Shree Dilip Purshottambhai Patel, Vadodara V. The Additional Commissioner of Income Tax, Range-3, Baroda

ITA 1925/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8416 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 21-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 1925/AHD/2016 / A.Y. 2011-12 SHRI DILIP PURSHOTTAMBHAI PATEL, PROP. M/S. D P PATEL ENGINEERING & CONTRACTOR, 26, KAMUDI SOC. OPP. S.T. DEPOT, DABHOI, VADODARA PAN: : ADUPP 6030 A VS ADDL. COMMISSIONER OF INCOME-TAX, RANGE-3, BARODA ! / (APPELLANT) '# ! / (RESPONDENT) BY ASSESSEE(S) : SHRI SUNIL TALATI, AR BY REVENUE : SHRI SUMIT KUMAR VARMA, SR. DR / DATE OF HEARING : 04/04/2018 /DATE OF PRONOUNCEMENT : 23/04/2018 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST CIT(A)-5, VADODARAS ORDER DATED 11.04.2016 PASSED IN CASE NO.CAB/5- 313/2014-15 AFFIRMING ASSESSING OFFICERS ACTION LE VYING PENALTY OF RS.3,65,000/- IN HIS ORDER DATED 24.07.2014 IN PRO CEEDING U/S 271E OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. LEARNED COUNSEL TAKES US THROUGH THE CIT(A)S DE TAILED DISCUSSION IN REJECTING ASSESSEES AVERMENTS DURING THE COURSE OF LOWER APPELLATE PROCEEDINGS AS UNDER:- 6.3 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, THE OBSERVATIONS OF THE ASSESSING OFFICER, THE SUBMISSI ONS OF THE ASSESSEE, MATERIAL AVAILABLE ON RECORD AND THE JUDICIAL PRONO UNCEMENTS ON THE ITA NO. 1925/AHD/2016 SHRI DILIP PURSHOTTAMBHAI PATEL VS. ACIT A.Y :- 2011-12 - 2 - SUBJECT. IT IS NOT DISPUTED BY THE ASSESSEE THAT T HE AMOUNTS IN QUESTION WERE TREATED AS LOANS BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. FROM THE RECORDS, IT IS ALSO CLEAR THAT THE ABOVE TRANSACTIO NS WERE IN THE NATURE OF LOANS OBTAINED BY THE ASSESSEE. IT IS ALSO NOT IN D ISPUTE THAT THE AMOUNTS IN QUESTION WERE RETURNED BY THE ASSESSEE IN CASH AND THIS FACT HAS BEEN ACCEPTED BY THE ASSESSEE IN HIS WRITTEN REPLY ALSO. THE ASSESSEE HAS DISPUTED THAT THE AMOUNTS IN QUESTION WERE NOT LOAN AND THE PROVISIONS OF SECTION 269T AND 271E WERE NOT APPLICABLE TO THE FACTS OF T HE CASE. 6.4 AS FAR AS TRANSACTION OF RS.1,50,000/- WITH S HRI MANOJ THAKOR IS CONCERNED, THE ASSESSEE HAS SUBMITTED THAT HE WAS A WARDED A CONTRACT BY M/S SSNNL IN F.Y. 2004-05 AND ONE OF THE CLAUSES OF THE CONTRACT REQUIRED HIM TO DEPOSIT A SUM OF RS.3,00,0007-WITH M/S SSNNL . THE ASSESSEE HAD SUBCONTRACTED THE WORK TO M/S GAYATRI CONSTRUCTION, WHO WAS ASKED BY THE ASSESSEE TO DEPOSIT HALF OF RS.3,00,000/- WITH M/S SSNNL. SHRI MANOJ THAKOR A/C M/S GAYATRI CONSTRUCTION, DEPOSITED HALF OF RS.3,00,000/- I.E. RS.1,50,000/- WITH M/S SSNNL, ON BEHALF OF THE ASSE SSEE. IT IS NOT DISPUTED THAT THE SUM OF RS.1,50,000/- DEPOSITED BY SHRI MAN OJ THAKOR WAS ULTIMATELY ASSESSEE'S RESPONSIBILITY. THERE IS NOTH ING ON RECORD TO SHOW THAT SHRI MANOJ THAKOR OR M/S GAYATRI CONSTRUCTION WERE EVER OBLIGED THROUGH ANY BINDING CONTRACT, TO DEPOSIT ANY SUM WITH M/S S SNNL. THE MONEY DEPOSITED BY SHRI MANOJ THAKOR WITH M/S SSNNL WAS, IN THE ULTIMATE ANALYSIS, A LOAN ADVANCED TO THE ASSESSEE, TO ENABL E HIM TO MEET 'HIS CONTRACTUAL LIABILITIES WITH M/S SSNNL, BY DEPOSITI NG THE REQUISITE SUM WITH M/S SSNNL. SINCE THE NATURE OF THE TRANSACTION WAS LOAN AND SINCE THE SAME WAS RETURNED IN CASH, THE PROVISIONS OF SE CTION 269T AND 271E ARE VERY WELL ATTRACTED IN THIS CASE AND ASSESSEE'S ARG UMENTS TO THE CONTRARY IN THIS REGARD ARE REJECTED. 6.5 AS REGARDS REPAYMENT OF RS.25,000/- TO SHRI B HIMJIBHAI SAMA, THE ASSESSEE HAS ARGUED THAT SINCE THE REPAYMENT WAS MA DE IN TWO INSTALMENTS EACH OF LESS THAN 20.000/-, THE PROVISIONS OF SECTI ON 269T/271E ARE NOT ATTRACTED. THIS PROPOSITION IS AGAIN, CONTRARY TO T HE PROVISIONS. AS PER SECTION 269T, IF THE AGGREGATE AMOUNT OF LOAN TOGET HER WITH INTEREST, ON THE DATE OF REPAYMENT, IS MORE THAN RS.20,000/-, THE RE PAYMENT MUST BE MADE AS PER PROVISIONS OF SECTION 269T, WHICH PROHIBITS CASH PAYMENTS. PAYMENT IN CASH INSTALMENTS OF LESS THAN RS.20,000/- EACH D OES NOT ABSOLVE THE ASSESSEE FROM THE PENAL PROVISIONS OF SECT/ON 271E FOR VIOLATION OF SECTION 269T OF THE ACT. 6.6 THE ASSESSEE HAS A/SO PAID CASH OF RS.95,000/ - EACH TO SHRI KANUBHAI PATEL AND SHRI BHAVESHBHAI PATEL. THE ASSESSEE HAS EXPLAINED THAT HE HAD PURCHASED A PIECE OF LAND WITH THE ABOVE TWO PERSON S AS CO-OWNERS AND THESE TWO PERSONS HAD GIVEN HIM RS.95,000/- EACH TO DEVELOP THE LAND. ITA NO. 1925/AHD/2016 SHRI DILIP PURSHOTTAMBHAI PATEL VS. ACIT A.Y :- 2011-12 - 3 - HOWEVER, SINCE THE RELEVANT PERMISSIONS FROM THE CO MPETENT AUTHORITIES COULD NOT BE OBTAINED, THE AMOUNTS RECEIVED FROM TH EM WERE RETURNED BACK IN CASH. HOWEVER, THERE IS NO CONTEMPORARY EVIDENCE ON RECORD TO SUBSTANTIATE THE CLAIM THAT IT WAS NOT LOAN. THE AS SESSEE HAS FURNISHED A COPY OF CONFIRMATIONS FROM BOTH OF THESE PERSONS, B UT THE SAME APPEARS TO BE AN AFTERTHOUGHT, AS THE SAME HAS BEEN OBTAINED AFTE R THE ASSESSING OFFICER DETECTED THE VIOLATION, AS IS EVIDENT FROM DATE OF CONFIRMATION VIZ. 28.11.2013 IN THE CASE OF SHRI KANUBHAI J. PATEL. T HE LANGUAGE OF BOTH THE CONFIRMATIONS IS