ITO, CHENNAI V. Smt. R.Senthamarai, CHENNAI

ITA 1956/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51682 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K ME GHANATH CHAUHAN
• Assessee Lawyers: S SRIDHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER) .. I.T.A. NO. 1956/MDS/2010 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, MEDIA WARD III, CHENNAI 600 034. (APPELLANT) V. SMT. R. SENTHAMARAI, NEW NO.32, OLD NO.33/2, OLIVER ROAD (MUSSIRI SUBRAMANIAN ROAD), MYLAPORE, CHENNAI 600 034. PAN : ALLPS7575E (RESPONDENT) APPELLANT BY : SHRI K. MEGHANATH CHAUHAN, JCIT RESPONDENT BY : SHRI S. SRIDHAR, AD VOCATE O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY REVENUE FOR THE ASSESSMEN T YEAR 2005- 2006 AGAINST AN ORDER DATED 17.08.2010 OF COMMISSIO NER OF INCOME TAX (APPEALS)-VI, CHENNAI. I.T.A. NO. 1956/MDS/10 2 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT T HE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS. 4,00,000/- LE VIED U/S 271D OF THE INCOME-TAX ACT, 1961 [IN SHORT, THE ACT]. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OB SERVED THAT THE ASSESSEE HAD ACCEPTED RS. 4 LAKHS IN CASH FROM SHR I D. RAMALINGAM, ASSESSEES HUSBAND. ACCORDING TO THE ASSESSING OFF ICER, THE ASSESSEE HAS TAKEN LOAN IN CASH FOR AN AMOUNT EXCEE DING RS. 20,000/- IN VIOLATION OF PROVISIONS OF SECTION 269S S OF THE ACT. THE ASSESSING OFFICER THEREFORE, LEVIED PENALTY OF RS. 4 LAKHS U/S 271D OF THE ACT. 4. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THA T THE AMOUNT WAS PAID BY THE HUSBAND TO THE ASSESSEE AS IT WAS U RGENTLY REQUIRED BY HER FOR PAYMENT FOR PURCHASE OF PROPERTY. IT WA S SUBMITTED THAT AS THE AMOUNT WAS TAKEN FROM HER HUSBAND WHO WAS A CLOSE RELATIVE, THEREFORE, ASSESSEE WAS NOT LIABLE FOR PE NALTY U/S 271D OF THE ACT. I.T.A. NO. 1956/MDS/10 3 5. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, HELD THAT THE ASSESSING OFFICER HAS NOT D OUBTED THE GENUINENESS OF THE AMOUNT GIVEN AND THAT THE AMOUNT WAS GIVEN TO MEET OUT THE URGENT FINANCIAL COMMITMENTS AND THE A MOUNT WAS ALSO RECEIVED FROM ASSESSEES HUSBAND. THEREFORE, THE LD. CIT(A) HELD THAT THE ASSESSEE WAS NOT EXIGIBLE TO PENALTY U/S 271D OF THE ACT AND DELETED THE SAME. 6. BEFORE US, THE LD. D.R. VEHEMENTLY ARGUED IN SUP PORT OF THE ASSESSING OFFICER WHEREAS THE LD. A.R. SUPPORTED TH E ORDER OF THE LD. CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE UNDISPUT ED FACTS OF THE CASE ARE THAT THE ASSESSEE TOOK LOAN OF RS. 4 LAKH S IN CASH FROM HER HUSBAND FOR PURCHASE OF A PROPERTY. THE SAID LOAN WAS TAKEN DUE TO URGENT FINANCIAL NEEDS OF THE ASSESSEE. THE ASSESS ING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS VIOLATED THE PROVISI ONS OF SECTION I.T.A. NO. 1956/MDS/10 4 269SS OF THE ACT BY TAKING CASH LOAN AND THEREFORE, LEVIED PENALTY OF RS. 4 LAKHS U/S 271D OF THE ACT. 8. ON APPEAL, THE LD. CIT(A) DELETED THE PENALTY ON THE GROUND THAT GENUINENESS OF THE LOAN WAS NOT DOUBTED BY THE ASSESSING OFFICER AND THAT LOAN WAS TAKEN TO MEET THE URGENT FINANCIAL COMMITMENTS FROM ASSESSEES HUSBAND. 9. WE FIND THAT THE GENUINENESS OF THE TRANSACTION IS NOT IN DOUBT AND IT IS NOT A CASE WHERE THE ASSESSEE TRIED TO EX PLAIN SOME UNDISCLOSED ASSETS FOUND TO PROHIBIT WHICH OBJECT W AS INSERTION OF PROVISION OF SECTION 269SS IN THE ACT. MOREOVER, W E FIND THAT IN SIMILAR CIRCUMSTANCES OF THE CASE, THE TRIBUNAL IN THE CASE OF DR. B.G. PANDEY VS. DCIT [2010] 111 TAXMANN 86 [MAG] HA S HELD THAT NO PENALTY WAS LEVIABLE FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT IN A CASE WHERE THE ASSESSEE OBTAINED CERTA IN LOAN FROM HIS WIFE FOR CONSTRUCTION OF A HOUSE A THE TRANSACTION DID NOT INVOLVE ANY INTEREST ELEMENT AND THERE WAS NO PROMISE TO RE TURN THE AMOUNT WITH OR WITHOUT INTEREST. IN THE PRESENT CA SE ALSO, THE I.T.A. NO. 1956/MDS/10 5 ASSESSEE RECEIVED LOAN OF RS. 4 LAKHS FROM HER HUS BAND FOR PURCHASE OF PROPERTY WHICH WAS URGENTLY REQUIRED BY HER. TH E FACTS OF THE PRESENT CASE BEING IDENTICAL TO THE FACTS IN THE CA SE OF DR. B.G. PANDEY [SUPRA], WE CONFIRM THE ORDER OF THE LD. CIT (A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 10. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. THE ORDER WAS PRONOUNCED IN THE COURT ON 5 TH AUGUST, 2011. SD/- SD/- (HARI OM MARATHA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 5 TH AUGUST, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-VI, CHENNAI-34 (4) CIT, CHENNAI-IV, CHENNAI (5) D.R. (6) GUARD FILE