ACIT, CHENNAI V. VME Precast Pvt Ltd., CHENNAI

ITA 1918/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8078 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Keywords: Additional evidence
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 271D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1918/MDS./2016 / ASSESSMENT YEAR : 2011-12 THE ACIT, CORPORATE CIRCLE 3(2), CHENNAI. VS. M/S.VME PRECAST PVT LTD., 364,PILLAIYAR KOIL STREET, PANERR NAGAR, MOGAPPAIR WEST, CHENNAI -37. [PAN AACV 8267 B ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT D.R /RESPONDENT BY : SHRI T.VASU DEVAN, ADVOCATE / DATE OF HEARING : 27 - 12 - 2016 / DATE OF PRONOUNCEMENT : 25.01 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-11,CHENAI DATED 30.03.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. 2. THE MAIN GRIEVANCE OF THE REVENUE IN ITS APPEAL IS WITH REGARD TO DELETION OF PENALTY LEVIED U/S.271D OF TH E ACT BASED ON THE ITA NO.1918/16 :- 2 -: ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE WHICH WAS NOT PRODUCED BEFORE THE AO DURING THE PENALTY PROCEEDINGS. 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE CO MPANY RECEIVED LOANS ON VARIOUS OCCASIONS TOTALING TO THE TUNE OF ` 1,05,40,500/- BY WAY OF CASH FROM ITS DIRECTORS. S INCE THE LOAN AMOUNT RECEIVED IN CASH EXCEEDED ` 20,000/-, THE AO ISSUED NOTICE U/S.271D FOR VIOLATION OF SEC.269SS OF THE ACT. IN RESPONSE TO NOTICE U/S.271D OF THE ACT, THE ASSESSEE REPLIED TO THE AO STATING THAT THE DIRECTOR EXTENDED LOAN TO THE ASSESSEE COMPANY IN C ASH TO MEET OUT THE IMMEDIATE REQUIREMENT OF THE COMPANY. SINCE TH E ASSESSEE COMPANY WAS A PRIVATE LIMITED COMPANY, THE ASSESSEE COMPANY SUBMITTED BEFORE THE AO THAT THE ACCEPTANCE OF DIRE CTORS LOAN IN CASH WAS NOT IN CONTRAVENTION OF SEC.269SS OF THE ACT. THE ASSESSEE COMPANY FURTHER SUBMITTED BEFORE THE AO THAT THE LO AN IN CASH WAS DEPOSITED AT BANK BY THE DIRECTOR AS TEMPORARY ARRA NGEMENT DUE TO EXTRAORDINARY SITUATION. THEREAFTER, THE AO CALLED FOR CERTAIN DETAILS SUCH AS CASH BOOK WITH NARRATION, LEDGER ACCOUNT SO F LOANS AND ADVANCES & ALL PARTY LEDGER ACCOUNTS WITH WHOM CASH TRANSACTIONS OF MORE THAN ` 20,000/- WAS MADE. SINCE THESE DOCUMENTS WERE NOT MADE AVAILABLE TO THE AO, THE AO INVOKED THE PROVIS IONS OF THE SECTION 271D OF ACT BY LEVYING A PENALTY OF ` 1,05,40,500/-. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, BEFORE ITA NO.1918/16 :- 3 -: LD.CIT(A) THE ASSESSEE COMPANY STATED THAT THE AMOU NT WAS RECEIVED BY THE ASSESSEE THROUGH ITS DIRECTORS FROM M/S.TCS TEXTILES LTD. AND M/S.SRI MANICKAM INFRASTRUCTURE PVT. LTD., AND BY M ISTAKE IT WAS SHOWN AS LOAN FROM DIRECTORS TO THE ASSESSEE COMPAN Y. ON THIS BASIS, THE LD.CIT(A) DELETED THE ADDITION. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BEFORE THE AO, THE ASSESSEE IS NOT CO-OPERA TIVE IN SPITE OF GIVING OPPORTUNITY TO THE ASSESSEE, AS SUCH THE AO LEVIED PENALTY U/S.271D OF THE ACT AT ` 1,05,40,500/-. HOWEVER, BEFORE THE LD.CIT(A) THE ASSESSEE HAD TAKEN A PLEA THAT DURING THE RELEV ANT TO ASSESSMENT YEAR ASSESSEE HAS UNDERTAKEN THE EXECUTION OF WORK CONTRACT FROM MANY CUSTOMERS INCLUDING M/S.TCS TEXTILES LTD. AND THEIR GROUP AND M/S.SRI MANICKAM INFRASTRUCTURE PVT. LTD. FOR THE PURPOSE OF EXECUTION OF WORK CONTRACT, THESE TWO PARTIES ARE PAID CASH F OR SUPPLY OF MATERIALS AND CONSUMABLES AND ALSO TO HIRE THE MACH INERIES LIKE CRANES, EARTH-MOVERS ETC. FOR THE PURPOSE OF CONSTR UCTION TO THE DIRECTORS OF THE ASSESSEE COMPANY. IN TURN, THE DI RECTORS PAID THAT AMOUNT TO THE ASSESSEE, DUE TO MISTAKE IT WAS LOAN FROM THE DIRECTORS OF THE ASSESSEE COMPANY. THE LD.CIT(A) AFTER HEARI NG THE LD.A.R DELETED THE PENALTY IMPOSED U/S.271D OF THE ACT. AG GRIEVED WITH THE ORDER OF LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE US. ITA NO.1918/16 :- 4 -: 5. IN OUR OPINION, THIS IS A CLEAR CASE OF VIOLATI ON OF RULE 46A OF THE INCOME TAX RULES, 1962. SINCE THE ASSESSEE IS NOT CO-OPERATED WITH THE AO, THE LD.CIT(A) WOULD HAVE CALLED FOR RE MAND REPORT FROM THE AO, INSTEAD LD.CIT(A) HAS OPTED TO DELETED THE ADDITION, WHICH IS NOT APPROPRIATE. IN VIEW OF THIS, WE ARE INCLINED TO REMIT THE ISSUE TO THE FILE OF AO FOR FRESH CONSIDERATION AFTER PROVID ING OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF