Appeal details
Counselvise Citation
191423514 RSA 2010
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-05-2011
Appeal Filed By
Assessee
Bench Allotted
A
Next Hearing Date
24-05-2011
Assessment Year
2003-2004
Appeal Filed On
11-10-2010
Judgement Text
, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NOS . 1913 & 1914/KOL/2010 %& '(/ ASSESSMENT YEAR : 2003-04 (*+ / APPELLANT ) ORANGE SECURITIES PVT.LTD., KOLKATA (PAN: AAACO 8239 L) - % - - VERSUS - . (-.*+/ RESPONDENT ) D.C.I.T., CIRCLE-6, KOLKATA *+ / 0 '/ FOR THE APPELLANT: SHRI MANIK BANERJEE -.*+ / 0 '/ FOR THE RESPONDENT: SHRI P.K.MISHRA '1 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE APPEALS ARE FILED BY THE ASSESSEE AGAINS T SEPARATE ORDERS DATED 17.03.2010 OF THE CIT(A)-VI, KOLKATA PERTAINING TO A.YR. 2003-04. 2. THE ISSUE RAISED BY THE ASSESSEE IN RELATIN G TO THE LEVY OF PENALTY U/S 271D OF THE ACT TO THE EXTENT OF RS.28,13,178/- AND IN ITA NO.1 914/KOL/2010 IN RESPECT OF LEVY OF PENALTY OF RS.17,66,109/- U/S 271E OF THE IT ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO WHILE DOING THE SCRUTINY ASSESSMENT HAS OBSERVED THAT THE ASSESSEE COMPANY HAD TRANSACT IONS WITH ONE OF THE DIRECTORS SHRI DIPAK KUMAR NAHA WHO HAS ADVANCED CASH LOAN OF RS.2 8,13,178/- AND FURTHER THE COMPANY HAS ALSO PAID RETURNED LOAN TO SHRI DIPAK K UMAR NAHA AN AMOUNT OF RS.17,66,109/-. KEEPING IN VIEW OF THE FACT THAT AS PER THE TAX AUDIT REPORT ALONG WITH 2 THE INCOME TAX RETURN SINCE THE TAX AUDITOR HAS REP ORTED THAT THERE ARE CASH TRANSACTIONS IN BETWEEN THE ASSESSEE COMPANY AND TH E DIRECTOR. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS VIOLATED THE PROVIONS OF SECTION 269SS AND 269T OFT EH IT ACT . ACCORDINGLY HE LEVIED PENALTY AN AMOUNT OF RS .28,13,178/- U/S 271 D OF THE IT ACT. IN RESPECT OF CASH LOANS TAKEN BY THE COMPANY THE AO LEVIED PENALTY OF RS.17,66,109/- U/S 271E OF THE ACT. AND IN RESPECT OF THE REPAYMENT OF THE SAID LOAN DURING THE FINANCIAL YEAR IMMEDIATELY IN THE PRECED ING YEAR. 3.1. ON APPEAL THE LD. CIT(A) HAS CONFIRMED BOTH THE PENALTIES BY OBSERVING THAT IN THE TAX AUDIT REPORT AS PER CLAUSE 24(A)(II) THE ASSESSEE COMPANY HAS TAKEN A LOAN FROM ITS DIRECTOR SHRI DIPAK KUMAR NAHA AND THE COM PANY AHS REPAID ONE FOURTH OF THE AMOUNT IN CASH DURING THE YEAR. 3.2. AGGRIEVED BY THIS THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL HAS SUBMITTED THAT AS PE R THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS IDHAYAM PUBLICATIONS LT D. 285 ITR 221 SINCE THE TRANSACTIONS ARE ENTIRELY WITH THE ASSESSEE COMPANY WITH ONE OF THE DIRECTORS OF THE COMPANY THEY ARE NOT SUBJECT TO THE PROVISIONS OF S ECTION 269D. THEREFORE, HE REQUESTED TO DELETE THE PENALTY LEVIED BY THE AO AN D CONFIRMED BY THE LD. CIT(A). 5. THE LD. DR RELIED ON THE ORDERS OF THE R EVENUE AUTHORITIES. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND O N PERUSAL OF THE MATERIALS AVAILABLE ON RECORD KEEPING IN VIEW OF THE FACT THAT THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS IDHAYAM PUBLICATIONS LTD. CITED SUPRA HAS HE LD AS UNDER :- HELD, DISMISSING THE APPEAL, THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE DIRECTOR-CUM-SHAREHOLDER WAS NOT A LOAN OR DEPOSIT AND IT WAS ONLY A CURRENT ACCOUNT IN NATURE AND NO INTEREST WAS BEING CHARGED FOR THE ABOVE TRANSACTION. THE DELETION OF PENALTY WAS JUSTIFIED. 3 6.1. RESPECTFULLY FOLLOWING THE SAME, WE FIND NO JUSTIFICATION ON THE PART OF THE REVENUE TO LEVY PENALTY EITHER U/S 271D OR 271E OF THE IT ACT IN RESPECT OF THE TRANSACTIONS MADE BY THE ASSESSEE COMPANY WITH ONE OF THE DIRECTORS. THEREFORE, WE DELETE THE PENALTY LEVIED BY THE REVENUE AUTHORITIE S AND ALLOW THE APPEALS OF THE ASSESSEE. 7. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.05.2011. SD/- SD/- MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , ,, , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 24.05 .2011 '1 / -6 7'6'8- COPY OF THE ORDER FORWARDED TO: 1. ORANGE SECURITIES PVT. LTD., 1, NETAJI SUBHAS ROAD, CALCUTTA-700001. 2 THE DCIT, CIRCLE-6, KOLKATA 3. THE CIT, 4. THE CIT(A)-VI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA .6 -/ TRUE COPY, '1%;/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)
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