SAME. IT IS OBVIOUS THAT THE ASSES SEE HAD TREATED THE SUMS IN QUESTION AS LOANS IN HIS BOOKS OF ACCOUNTS, THER EFORE, REPAYMENT OF THE SAME IN CASH IS A VIOLATION OF THE PROVISIONS OF SE CTION 269T OF THE ACT AND THE ASSESSEE IS LIABLE TO SUFFER THE CONSEQUENCES O F THE PROVISIONS OF SECTION 271E OF THE ACT. 3. LEARNED AUTHORIZED REPRESENTATIVE THEREAFTER SUB MITS VERY FAIRLY THAT THE ASSESSEE DOES NOT PRESS FOR HIS CHALLENGE MADE TO CORRECTNESS OF THE IMPUGNED PENALTY RELEVANT TO CASH PAYMENT OF RS .95,000/- IN CASE OF SHRI KANUBHAI PATEL. HE THEN REITERATES ASSESSEES PLEADINGS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WELL AS ON F ACTS IN CONFIRMING IN LEVYING THE IMPUGNED PENALTY. THE DEPARTMENTAL REP RESENTATIVE ON THE OTHER HAND SUPPORTS THE ABOVE EXTRACTED FINDING OF THE LEARNED CIT(A) CONFIRMING THE PENALTY. 4. WE NOTICE IN THIS BACKDROP OF THE CASE THAT THE HONBLE APEX COURT IN THE CASE OF ASST DIRECTOR OF INSPECTION (INVESTIGAT ION). VS. KUM A B SHANTHI, (2002) 255 ITR 258 (SC), EXPLAINED THE OBJ ECT OF INTRODUCING SECTION 269SS (ON IDENTICAL LINES) TO BE THAT OF ER ADICATION OF EVIL PRACTICE OF MAKING FALSE ENTRIES IN ACCOUNT BOOKS FOLLOWED BY C ONSEQUENT EXPLANATION QUA THE SAME. THE HONBLE JURISDICTIONAL HIGH COUR TS JUDGMENT IN CASE OF CIT VS. BHAGWATI PRASAD BAJORIA (HUF), [2003] 263 I TR 487 (GUJ.) ALSO REITERATES THE SAME. WE NOTICE IN THIS BACKDROP OF THE FACTS THAT THE LOWER AUTHORITIES DO NOT DISPUTE ASSESSEES EXPLANATION Q UA GENUINENESS OF THE IMPUGNED TRANSACTIONS. WE HOWEVER ARE OF THE OPINI ON THAT THE ITA NO. 1925/AHD/2016 SHRI DILIP PURSHOTTAMBHAI PATEL VS. ACIT A.Y :- 2011-12 - 4 - IMPUGNED PENALTY DOES NOT AUTOMATICALLY FLOW IN CAS E OF ANY CONTRAVENTION MADE TO THE STATUTORY PROVISION UNDER SECTION 269T OF THE ACT. WE THEREFORE FOLLOW ABOVE STATED LEGAL POSITI ON TO ACCEPT ASSESSEES CONTENTION CHALLENGING CORRECTNESS OF THE IMPUGNED PENALTY IN CASE OF THE REMAINING THREE CASES AS ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE NOT DOUBTED THE GENUINENESS OF THE IMPUGNED TRANSACTION S. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY. ASSESSEES CORRESPONDING GROUNDS ARE THEREFORE ACCEPTED. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 23 RD APRIL, 2018 AT AHMEDABAD SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 23/04/2018 *BT & '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' $ / CONCERNED CIT 4. $ ( ) / THE CIT(A) 5. ' **' , ' , / DR, ITAT, AHMEDABAD 6. / / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD