) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-2012 SHRI SUBHASH PARETA, PROP. M/S PARETA ASSOCIATES, 3/148, GENESH TALAB, BASANT BIHAR, KOTA. CUKE VS. THE ACIT, CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AGGPP4046H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 10/08/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 01/09/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE REVENUE AND CRO SS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A), K OTA OF EVEN DATE I.E, 19.12.2016 IN RESPECT OF LEVY OF PENALTY U/S 271D A ND 271E FOR A.Y. 2011-12 RESPECTIVELY. NONE APPEARED ON BEHALF OF T HE ASSESSEE. THE LD DR WAS HEARD. BASED ON MATERIAL AVAILABLE ON REC ORD, ALL THESE APPEALS ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. THE RESPECTIVE GROUNDS OF THE APPEAL ARE AS UNDER:- 183/JP/17 (GROUND OF REVENUES APPEAL) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING PENALTY OF RS. 60,29,868/- IM POSED U/S ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 3 271D OF THE ACT WITHOUT APPRECIATING AND IGNORING T HE FINDINGS OF THE ADDL. CIT; 15/JP/17 (GROUND OF ASSESSEES APPEAL) THAT THE LD. CIT(A) GROSSLY ERRED IN NOT ALLOWING THE LEGAL GROUND RAISED BY THE ASSESSEE THAT THE PENALTY ORDER PASSE D U/S 271-D IS TIME BARRED, IN VIEW OF THE LIMITATION APPLICABLE U /S 275(I)(C) WHICH IS AFFIRMED BY HON. RAJASTHAN HIGH COURT IN T HE CASE OF HISSARIA BROS. (THE ASSESSMENT ORDER PASSED ON 19.1 0.2014 AND PENALTY WAS LEVIED ON 29.10.2015 I.E. BEYOND 6 MONT HS HENCE IT IS TIME BARRED.) 184/JP/2017 (GROUND OF REVENUES APPEAL) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING PENALTY OF RS. 46,31,452/- IM POSED U/S 271E OF THE ACT WITHOUT APPRECIATING AND IGNORING THE FI NDINGS OF THE ADDL. CIT. 14/JP/17 (GROUND OF ASSESSEES APPEAL) THAT THE LD. CIT(A) GROSSLY ERRED IN NOT ALLOWING THE LEGAL GROUND RAISED BY THE ASSESSEE THAT THE PENALTY ORDER PASSE D U/S 271-E IS TIME BARRED, IN VIEW OF THE LIMITATION APPLICABLE U /S 275(1)(C) WHICH IS AFFIRMED BY HON. RAJASTHAN HIGH COURT IN T HE CASE OF HISSARIA BROS. (THE ASSESSMENT ORDER PASSED ON 19.1 0.2014 AND PENALTY WAS LEVIED ON 29.10.2015 I.E. BEYOND 6 MONT HS HENCE IT IS TIME BARRED.) 2. FIRSTLY, WE WILL TAKE THE ISSUE OF LIMITATION AS TO WHETHER THE ORDER PASSED U/S 271D AS WELL AS U/S 271E OF THE ACT ARE BARRED BY LIMITATION AS PRESCRIBED UNDER SECTION 275 OF THE ACT. IN ITS CROSS OBJECTION, THE ASSESSEE HAS STATED THAT THE ASSESSMENT ORDER WAS P ASSED ON ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 4 19.10.2014 AND THEREAFTER PENALTY WAS LEVIED ON 29. 10.2015 WHICH IS BEYOND 6 MONTHS HENCE IT WAS BARRED BY LIMITATION U /S 275(1)(C) OF THE ACT. IT WAS ACCORDINGLY CONTENDED THAT THE INITIAT ION FOR LEVY OF PENALTY SHOULD BE RECKONED FROM THE DATE OF PASSING OF THE ASSESSMENT ORDER. 3. THE LD DR DRAWN OUR REFERENCE TO CIRCULAR NO. 9 /DV/2016 DATED 26- 4-2016 ISSUED BY CBDT AND SUBMITTED THAT THE LD CIT (A) VIEW IS ALSO IN CONSONANCE WITH THE DEPARTMENTAL VIEW AS SPECIFIED BY THE BOARD CIRCULAR. THE CONTENTS OF THE CBDT CIRCULAR READ A S UNDER: COMMENCEMENT OF LIMITATION FOR PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271E - IT HAS BEEN BROUGHT TO THE NOTICE OF THE CENTRAL BOARD OF DIRECT TAXES (HEREINAFTER REFERRED TO AS THE BOARD) THAT THERE ARE CONFLICTING INTERPRETATIONS OF VARIOUS HI GH COURTS ON THE ISSUE WHETHER THE LIMITATION FOR IMPOSITION OF PENALTY UN DER SECTIONS 271D AND 271E COMMENCES AT THE LEVEL OF THE ASSESSING OF FICER (BELOW THE RANK OF JOINT COMMISSIONER OF INCOME TAX) OR AT LEV EL OF THE RANGE AUTHORITY I.E. THE JOINT COMMISSIONER OF INCOME TAX /ADDL. COMMISSIONER OF INCOME TAX. SOME HIGH COURTS HAVE HELD THAT THE LIMITATION COMM ENCES AT THE LEVEL OF THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY I. E. RANGE HEAD WHILE OTHERS HAVE HELD THAT EVEN THOUGH THE ASSESSING OFF ICER IS NOT COMPETENT TO IMPOSE THE PENALTY, THE LIMITATION COM MENCES AT THE LEVEL OF THE ASSESSING OFFICER WHERE THE ASSESSING OFFICE R HAS ISSUED SHOW CAUSE NOTICE OR REFERRED TO THE INITIATION OF PROCE EDINGS IN ASSESSMENT ORDER. ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 5 2. ON CAREFUL EXAMINATION OF THE MATTER, THE BOARD IS OF THE VIEW THAT FOR THE SAKE OF CLARITY AND UNIFORMITY, THE CONFLIC T NEEDS TO BE RESOLVED BY WAY OF A 'DEPARTMENTAL VIEW'. 3. THE HON'BLE KERALA HIGH COURT IN THE CASE OF GRI HALAXMI VISION V. ADDL. COMMISSIONER OF INCOME TAX, RANGE 1, KOZHIKOD E1, VIDE ITS ORDER DATED 8-7-2015 IN ITA NOS. 83 & 86 OF 2014, OBSERVE D THAT, 'QUESTION TO BE CONSIDERED IS WHETHER PROCEEDINGS FOR LEVY OF PENALTY, ARE INITIATED WITH THE PASSING OF THE ORDER OF ASSESSME NT BY THE ASSESSING OFFICER OR WHETHER SUCH PROCEEDINGS HAVE COMMENCED WITH THE ISSUANCE OF THE NOTICE ISSUED BY THE JOINT COMMISSI ONER. FROM STATUTORY PROVISION, IT IS CLEAR THAT THE COMPETENT AUTHORITY TO LEVY PENALTY BEING THE JOINT COMMISSIONER. THEREFORE, ONLY THE JOINT C OMMISSIONER CAN INITIATE PROCEEDINGS FOR LEVY OF PENALTY. SUCH INIT IATION OF PROCEEDINGS COULD NOT HAVE BEEN DONE BY THE ASSESSING OFFICER. THE STATEMENT IN THE ASSESSMENT ORDER THAT THE PROCEEDINGS UNDER SEC TIONS 271D AND 271E ARE INITIATED IS INCONSEQUENTIAL. ON THE OTHER HAND, IF THE ASSESSMENT ORDER IS TAKEN AS THE INITIATION OF PENA LTY PROCEEDINGS, SUCH INITIATION IS BY AN AUTHORITY WHO IS INCOMPETENT AN D THE PROCEEDINGS THEREAFTER WOULD BE PROCEEDINGS WITHOUT JURISDICTIO N. IF THAT BE SO, THE INITIATION OF THE PENALTY PROCEEDINGS IS ONLY WITH THE ISSUANCE OF THE NOTICE ISSUED BY THE JOINT COMMISSIONER TO THE ASSE SSEE TO WHICH HE HAS FILED HIS REPLY.' 4. THE ABOVE JUDGMENT REFLECTS THE 'DEPARTMENTAL VI EW'. ACCORDINGLY, THE ASSESSING OFFICERS (BELOW THE RANK OF JOINT COM MISSIONER OF INCOME TAX) MAY BE ADVISED TO MAKE A REFERENCE TO THE RANG E HEAD, REGARDING ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 6 ANY VIOLATION OF THE PROVISIONS OF SECTION 269SS AN D SECTION 269T OF THE ACT, AS THE CASE MAY BE, IN THE COURSE OF THE ASSES SMENT PROCEEDINGS (OR ANY OTHER PROCEEDINGS UNDER THE ACT). THE ASSES SING OFFICER, (BELOW THE RANK OF JOINT COMMISSIONER OF INCOME TAX) SHALL NOT ISSUE THE NOTICE IN THIS REGARD. THE RANGE HEAD WILL ISSUE TH E PENALTY NOTICE AND SHALL DISPOSE/COMPLETE THE PROCEEDINGS WITHIN THE L IMITATION PRESCRIBED UNDER SECTION 275(1)(C) OF THE ACT. 5. WHERE ANY HIGH COURT DECIDES THIS ISSUE CONTRARY TO THE 'DEPARTMENTAL VIEW', THE 'DEPARTMENTAL VIEW' THEREO N SHALL NOT BE OPERATIVE IN THE AREA FALLING IN THE JURISDICTION O F THE RELEVANT HIGH COURT. HOWEVER, THE CCIT CONCERNED SHOULD IMMEDIATE LY BRING THE JUDGMENT TO THE NOTICE OF THE CENTRAL TECHNICAL COM MITTEE. THE CTC SHALL EXAMINE THE SAID JUDGMENT ON PRIORITY TO DECI DE AS TO WHETHER FILING OF SLP TO THE SUPREME COURT WILL BE ADEQUATE RESPONSE FOR THE TIME BEING OR SOME LEGISLATIVE AMENDMENT IS CALLED FOR. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE LD CIT(A), THE ASSESSEE HAS DRAWN SUPPORT FROM TWO DECISIONS OF TH E HONBLE RAJASTHAN HIGH COURT IN CASE OF HISSARIA BROS REPOR TED IN 291 ITR 244 AND SUBSEQUENT DECISION IN CASE OF JITENDRA SINGH R ATHORE REPORTED IN 352 ITR 327 WHICH HAS CONSIDERED THE EARLIER DECISI ON. WE REFER TO THE LEGAL PROPOSITION WHICH HAS BEEN LAID DOWN BY THE H ONBLE RAJASTHAN HIGH COURT DECISION IN CASE OF JITENDRA SINGH RATHO RE AS UNDER: 7. AFTER HAVING GIVEN THOUGHTFUL CONSIDERATION TO THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT AND HAVING EXAMINED THE RECORD, WE ARE ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 7 CLEARLY OF THE VIEW THAT THIS APPEAL REMAINS MERITL ESS AND THE FORMULATED QUESTION DESERVES TO BE ANSWERED AGAINST THE APPELLANT PARTICULARLY FOR THE VIEW ALREADY TAKEN BY THIS COU RT IN THE CASE OF CIT V. HISSARIA BROS. [2007] 291 ITR 244/[2008] 169 TAXMAN 262 , WHEREIN, THIS COURT HAS SPECIFICALLY HELD AS UNDER:- '38. WE ARE, THEREFORE, OF THE OPINION THAT SINCE P ENALTY PROCEEDINGS FOR DEFAULT IN NOT HAVING TRANSACTIONS THROUGH THE BANK AS REQUIRED UNDER SECTIONS 269SS AND 269T ARE NOT RELATED TO THE ASSE SSMENT PROCEEDING BUT ARE INDEPENDENT OF IT, THEREFORE, THE COMPLETIO N OF APPELLATE PROCEEDINGS ARISING OUT OF THE ASSESSMENT PROCEEDIN GS OR THE OTHER PROCEEDINGS DURING WHICH THE PENALTY PROCEEDINGS UN DER SECTIONS 271D AND 271E MAY HAVE BEEN INITIATED HAS NO RELEVANCE F OR SUSTAINING OR NOT SUSTAINING THE PENALTY PROCEEDINGS AND, THEREFO RE, CLAUSE (A) OF SUB-SECTION (1) OF SECTION 275 CANNOT BE ATTRACTED TO SUCH PROCEEDINGS. IF THAT WERE NOT SO CLAUSE (C) OF SECTION 275(1) WO ULD BE REDUNDANT BECAUSE OTHERWISE AS A MATTER OF FACT EVERY PENALTY PROCEEDING IS USUALLY INITIATED WHEN DURING SOME PROCEEDINGS SUCH DEFAULT IS NOTICED, THOUGH THE FINAL FACT FINDING IN THIS PROCEEDING MA Y NOT HAVE ANY BEARING ON THE ISSUES RELATING TO ESTABLISHING DEFA ULT E.G. PENALTY FOR NOT DEDUCTING TAX AT SOURCE WHILE MAKING PAYMENT TO EMP LOYEES, OR CONTRACTOR, OR FOR THAT MATTER NOT MAKING PAYMENT T HROUGH CHEQUE OR DEMAND DRAFT WHERE IT IS SO REQUIRED TO BE MADE. EI THER OF THE CONTINGENCIES DOES NOT AFFECT THE COMPUTATION OF TA XABLE INCOME AND LEVY OF CORRECT TAX ON CHARGEABLE INCOME; IF CLAUSE (A) WAS TO BE INVOKED, NO NECESSITY OF CLAUSE (C) WOULD ARISE.' ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 8 8. IN THE PRESENT CASE, THE NOTICE FOR ISSUANCE OF THE PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT FOR THE A LLEGED CONTRAVENTION OF PROVISIONS OF SECTION 269SS WAS IS SUED TO THE ASSESSEE, OF COURSE BY THE AO, ON 25.03.2003. EVEN IF THE MATTER HAD OTHERWISE BEEN IN APPEAL BEFORE THE CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDER AND THE APPEAL WAS DECIDED ON 13.0 2.2004, THE SAME WAS HARDLY OF RELEVANCE SO FAR THE PENALTY PROCEEDI NGS UNDER SECTION 271D WERE CONCERNED. AS HELD BY THIS COURT IN HISSA RIA BROS. (SUPRA), COMPLETION OF APPELLATE PROCEEDINGS ARISING OUT OF ASSESSMENT PROCEEDINGS HAS NO RELEVANCE OVER SUSTAINING SUCH P ENALTY PROCEEDINGS. AS HELD CLEARLY BY THIS COURT, IN SUCH A MATTER, CL AUSE (C) OF SECTION 275 (1) WOULD BE APPLICABLE. SECTION 275(1)(C) COULD BE NOTICED AS UNDER:- '275. BAR OF LIMITATION FOR IMPOSING PENALTIES. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED- ..... (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINA NCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FR OM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER.' 9. IN THE PRESENT CASE, THE FIRST SHOW CAUSE NOTICE FOR INITIATION OF PROCEEDINGS WAS ISSUED BY THE AO ON 25.03.2003 AND WAS SERVED ON THE ASSESSEE ON 27.03.2003. OBVIOUSLY, THE LATER PE RIOD ALSO EXPIRED ON 30.09.2003 WHEN SIX MONTHS EXPIRED FROM THE END OF THE MONTH IN WHICH THE ACTION FOR IMPOSING THE PENALTY WAS INITI ATED. THE ORDER AS ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 9 PASSED BY THE JOINT COMMISSIONER OF INCOME TAX FOR THE PENALTY UNDER SECTION 271D ON 28.05.2004 WAS CLEARLY HIT BY THE B AR OF LIMITATION AND HAS RIGHTLY BEEN SET ASIDE IN THE ORDERS IMPUGNED. 10. IN VIEW OF THE ABOVE, OUR ANSWER TO THE FORMULATED QUESTION OF LAW IS THAT EVEN WHEN THE AUTHORITY COMPETENT TO IMPOSE PENALTY UNDER SECTION 271D WAS THE JOINT COMMISSION ER, THE PERIOD OF LIMITATION FOR THE PURPOSE OF SUCH PENALT Y PROCEEDINGS WAS NOT TO BE RECKONED FORM THE ISSUE O F FIRST SHOW CAUSE BY THE JOINT COMMISSIONER; BUT THE PERIO D OF LIMITATION WAS TO BE RECKONED FROM THE DATE OF ISSU E OF FIRST SHOW CAUSE FOR INITIATION OF SUCH PENALTY PROCEEDIN GS. FOR THE PURPOSE OF PRESENT CASE, AS OBSERVED HEREINABOVE, F OR THE PROCEEDINGS HAVING BEEN INITIATED ON 25.03.2003, THE ORDER PASS ED BY THE JOINT COMMISSIONER UNDER SECTION 271D ON 28.05.2004 WAS H IT BY THE BAR OF LIMITATION. THE CIT(A) AND THE TRIBUNAL HAVE, THUS, NOT COMMITTED ANY ERROR IN SETTING ASIDE THE ORDER OF PENALTY. (EMPH ASIS SUPPLIED) 5. IN LIGHT OF LEGAL PROPOSITION LAID DOWN BY THE H ONBLE HIGH COURT, WE NOW REFER TO THE ORDER OF THE LD CIT(A) TO EXAMINE WHETHER HIS FINDINGS ARE ALIGNED TO THE STATED LEGAL PROPOSITION OR NOT . THE RELEVANT FINDINGS OF THE LD CIT(A) ARE REPRODUCED AS UNDER:- FROM THE FACTS INVOLVED IN THE PRESENT CASE IT IS SEEN THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 19.10.2014 B Y ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1 KOTA WHEREBY H E HAD MENTIONED IN THE ASSESSMENT ORDER AS UNDER- ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 10 IT MAY BE NOTED THAT THE LOAN ENTRIES HAVE BEEN CO NSIDERED IN ANNEXURES-1, 2 & 5 OF AUDIT REPORT ARE BEING REFERR ED FOR PENAL PROCEEDINGS UNDER SECTION 269 SS AND 269T TO THE AD DITIONAL/JOINT CIT SEPARATELY. A PERUSAL OF THE ASSESSMENT FOLDER SHOWS A LETTER D ATED 03/11/2014 WRITTEN BY ACIT CIRCLE-2, TRANSFERRING THE CASE TO ACIT CIRCLE 1, KOTA U/120 WHEREBY HE HAS MENTIONED THAT- PENALTY PROCEEDINGS INITIATED U/S 269SS & 269T OF THE IT ACT, 1961 IN A.Y. 2011-12, INFORMATION TO BE PASSED TO ADDL CIT, RANGE-1 KOTA BY YOU FOR TAKING FURTHER NECESSARY ACTION THE INTIMATION RECORDED BY THE ACIT CIRCLE 1 TO THE ADDL. CIT RANGE-1 IMPOSITION OF PENALTY WAS ON 25-03-2015 AS PER THE PENALTY IMPOSITION ORDER OF THE ADDL CIT AND THE FIRST NOTICE WAS ISSU ED BY THE ADDL. CIT ON 23-04-2015. THE ORDER WAS FINALLY PASSED ON 29/1 1/2015. IN VIEW OF THE ABOVE IT HAS BEEN ARGUED THAT THE PE NALTY IMPOSED BY THE ADDL CIT RANGE-1, KOTA IN THIS CASE WAS BEYOND THE LIMITATION PROVIDED IN THE ACT. HOWEVER, SINCE THERE IS NO FOR MAL NOTICE ISSUED BY THE A.O. AS SEEN FROM THE RECORD, IT IS HELD THAT T HE FIRST NOTICE WAS ISSUED NOT BY THE A.O. BUT BY THE ADDL CIT ONLY ON 23-04-2015 AND HE HAS PASSED THE ORDER ON 29/10/2015 WHICH IS WITHIN 6 MONTHS PERIOD AS PER SECTION 275(1)(C). ON THIS BASIS ITSELF, THE PE NALTY ORDER CANNOT BE ON FAULTED ON LEGAL GROUNDS AND IS HELD TO BE VALID . ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 11 6. IN LIGHT OF ABOVE FINDINGS OF THE LD CIT(A) WHIC H REMAIN UNDISPUTED BEFORE US, IT IS CLEAR THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO HAS STATED THAT MATTER RELATING TO PENALTY P ROCEEDINGS IN RESPECT OF VIOLATION OF SECTION 269SS AND 269T ARE BEING RE FERRED TO THE ADDITIONAL/JOINT CIT. IN OTHER WORDS, THE AO DIDN T INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271D AND SECTION 271E DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. THERE IS NO MENTION OF SUC H PROCEEDINGS BEING INITIATED BY THE AO IN THE ASSESSMENT ORDER. FURTHER, THERE IS NO NOTICE UNDER SECTION 271D AND SECTION 271E WHICH HA S BEEN ISSUED BY THE AO TO THE ASSESSEE BY VIRTUE OF WHICH SUCH PENA LTY PROCEEDINGS CAN BE SAID TO HAVE BEEN INITIATED. IN LIGHT OF THE SA ME, WE ARE UNABLE TO ACCEDE TO THE CONTENTION OF THE ASSESSEE THAT THE D ATE OF PASSING OF THE ASSESSMENT ORDER SHOULD BE RECKONED AS THE DATE OF INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271D AND SECTION 271E OF THE ACT. THE SAID VIEW IS IN CONSONANCE WITH THE DECISION OF THE HON BLE RAJASTHAN HIGH COURT IN CASE OF HISSARIA BROS (SUPRA) AND SUBSEQUE NT DECISION IN CASE OF JITENDRA SINGH RATHORE (SUPRA). WE ACCORDINGLY A FFIRM BOTH THE ORDER OF THE LD CIT(A) ON THIS GROUND AND HOLD THAT THE P ENALTY ORDERS PASSED UNDER SECTION 271D AND SECTION 271E WERE NOT BARRED BY LIMITATION. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ACCO RDINGLY DISMISSED. 7. NOW, COMING TO THE MERITS OF THE CASE FOR LEVY O F PENALTY, WE REFER TO THE FINDINGS OF THE ADDL. CIT WHICH ARE CONTAINED A T PARA 6 TO 11 OF THE PENALTY ORDER. THE ADDL. CIT HAS REFERRED TO THE SP ECIFIC TRANSACTIONS HIGHLIGHTED BY THE SPECIAL AUDITOR WHICH ARE IN TUR N BASED ON ANNEXURE A2/22 IMPOUNDED DURING THE COURSE OF SURVEY U/S 133 A OF THE ACT, THE SAID TRANSACTIONS WERE NOT DISPUTED BY THE ASSESSEE , AT THE SAME TIME IT WAS CONTENDED THAT THESE ADVANCES WERE GIVEN TO STA FF, LABOUR AND SUB- CONTRACTOR, IN THE COURSE OF ITS BUSINESS FOR MEETI NG VARIOUS EXPENSES AT VARIOUS PROJECT SITES. THE ADDL. CIT HOWEVER DID NO T AGREE TO THE ASSESSEES CONTENTION AND HELD THAT ASSESSEE HAS AC CEPTED LOAN, DEPOSIT IN CASH IN VIOLATION OF SECTION 269SS OF THE ACT WI THOUT ANY REASONABLE CAUSE. ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 12 8. WE NOW REFER TO THE RELEVANT FINDINGS OF THE LD CIT(A) WHICH ARE REPRODUCED AS UNDER: AS REGARDS GROUND OF APPEAL NO. 2, ON THE MERITS O F THE ISSUE AND THE FACTS INVOLVED, IT IS SEEN THAT THE ENTIRE ORDER OF THE ADDL CIT IS BASED AROUND ANNEXURE A2/22, IMPOUNDED DURING THE SURVEY PROCEEDING. IN THE ASSESSMENT RELATED APPEAL, I HAVE HELD THAT- DISCREPANCIES SHOWN IN THE BOOKS OF ACCOUNTS VIS-A- VIS LOOSE SHEETS WERE PRECISELY THE REASON WHY THE BOOKS OF ACCOUNTS WERE NOT CONSIDERED PROPERLY MAINTAINED AND RECONCILABLE, HE NCE REJECTED AND THIS ACTION OF THE A.O. HAD BEEN UPHELD. ONCE BOOKS HAD BEEN REJECTED THESE COULD NOT BE RELIED UPON FOR MAKING SUCH ADDI TIONS/IMPOSING PENALTY FOR CREDIT ENTRIES. (MEANING DOES THE A.O. ACCEPT THAT THOSE TRANSACTIONS WERE ALL RECORDED SO AS TO FALL WITHIN PROVISION OF SEC. 271D?) THE QUESTION WHICH NEEDS TO BE ADDRESSED HERE IS TH AT IF THE ORIGINAL DOCUMENTS WERE RELIABLE, THEN WHY THE A.O. REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED N.P. IN THE COURSE OF ASSESS MENT PROCEEDINGS EVEN AFTER THE SPECIAL AUDIT WAS DONE BY AN INDEPEN DENT AUDITOR? THEREFORE, WHEN THE ADDL CIT IS RELYING ON THE ASSE SSMENT PROCEEDING FROM WHERE THE REFERENCE OF VIOLATION OF PROVISIONS OF SECTION 269SS AND 269T HAVE BEEN INVOKED, HE HAS TO ACKNOWLEDGE THE E STABLISHED LEGAL POSITION THAT ONCE N.P. IN SUCH A CASE HAS BEEN EST IMATED, OTHER ADDITIONS BASED ON THE BOOKS OF ACCOUNTS CANNOT SUR VIVE AND IN THE ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 13 PRESENT APPEAL, THE PENALTY IMPOSED U/S 271D AND 27 1E FOR VIOLATION OF PROVISIONS OF SECTION 269SS AND 269T RESPECTIVELY IS ARISING OUT OF ENTRIES IN THOSE VERY ROUGH BOOKS OF ACCOUNTS. AS PER EXPLANATION FROM THE SUBMISSIONS MADE DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS, IT HAS BEEN CONTE NDED THAT THE PERSONS TO WHOM THE PAYMENTS WERE MADE WERE NOT ONL Y PAID EMPLOYEE (SITE INCHARGES), BUT SUPPLIERS OF MATERIA LS WHO DELIVERED MATERIALS TO SITES, PERSONS FROM WHOM MACHINERIES W ERE HIRED AND SUB CONTRACTORS. THE AMOUNTS WRITTEN IN THESE ROUGH SIT E RECORDS WERE IN THE NATURE OF ADVANCES AND PAYMENTS LINKED TO STAFF & SUBCONTRACTORS & GIVEN IN THE COURSE OF BUSINESS AND WERE NOT LOANS. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD GIVEN AN E NTRY WISE DETAIL OF THE TRANSACTIONS, IN CASH FOR ALL 251 ENTRIES IDENT IFIED BY THE AUDITOR AND THE A.O. OUT OF WHICH EXCLUDED THE ENTRIES BEING LO ANS/DEPOSITS LIABLE FOR ACTION U/S 269SS. IN THE PRESENT CASE, WHILE IMPOSING THE PENALTY U/S 271D/E, THE ADDL CIT HAS IGNORED THE FOLLOWING POINTS INVOLVED- (1) THAT THE ANNEXURE A2/22 IMPOUNDED DURING THE CO URSE OF SURVEY U/S 133A, BASED ON WHICH THE WORKING OF THE ALLEGED LOANS HAS BEEN DONE BY HIM, WERE NEVER ACCEPTED BY THE ASSESSEE AS LOAN ENTRIES, RATHER IT WAS CLAIMED THAT THESE WERE SITE RELATED EXPENSES. FURTHER, THE A.O. HIMSELF IN THE ASSESSMENT PROCEED INGS, CONSIDERED THE BOOKS PRESENTED BY THE ASSESSEE TO BE UNRELIABLE AN D ESTIMATED THE NET ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 14 PROFIT IN THE BUSINESS, WHICH ADDITION MADE WAS CON TESTED IN THE APPEAL ORDER AND THE SAME WAS CONFIRMED BY THE UNDERSIGNED VIDE APPEAL NO. 391/14-15 VIDE ORDER DATED 11/03/2016. THE ADDL. CIT HAS ALSO ACKNOWLEDGED THAT THE DETAIL S SUBMITTED BY THE ASSESSEE DO NOT REFLECT THE TRUE STATE OF AFFAIRS , WHICH IS PRECISELY THE REASON WHY THE BOOKS HAD BEEN REJECTED. THE ASSESSE E WAS NOT CONSIDERED AS BEING UP TO THE MARK IN MAINTAINING T HE PROPER DETAILS OF HIS FINANCIAL ACTIVITIES BUT DUE TO THE SAME REASON , HIS BOOKS WERE REJECTED & PROFITS WERE ESTIMATED. 2. HOW THE ADDL. CIT OR THE A.O. ARRIVED AT THE CON CLUSION THAT THESE PAYMENTS REPRESENTED THE LOANS & ADVANCES IS NOWHER E BROUGHT OUT IN THE PENALTY ORDER. HE HAS MAINLY RELIED ON THE SPEC IAL AUDITORS THEORY THAT THERE WERE DEBIT BALANCES IN FAVOUR OF THE ALL EGED LENDERS IN SUCH ACCOUNTS AT THE START OF THE YEAR AND THESE WERE IN CONTRADICTION TO THE ASSESSEES SUBMISSIONS THAT THE AMOUNTS IN THE ANNE XURE REPRESENTED SITE ADVANCES ETC. HOWEVER, THERE IS NO FINDING IF THE DEBIT BALANCES WERE CARRIED FORWARD FROM EARLIER YEAR OR NOT SINCE MOSTLY THESE PERTAIN TO EARLIER PART OF THE YEAR. FURTHER, THE ADDL. CIT HAS FAILED TO MENTION ANY IN TEREST PAYMENTS APPEARING IN THE ANNEXURE SO AS TO PROVE THAT THESE WERE ACTUALLY LOANS & REPAYMENTS. NO LOANS AND ADVANCES IN THE COURSE O F BUSINESS CAN POSSIBLY BE WITHOUT INTEREST AND IF THESE WERE UNAC COUNTED CASH LOANS, ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 15 THE INTEREST WOULD ALSO BE REFLECTED SOMEWHERE AS T HESE WERE IN ANY CASE ROUGH OR KACHHA BOOKS. THUS, THE VERACITY OF THE BOOKS OF ACCOUNTS THEMSEL VES BEING IN QUESTION, THE ADDL. CIT SHOULD NOT HAVE CONSIDERED THESE ENTRIES TO BE THE BASIS FOR LEVY OF PENALTY U/S 271D ALSO WHEN HE COULD NOT CONCLUSIVELY PROVE THAT THESE ENTRIES ACTUALLY REFL ECTED FIGURES OF LOANS AND REPAYMENTS OF THESE LOANS. 3) IF THESE ARE TREATED AS GENUINE LOANS WHICH THE ADDL. CIT HAS CONCLUDED, HE SHOULD HAVE ASKED FOR THE DETAILS OF THE CREDITORS AND SOUGHT REASONS FOR TAKING THESE LOANS IN CASH IN VI OLATION OF SECTION 269SS AND SIMILARLY FOR REPAYMENT ALSO THE SAME CON DITION SHOULD HAVE BEEN FOLLOWED BEFORE TREATING IT AS VIOLATION OF S ECTION 269T. THE ADDL. CIT DURING THE PROCEEDING U/S 269SS OR 26 9T HAS NOT CROSS EXAMINED THE ABOVE VERSION OF THE ASSESSEE BY ISSUI NG SUMMONS U/S 131 OR COMMISSION U/S 133(6) TO ANY OF THE PERSONS WHOSE NAMES ARE MENTIONED IN THE ANNEXURE. FOR EXAMPLE, THE PAYMENT TO ONE ASHFAQUE WHO IS A SUB-CONTRACTOR, WITH TDS DEDUCTION MENTION ED WAS VERIFIABLE FROM TDS RECORDS, ON WHICH THE ADDL CITS ORDER IS SILENT THOUGH HIS NAME IS INCLUDED IN THE LIST OF LENDERS AS PER THE 271D ORDER. SOME OF THE ENTRIES CONTAINED IN THE ROUGH BOOKS WE RE PAYMENTS OF MATERIAL & SOME WERE CHEQUE PAYMENTS AS WELL. THE A DDL. CIT DID NOT FOLLOW THIS BASIC RULE, THEREBY INDICATING THAT HE WAS HIMSELF NOT CONVINCED THAT THESE LOOSE ANNEXURE RELATED ENTRIES WERE ACTUALLY LOANS ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 16 AS APPEARING IN THE BOOKS OF ACCOUNTS BUT MADE THE ADDITION AND IMPOSED THE PENALTY MECHANICALLY AND JUST FOR THE S AKE OF IT WITHOUT CARRYING OUT CROSS VERIFICATIONS OR INDEPENDENT ENQ UIRIES TO STRENGTHEN HIS FINDINGS THOUGH HE HAD A PERIOD OF 6 MONTHS AT THIS DISPOSAL FOR PASSING THE ORDER. THUS, THE FACT OF ALL THESE CASH PAYMENTS BEING ONL Y FOR LOAN & ADVANCES IS NOT ESTABLISHED BEYOND DOUBT. ON THE BASIS OF THE ABOVE, IT IS CONCLUDED THAT THE ADDL. CIT HAS JUST REACHED CONCLUSIONS. HALF-BAKED ADDITIONS NOT BASED ON ENQUIRIES CANNOT BE SUSTAINED IN APPELLATE PROCEEDINGS. NO PR ESUMPTIONS BASED FINANCIAL LIABILITIES CAN BE LEVIED UPON THE ASSESS EE. HIGH COURT OF DELHI IN COMMISSIONER OF INCOME-TAX ( CENTRAL)II V. HOME DEVELOPERS (P.) LTD. 54 TAXMANN.COM 159 (DE LHI) HAS HELD THAT- SECTION 69C OF THE INCOME-TAX ACT, 1961-UNEXPLAINED EXPENDITURE (INTEREST)- ASSESSMENT YEAR 2004-05- IN COURSE OF A SSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSE E HAD TAKEN CERTAIN LOAN IN CASH FOR PURPOSE OF PROPERTY- HE THUS MADE ADDITION IN RESPECT OF INTEREST PAID ON SAID LOAN IN CASH UNDER SECTION 69C-TRIBUNAL SET ASIDE SAID ADDITION- IT WAS NOTED THAT REVENUE HAD NOT FILED ANY DOCUMENT OR MATERIAL TO SHOW THAT IN FACT LOAN WAS TAKEN AND INTEREST PAYMENT WAS MADE-MOREOVER, PERSONS TO WHOM INTEREST WAS PAID, THEIR DETAILS AND PARTICULARS WERE NOT ASCERTAINED VERIFI ED AND EXAMINED- ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 17 WHETHER IN AFORESAID CIRCUMSTANCES, TRIBUNAL WAS JU STIFIED IN DELETING IMPUGNED ADDITION- HELD, YES [ PARA9][IN FAVOUR OF ASSESSEE] SECTION 269SS, READ WITH SECTION 269T, OF THE INCOM E-TAX ACT, 1961- DEPOSITS MODE OF TAKING/ACCEPTING (PENALTY)- ASSES SMENT YEAR 2004- 05- WHETHER IN VIEW OF FACTS STATED UNDER HEADING UNEXPLAINED EXPENDITURE, ASSESSING OFFICER WAS NOT JUSTIFIED I N PASSING PENALTY ORDER HOLDING THAT ASSESSEE HAD TAKEN LOAN IN CASH IN VIOLATION OF PROVISIONS OF SECTION 269SS-HELD, YES ON THE FACTS INVOLVED, IT WAS NOTED THAT TRIBUNAL H AS RECORDED A FINDING THAT THE ALLEGATION THAT LOANS/DEPOSITS MUST HAVE B EEN TAKEN IN CASH WAS A MERE SUSPICION, WHICH COULD HAVE BEEN A CAUSE FOR FURTHER VERIFICATION AND INVESTIGATION, BUT MERE SUSPICION CANNOT BE A GROUND TO HOLD THAT LOAN/DEPOSITS WERE RECEIVED IN CASH. THE FINDINGS OF THE TRIBUNAL WERE NOT PERVERSE. FURTHER, THE REVENUE HAS NOT FILED ANY DOCUMENT OR MATERIAL TO SHOW THAT IN FACT LOAN WAS TAKEN AND INTEREST PAYMENT WA S MADE. THE PERSONS TO WHOM ALLEGEDLY INTEREST WAS PAID, THEIR DETAILS AND PARTICULARS WERE NOT ASCERTAINED, VERIFIED AND EXAM INED. (RELEVANT PART) ..IF REVENUE WANTED TO TAKE THE VIEW THAT THE NOTIN G ON THE LOOSE PAPERS IS WITH REGARD TO LOAN TAKEN BY THE ASSESSEE , THEN THE BURDEN WAS UPON THE REVENUE TO ESTABLISH SO. HOWEVER, THE ASSESSING OFFICER DID NOTHING EXCEPT TO MAKE SERIOUS OF PRESUMPTIONS AND THEN MADE THE ADDITION AND LEVIED THE PENALTY ON THE BASIS OF HIS PRESUMPTIONS. WE ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 18 FIND THAT SIMILAR SITUATION WAS DEALT WITH BY THE I TAT WHILE CONSIDERING THE REVENUES APPEAL FOR PENALTY FOR AY 2001-02, 20 02-03 & 2003-04 AND THE ITAT HAS HELD THAT THE DOCUMENT DOES NOT IN DICATE THAT THE ASSESSEE HAS ACCEPTED LOAN OR DEPOSIT FROM ANY OTHE R PERSON. THE NAME OF THE ASSESSEE IS COMPLETELY ABSENT FROM THE SAID DOCUMENT. IDENTICAL IS THE SITUATION IN THE YEARS UNDER APPEA L BEFORE US. NONE OF THE DOCUMENTS INDICATE THAT THE ASSESSEE I.E. M/S H OME DEVELOPERS (P) LTD. HAS TAKEN ANY LOAN OR DEPOSIT FROM ANY OTHER P ERSON. THE ABOVE FINDING OF THE ITAT HAS BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THOUGH THERE IS A DOUBT BUT IT IS N OT ESTABLISHED THAT THE RESPONDENT ASSESSEE HAD TAKEN LOAN/DEPOSIT IN CASH. THEIR LORDSHIPS FURTHER OBSERVED THAT THERE IS SUSPICION BUT THIS A LONE WITHOUT ANY FURTHER VERIFICATION AND INVESTIGATION CANNOT JUSTI FY THE FINDING THAT THE RESPONDENT-ASSESSEE HAD TAKEN LOAN/DEPOSIT IN CASH. WITH THESE OBSERVATIONS, THEIR LORDSHIPS UPHELD THE FINDING OF THE ITAT. IN OUR OPINION, THE ABOVE OBSERVATION OF THEIR LORD SHIPS OF THE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FO R AY. 2000-01 TO 2003-04 WOULD BE SQUARELY APPLICABLE IN THE YEARS U NDER APPEAL ALSO. IN THESE YEARS ALSO, AT THE MOST, IF CAN BE THE DOUBT OF THE ASSESSING OFFICER THAT UNACCOUNTED TRANSACTIONS ARE IN THE NA TURE OF THE LOAN TAKEN. HOWEVER, THE DOUBT OR SUSPICION OF THE ASSES SING OFFICER IS NOT ENOUGH TO HOLD THAT THE ASSESSEE HAD TAKEN LOAN/DEP OSIT IN CASH. MOREOVER, IN THE YEARS UNDER APPEAL, THE ASSESSING OFFICER MADE FURTHER PRESUMPTIONS THAT THERE WAS REPAYMENT OF LOAN IN CA SH THOUGH THERE IS NO SUCH NOTING ON THE LOOSE PAPER. IN OUR OPINION, THE FINDING OF THE ITAT AS WELL AS HONBLE JURISDICTIONAL HIGH COURT I N AY 2000-01 TO 2003- ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 19 04 WOULD BE SQUARELY APPLICABLE TO THE YEARS UNDER APPEAL. WE FURTHER HOLD THAT WHEN IT IS NOT ESTABLISHED THAT THE ASSES SEE HAD TAKEN LOAN OR DEPOSIT, THE QUESTION OF FURTHER PRESUMPTION THAT S UCH LOAN OR DEPOSIT WAS REPAID DURING THE YEAR UNDER CONSIDERATION WAS WITHOUT ANY BASIS OR MATERIAL ON RECORD. 4) IF THE ADDL CIT THOUGHT THESE WERE LOANS PER SE, EVEN OTHERWISE HE SHOULD HAVE APPLIED FIRST THE PROVISIONS OF SECTION 68 TO VERIFY THESE CREDITS AS TO WHETHER THESE WERE GENUINE OR NOT. TH E ADDITION SHOULD THEN HAVE BEEN MADE U/S 68 AS UNEXPLAINED WHICH WAS NOT DONE, THEREBY LEADING TO CONCLUSION THAT THESE ENTRIES WE RE EXPLAINED. 5) IN A BALANCE SHEET WHICH IS PART OF THE ASSESSME NT RECORD (DATED 29/02/2011), THERE IS A SITE INCHARGE/CASH/WIP OF R S. 40 LAKHS SHOWN BY THE ASSESSEE ON THE ASSET SIDE, ON WHICH THE ADD L CIT HAS NOT COMMENTED UPON BUT THE SPECIAL AUDITOR HAS ACCEPTED IN HIS AUDIT REPORT COMMENTS THOUGH HE HAS FURTHER ADDED THAT IT IS NOT VERIFIABLE FROM THE SEIZED RECORDS. THUS THE ASSESSEES STAND ON THE ADVANCES FOR SITE TO VARIOUS PERSONS WAS PUT FORTH IN THE ASSESS MENT PROCEEDING AS WELL BUT NOT CONSIDERING THOUGH NOT CONTROVERTED WI TH ENQUIRIES BY THE ADDL CIT. 6) THE ADDL CIT OR THE A.O. HAVE NOT MADE OUT A CAS E THAT THERE WERE UNACCOUNTED RECEIPTS. IF THESE WERE LOANS IN THE BO OKS, WHETHER THESE WERE SQUARED UP OR NOT? IF NOT THEN WERE THERE OUTS TANDING BALANCES IN THE BALANCE SHEET WHICH WOULD CONFIRM THE STAND TAK EN THE DEPARTMENT? ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 20 THUS IT CAN BE SEEN THAT THERE ARE INHERENT CONTRAD ICTIONS IN THE FINDINGS REACHED BY THE ADDL CIT WHILE PASSING THE ORDERS U/S 271D & 271E IN THIS CASE. IT IS TO BE NOTED THAT FOR A TRANSACTION TO BE TERM ED AS LOAN OR-DEPOSIT WITHIN THE MEANING OF SECTION 269SS OF THE ACT, THE RE SHOULD BE TWO ENTITIES OR PERSONS NAMELY LENDER AND BORROWER OR D EPOSITOR AND RECIPIENT IN THE INSTANT CASE SINCE THE IDENTITY OF THE LENDERS WERE NOT EXAMINED BY THE A.O., THESE TRANSACTIONS CANNOT BE TERMED AS LOANS OR DEPOSITS, HENCE OUTSIDE THE PURVIEW OF SECTION 269S S OF THE INCOME-TAX ACT, 1961. IF THE TRANSACTION DOES NOT FALL WITHIN THE MEANING OF LOAN OR DEPOSIT, THERE IS NO VIOLATION OF SECTION 269SS OF THE INCOME-TAX ACT, 1961. (CIT VS. IDHYAM PUBLICATIONS LTD.) IT IS PERTINENT TO MENTION HERE THAT THE ADDL CIT I N THE ORDER LEVYING PENALTY HAS NOT COMMENTED ON THE IDENTITY OF THE LE NDERS/DEPOSITORS AND THEIR SOURCES. THE MUMBAI B BENCH OF THE TRIBUNAL IN THE CASE OF KARNATAKA GINNING & PROCESSING FACTORY V. N. CIT (2001) 72 TTJ (MUMBA I) 307: (2001) 77ITD 478 (MUMBAI), AT P. 478, HELD AS FOLLOWS:- QUITE APART FROM THE QUESTION OF EXISTENCE OF REASONABLE CAUSE, WE ARE N OT SURE WHETHER THE AMOUNTS RECEIVED BY THE ASSESSEE FROM VE CAN BE TER MED AS LOAN OR DEPOSITS. THE WORDS ARE NOT DEFINED IN THE EXPLN. (III) BELOW SECTION 269SS EXCEPT SAYING THAT LOANS OR DEPOSITS MEANS LOAN OR DEP OSIT OF MONEY. THE ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 21 TERMS LOAN AND DEPOSITS ARE NOT MUTUALLY EXCLUS IVE THERE ARE A NUMBER OF COMMON FEATURES BETWEEN THE TWO. IT WAS H ELD BY THE MADRAS HIGH COURT IN ABDUL HAMID SAHIB U. RAHMAT BI AIR 1965 MAD 427, THAT A LOAN IS REPAYABLE THE MOMENT IT IS INCU RRED WHILE IT IS NOT SO WITH THE DEPOSIT. IN A DEPOSIT, UNLIKE A LOAN, THER E IS NO IMMEDIATE OBLIGATION TO REPAY. NORMALLY A DEPOSIT IS FOR FIXE D TENURE. THE AMOUNTS TAKEN BY THE ASSESSEE IN THE PRESENT CASE FROM VE A RE TEMPORARY ADVANCES AND THERE IS NO EVIDENCE THAT THERE WAS AN Y STIPULATION AS TO THE PERIOD OR ANY STIPULATION FOR INTEREST. IT IS, THEREFORE, A MATTER OF GRAVE DOUBT AS TO WHETHER THE AMOUNT RECEIVED FROM VE CAN BE CHARACTERIZED AS LOANS OR DEPOSITS. IN OUR VIEW, TH EY CAN BE MORE APPROPRIATELY REFERRED TO AS TEMPORARY ADVANCES. SU CH TEMPORARY ADVANCES ARE OUTSIDE THE PURVIEW OF SECTION 269SS. THUS IN OUR CONSIDERED OPINION AND IN VIEW OF THE VARIOUS JUDIC IAL PRONOUNCEMENTS ON THIS MATTER, WE HOLD THAT THE TRANSACTION OF THI S CASE ON HAND CANNOT BE CONSIDERED AS LOAN SO AS TO ATTRACT SECTION 26 9SS AND SECTION 271D OF THE ACT. THE ASSESSEE HAS ALL ALONG BEEN DENYING THESE AS LO ANS AND DEPOSITS AND SUBSEQUENT REPAYMENTS WORKED OUT BY THE A.O. & ADDL CIT. HE HAS BEEN PLEADING THAT THESE ARE ADVANCES FOR SITES, TO SUB-CONTRACTORS AND FOR PURCHASES ETC. THUS, APPLYING THE RATIO OF THE ABOVE DECISION IN THE APPELLANTS CASE, THESE TEMPORARY ADVANCES AND RETU RNS MOBILIZED BY THE ASSESSEE FOR ITS SITES CANNOT BE TERMED AS LOAN OR DEPOSIT SO AS TO ATTRACT VIOLATION COMMITTED UNDER SECTION 269SAS AN D SECTION 271D OF THE ACT. ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 22 UNDER THE FACTS & CIRCUMSTANCES AS DISCUSSED ABOVE AND THE LEGAL PRECEDENTS AVAILABLE IN THIS REGARD, IT IS HELD THA T THE ORDER OF THE ADDL CIT WAS BASED ON PRESUMPTIONS, UNSUSTAINABLE ON FAC TS AND IN LAW. THUS, IN THE ABSENCE OF ANY COGENT BASIS FOR THE FI NDINGS AS WELL AS ABSENCE OF ANY MATERIAL INDEPENDENT VERIFICATION TO ESTABLISH THAT THE AMOUNTS MENTIONED IN THE LOOSE PAPERS LISTED AS ANN EXURE A-2/22 REPRESENTING ACCEPTANCE AND REPAYMENT OF LOANS/ DEP OSITS CONTRAVENTION OF THE PROVISIONS CONTAINED IN SECTIO N 269SS/T OF THE ACT, 1961, I AM NOT ABLE TO SUSTAIN THE FINDINGS OF THE ADDL CIT IN IMPOSING PENALTY U/S 271D/E IN THIS CASE FOR CONTRAVENTION O F THE PROVISIONS OF SECTION 269SS/269T RESPECTIVELY. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, THE LD CIT(A) HAS HEL D THAT WHERE THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED AND THE ADDL C IT IS RELYING ON THE ASSESSMENT PROCEEDING FROM WHERE THE REFERENCE OF V IOLATION OF PROVISIONS OF SECTION 269SS AND 269T HAVE BEEN INVO KED, HE HAS TO ACKNOWLEDGE THE ESTABLISHED LEGAL POSITION THAT ONC E N.P. IN SUCH A CASE HAS BEEN ESTIMATED, OTHER ADDITIONS BASED ON THE BO OKS OF ACCOUNTS CANNOT SURVIVE AND IN THE PRESENT APPEAL, THE PENAL TY IMPOSED U/S 271D AND 271E FOR VIOLATION OF PROVISIONS OF SECTION 269 SS AND 269T RESPECTIVELY IS ARISING OUT OF ENTRIES IN THOSE VER Y ROUGH BOOKS OF ACCOUNTS. IN OTHER WORDS, WHERE THE BOOKS OF ACCOU NTS HAVE BEEN REJECTED AND NET PROFIT HAS BEEN ESTIMATED, THERE C ANNOT BE ANY OTHER ADDITION AND CONSEQUENT PENALTY CONSEQUENCES IN THE HANDS OF THE ASSESSEE. IN OUR VIEW, WHAT HAS TO BE EXAMINED IS THE NATURE OF THE TRANSACTIONS AND THE LINKAGE THEREOF. IN THE INSTA NT CASE, THE BOOKS OF ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 23 ACCOUNTS HAVE BEEN REJECTED AND NET PROFIT HAS BEEN ESTIMATED IN RELATION TO TRANSACTIONS UNDERTAKEN BY THE ASSESSEE IN RELATION TO ITS BUSINESS OF CIVIL CONSTRUCTION. THEREFORE, THE TRA NSACTIONS WHICH IMPACT THE NET PROFIT FROM THE CONSTRUCTION ACTIVITY UNDER TAKEN BY THE ASSESSEE DURING THE YEAR ARE UNDER CONSIDERATION OF THE AO A ND THE AO NOT SATISFIED WITH SUCH DETERMINATION OF NET PROFIT, HA S REPLACED NET PROFIT BASED ON HIS UNDERSTANDING AND MATERIAL AVAILABLE O N RECORD. BUT WHERE THERE ARE TRANSACTIONS WHICH ARE NOT CONNECTE D TO THE DETERMINATION OF NET PROFIT AND ARE NOT REFLECTED I N THE PROFIT/LOSS ACCOUNT AND ARE BASICALLY STAND ALONE BALANCE SHEET TRANSACTIONS OR TRANSACTIONS WHICH HAVE NOT BEEN RECORDED IN THE BO OKS OF ACCOUNTS AT ALL BUT LATER ON ACKNOWLEDGED, CAN IT BE SAID THAT EVEN THOSE TRANSACTIONS CANNOT BE EXAMINED BY THE AO. IN THE INSTANT CASE, BASED ON REPORT OF THE SPECIAL AUDITOR AND AS REPORTED IN ANNEXURE 1, 2 &5 OF THE AUDIT REPORT AND EXAMINATION DURING THE COURSE OF PENALTY PROCEEDINGS, THE ADDITIONAL CIT HAS HELD THAT THERE ARE SPECIFIC FINANCIAL TRANSACTIONS IN THE NATURE OF LOANS AND DEPOSITS WH ICH ARE EITHER NOT RECORDED AT ALL OR NOT FULLY RECORDED AND WHICH ATT RACT THE PROVISIONS OF SECTION 269SS/269T. IN OUR VIEW, THE SAID ACTION O F THE ADDITIONAL CIT IS NOT VITIATED MERELY ON THE GROUND THAT THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED AND NET PROFIT HAS BEEN ESTIMATED BY THE AO PROVIDED IT CAN BE PROVED THAT THESE ARE INDEPENDENT FINANCIAL TRANSACTIONS NOT CONNECTED WITH THE TRANSACTIONS IN RESPECT OF WHICH THE NET PROFIT HAS BEEN ESTIMATED BY THE AO. IN SUPPORT, USEFUL REFE RENCE CAN BE DRAWN TO THE LEGAL PROPOSITION LAID DOWN BY THE HONBLE S UPREME COURT DECISION IN CASE OF KALE KHAN MOHAMMAD HANIF VS CIT REPORTED IN 50 ITR 1 AND WHICH HAS BEEN FOLLOWED BY THE HONBLE SUPREME COURT ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 24 IN ITS SUBSEQUENT DECISION IN CASE OF CIT VS DEVI PRASAD VISHWANATH REPORTED IN 72 ITR 194 WHEREIN IT WAS HELD AS UNDER: THERE IS NOTHING IN LAW WHICH PREVENTS THE ITO IN AN APPROPRIATE CASE IN TAXING BOTH THE CASH CREDIT, THE SOURCE AND NATU RE OF WHICH IS NOT SATISFACTORILY EXPLAINED AND THE BUSINESS INCOME ES TIMATED BY HIM UNDER SECTION 13 AFTER REJECTING THE BOOKS OF ACCOU NTS OF THE ASSESSEE AS UNRELIABLE. WHETHER IN A GIVEN CASE, THE ITO MAY TAX THE CASH CREDIT ENTERED IN THE BOOKS OF ACCOUNT OF THE BUSINESS AND AT THE SAME TIME, ESTIMATE THE PROFIT MUST HOWEVER DEPEND UPON THE FA CTS OF EACH CASE. 10. IN LIGHT OF ABOVE, WE DONOT AGREE WITH THE VIEW OF THE LD CIT(A) THAT WHERE THE VERACITY OF THE BOOKS OF ACCOUNTS TH EMSELVES BEING QUESTION, THE ADD. CIT SHOULD NOT HAVE CONSIDERED T HESE ENTRIES TO BE THE BASIS FOR LEVY OF PENALTY U/S 271D. 11. WE NOW REFER TO THE OTHER FINDINGS OF THE LD CI T(A) WHICH ARE UNDER CHALLENGE BEFORE US. THE LD CIT(A) HAS HELD THAT T HE ANNEXURE A2/22 IMPOUNDED DURING THE COURSE OF SURVEY U/S 133A, BAS ED ON WHICH THE WORKING OF THE ALLEGED LOANS HAS BEEN DONE BY HIM, WERE NEVER ACCEPTED BY THE ASSESSEE AS LOAN ENTRIES, RATHER IT WAS CLAIMED THAT THESE WERE SITE RELATED EXPENSES. FURTHER, LD CIT(A ) HELD THAT THE SUBJECT PAYMENTS REFLECT THE TRANSACTIONS IN THE NA TURE OF LOANS AND ADVANCES IS NOWHERE BROUGHT OUT IN THE PENALTY ORDE R AND RELIANCE HAS ONLY BEEN PLACED ON THE SPECIAL AUDITORS REPORT. 12. IN THIS REGARD, ON PERUSAL OF THE ASSESSMENT AN D PENALTY ORDER, WE OBSERVE THAT CERTAIN TRANSACTIONS IN THE NATURE OF LOANS/DEPOSITS WERE ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 25 CULLED OUT OF TOTAL CASH TRANSACTIONS FOUND TO HAVE BEEN UNDERTAKEN BY THE ASSESSEE DURING THE YEAR BASED ON DOCUMENTS FOU ND DURING THE COURSE OF SURVEY AND SUBSEQUENT REPORT OF THE SPECI AL AUDITOR. A SET OF TRANSACTIONS WERE SUBJECT TO THE PROVISIONS OF SECT ION 40A(3) DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND REMAINING TRAN SACTIONS BEING IN THE NATURE OF LOANS/DEPOSITS WERE REFERRED TO THE A DD. CIT FOR INITIATING PENAL PROCEEDINGS U/S 269SS AND 269T. BASED ON THE SAME, THE ADD. CIT HAS ISSUED A SPECIFIC SHOW-CAUSE TO THE ASSESSE E DETAILING DATE- WISE DETAILS OF CASH LOANS/DEPOSITS RECEIVED FROM V ARIOUS PERSONS AND TO SHOW-CAUSE WHY THE PROVISIONS OF SECTION 269SS AND 269T SHOULD NOT BE INVOKED. IN RESPONSE, THE ASSESSEE ACKNOWLEDGED THESE TRANSACTIONS BUT AT THE SAME TIME, SUBMITTED THAT THESE TRANSACT IONS ARE NOT IN THE NATURE OF LOANS AND ADVANCES BUT ADVANCES GIVEN TO STAFF, LABOUR AND SUBCONTRACTORS IN THE COURSE OF BUSINESS FOR MAKING PAYMENTS AT VARIOUS SITES AND PROVISIONS OF SECTION 269SS AND 2 69T SHOULD NOT BE INVOKED. IN SUPPORT OF THE SAID CONTENTION, A SOLI TARY EXAMPLE WAS GIVEN OF A TRANSACTION WITH MUNNA BHAI WHO WAS CLAI MED TO BE ONE OF SITE-IN-CHARGE OF A CONSTRUCTION PROJECT. THE ADD CIT DIDNT AGREE TO THE SAID CONTENTIONS. HE STATED THAT FIRSTLY THERE ARE CASH TRANSACTIONS WITH VARIOUS PERSONS WHICH HAVE NOT BEEN RECORDED I N THE BOOKS OF ACCOUNTS AND WHICH HAVE BEEN NOTICED BASED ON ANNEX URE A-2/22 IMPOUNDED DURING THE COURSE OF SURVEY. SECONDLY, B ASED ON PERIODICITY OF CASH RECEIPTS AND CASH PAYMENTS IN THE INDIVIDUA L ACCOUNTS OF EACH OF THE IDENTIFIED PERSONS, IT CANNOT BE HELD THAT T HESE TRANSACTIONS ARE FOR PAYMENT OF SITE EXPENSES RATHER THESE TRANSACTI ONS ARE IN THE NATURE OF FINANCIAL TRANSACTIONS OF LOAN/DEPOSITS WHICH HA VE BEEN RECEIVED AND ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 26 REPAID IN CASH. IN SUPPORT, THE ADD CIT REFERRED T O TRANSACTIONS WITH ONE SHASHI JI DURING THE PERIOD UNDER CONSIDERATION . 13. IN THE ABOVE FACTUAL MATRIX, WHAT WE OBSERVE IS THAT THESE ARE MERELY CONTENTIONS OF THE ASSESSEE NOT SUPPORTED BY ANY CREDIBLE VERIFABLE EVIDENCE. THERE ARE AROUND 13 PERSONS WHI CH HAVE BEEN IDENTIFIED BY THE ADD. CIT WITH WHOM THE ASSESSEE C OMPANY HAS MULTIPLE TRANSACTIONS DURING THE YEAR WHEREIN CASH HAS BEEN RECEIVED AND REPAID. THE TRANSACTIONS WITH EACH OF THE SPEC IFIED 13 PERSONS NEED TO BE SUPPORTED INDEPENDENTLY WITH CREDIBLE EV IDENCE TO DEMONSTRATE THAT THE PROVISIONS OF SECTION 269SS AN D 269T ARE NOT ATTRACTED. IN THIS REGARD, ONCE THE ADD. CIT HAS G IVEN A SHOW-CAUSE TO THE ASSESSEE WITH SPECIFIC DETAILS OF EACH OF THE T RANSACTIONS WITH THE SPECIFIED PERSONS, THE INITIAL ONUS IS ON THE ASSES SEE TO DEMONSTRATE THAT THE PROVISIONS OF SECTION 269SS AND 269T ARE N OT ATTRACTED AND ACCORDINGLY, NO PENALTY CAN BE LEVIED UNDER SECTION 271D AND 271E. THE BASIS OF SUCH SHOW-CAUSE IS THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY AND SUBSEQUENT REPORT OF THE SPECIAL AUDI TOR WHO HAS ANALYSED VARIOUS CASH TRANSACTIONS UNDERTAKEN BY TH E ASSESSEE AND COME TO A CONCLUSION THAT THE PROVISIONS OF SECTION 269SS AND 269T ARE VIOLATED. IT IS FOR THE ASSESSEE TO REBUT THE SAME WITH APPROPRIATE EVIDENCE. THE TRANSACTIONS ARE UNDERTAKEN BY THE A SSESSEE AND IT IS FOR THE ASSESSEE TO DEMONSTRATE THE TRUE NATURE AND CHA RACTER OF THE TRANSACTION. THE INITIAL ONUS THUS LIES ON THE ASS ESSEE AND NOT ON THE REVENUE. THE ASSESSEE HAS MERELY CONTENDED THAT TH ESE ARE ADVANCES TO STAFF AND ITS CONTRACTORS FOR MEETING THE SITE E XPENSES AND REPAYMENT THEREOF, HOWEVER IT HAS FAILED TO DEMONST RATE THE SAME WITH ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 27 VERIFIABLE EVIDENCE. IT HAS MENTIONED ABOUT A SOLIT ARY TRANSACTION WITH ONE MUNNA BHAI WHOM WE DONOT EVEN FIND MENTION IN T HE LIST OF PERSONS IN RESPECT OF WHICH THE PROVISIONS OF SECTI ON 269SS AND 269T HAS BEEN INVOKED BY THE ADD CIT. THERE IS NOTHING ON RECORD TO SUPPORT THE CONTENTION OF THE ASSESSEE THAT 13 PERS ONS IN RESPECT OF WHOM PROVISIONS OF SECTION 269SS AND 269T HAVE BEEN INVOKED BY THE ADD CIT ARE ASSESSEES EMPLOYEES AND/CONTRACTORS AN D TRANSACTIONS WITH THEM ARE IN THE REGULAR COURSE OF BUSINESS FOR MEETING SITE EXPENSES. WHAT IS THE NATURE AND CHARACTER OF THE TRANSACTIONS, THE DEBITS AND CREDITS AND LINKAGE WITH THE BUSINESS AN D INDIVIDUAL SITES/PROJECTS ETC NEED TO BE ESTABLISHED. THEREFOR E, IN ABSENCE OF ANY MATERIAL ON RECORD, WE ARE UNABLE TO AGREE WITH THE FINDING OF THE LD CIT(A) THAT THESE ARE TEMPORARY ADVANCES AND RETURN S MOBILIZED BY THE ASSESSEE FOR ITS SITES WHICH CANNOT BE TERMED AS LO AN OR DEPOSIT SO AS TO ATTRACT THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT. THE LD CIT(A) HAS MERELY ENDORSED THE CONTENTIONS OF THE A SSESSEE WITHOUT ANY CREDIBLE EVIDENCE ON RECORD TO SUPPORT THE SAID CONTENTIONS. UNLESS AND UNTIL, THE ASSESSEE DISCHARGE THE INITIAL ONUS PLACED ON HIM, THE ONUS CANNOT SHIFT TO THE REVENUE. 14. THE LD CIT(A) HAS FURTHER HELD THAT THE ADDL. C IT DURING THE PROCEEDING U/S 269SS OR 269T HAS NOT CROSS EXAMINED THE ABOVE VERSION OF THE ASSESSEE BY ISSUING SUMMONS U/S 131 OR COMMISSION U/S 133(6) TO ANY OF THE PERSONS WHOSE NAMES ARE MENTIO NED IN THE ANNEXURE AND THE FACT THAT ALL THESE CASH PAYMENTS BEING ONLY FOR LOAN AND ADVANCES IS NOT ESTABLISHED BEYOND DOUBT AND NO PRESUMPTION BASED FINANCIAL LIABILITIES CAN BE LEVIED UPON THE ASSESSEE. THE LD CIT(A) ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 28 HAS FURTHER HIGHLIGHTED CERTAIN CONTRADICTIONS IN T HE FINDINGS OF THE ADD CIT. AS WE HAVE HELD ABOVE, THE INITIAL ONUS IS ON THE ASSESSEE AND ONCE THE ASSESSEE DISCHARGES ITS INITIAL ONUS, THE ONUS THEREAFTER SHIFT ON THE REVENUE. AT THE SAME TIME, IN THE INSTANT CA SE, IT IS ALSO A FACT THAT SECTION 271D AND SECTION 271E BEING THE PENAL PROVISIONS WHICH HAVE BEEN INVOKED, IT IS TO BE SEEN THAT THE CONDIT IONS SPECIFIED IN THE PROVISIONS ARE STRICTLY FULFILLED BEFORE THE LEVY O F PENALTY WHICH IS EQUAL TO THE VALUE OF THE TRANSACTIONS. IT HAS TO BE EST ABLISHED THAT THERE ARE TRANSACTIONS IN THE NATURE OF LOANS AND ADVANCES AN D THEIR REPAYMENT, BOTH IN CASH, WHICH HAVE CLEARLY VIOLATED THE PROVI SIONS OF SECTION 269SS AND 269T OF THE ACT WITHOUT ANY REASONABLE CAUSE. ON PERUSAL OF RECORDS, WE FIND THAT THERE IS NOT ENOUGH MATERIAL ON RECORD FOR US TO TAKE A VIEW IN THE MATTER. IN THE INTEREST OF JUSTI CE AND FAIR PLAY, WE ARE SETTING ASIDE THE MATTER TO THE FILE OF THE LD CIT( A) TO EXAMINE THE SAME AFRESH TAKING INTO CONSIDERATION THE ABOVE DISCUSSI ONS. IN THE RESULTS, THE APPEALS FILED BY THE REVENUE AR E ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS-OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/09/17 SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/09/2017. * SANTOSH. ITA NO. 183& 184/JP/2017& CO NO. 15& 14/JP/2017 ACIT VS. SH. SUBHASH PARETA, KOTA 29 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- SHRI SUBHASH PARETA, PROP. M/S PARE TA ASSOCIATES, 3/148, GENESH TALAB, BASANT BIHAR, KOTA . 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 183 & 184,CO NO.14 &15/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR