ITO WD 1(3), Jalna V. Shri Sheta Rameshwar Ganpatrao, Jalna

ITA 202/PUN/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4303 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANN KAPTHUAMA
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NOS. 201 & 202/PN/2012 (ASSESSMENT YEAR : 2005-06) INCOME TAX OFFICER, WARD 1 (3), JALNA . APPELLANT VS. SHRI SHETE RAMESHWAR GANPATRAO PROP. OM AGRO SERVICES, SHOP NO. 17, APMC MARKET, JALNA 431 203. PAN : ARXPS0473M . RESPONDENT APPELLANT BY : MR. SUNIL GANOO RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 14-06-2013 DATE OF PRONOUNCEMENT : 20-06-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEALS BY THE REVENUE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 29.11.2011 WHEREBY PENALTIES LEVIED BY THE ADDITION AL COMMISSIONER OF INCOME TAX, RANGE-1, AURANGABAD (IN SHORT ACIT) U NDER SECTIONS 271D AND 271E OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ) AMOUNTING TO RS.10,00,000/- EACH VIDE ORDERS DATED 26.11.2010 PE RTAINING TO THE ASSESSMENT YEAR 2005-06 HAVE BEEN DELETED. 2. IN BOTH THE APPEALS, THE GRIEVANCE OF THE REVENU E IS THAT THE CIT(A) WAS IN DELETING THE PENALTIES LEVIED UNDER SECTIONS 271D AND 271E OF THE ACT. 3. FIRST, WE TAKE UP THE APPEAL OF THE REVENUE PERT AINING TO THE LEVY OF PENALTY UNDER SECTION 271D OF THE ACT VIDE ITA NO.2 01/PN/2012. IN BRIEF, THE FACTS ARE THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN ITA NOS. 201 & 202/PN/2012 SHRI SHETE RAMESHWAR GANPATRAO A.Y. 2005-06 FERTILIZERS AND IN THE ACTIVITY OF AGRICULTURE. A S EARCH ACTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF RUDRANEE GROUP ON 02.02.2006 AND AS A CONSEQUENCE A SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CONDUCTED ON 02.02.2006 AT THE BUSINESS-CUM-RESIDEN TIAL PREMISES OF ONE SHRI KACHRULAL NATHMAL MUTHA, WHO WAS FOUND TO BE E NGAGED IN UNAUTHORIZED MONEY LENDING BUSINESS. IN THE COURSE OF SURVEY ACT ION ON SHRI KACHRULAL NATHMAL MUTHA (SHRI K.N. MUTHA), A MODUS-OPERANDI W AS NOTED TO THE EFFECT THAT HE WAS ENGAGED IN GIVING CASH LOAN IN HUNDIES AND AS A SECURITY HE WOULD KEEP THE SIGNED DATED/UNDATED CHEQUES OF THE BORROW ERS. THESE CHEQUES WOULD BE RETURNED WHEN THE HUNDIES WERE CANCELLED I .E. LOANS WERE REPAID BY THE BORROWERS. THE SURVEY ACTION RESULTED INTO IMPO UNDING OF NUMBER OF HUNDIES, PROMISSORY NOTES, ETC. AGAINST THE CASH LO ANS GIVEN TO DIFFERENT PERSONS. THE NUMBER OF SIGNED DATED/UNDATED CHEQUES WERE ALSO FOUND WHICH WERE GIVEN BY THE PERSONS AS MEASURE OF SECURITY TO SHRI K.N. MUTHA. A CHEQUE DATED 11.03.2005 AMOUNTING TO RS.10,00,000/- OF AURANGABAD JALNA GRAMIN BANK, JALNA WAS FOUND WHICH WAS BELONGING TO THE ASSESSEE. THE REVENUE HAS INFERRED THAT AS THE SAID CHEQUE WAS FO UND, ASSESSEE WOULD HAVE TAKEN LOAN OF RS.10,00,000/- IN CASH AND THE S AME WAS ALSO REPAID IN CASH, AS THE CHEQUE HAD NOT BEEN PRESENTED FOR ENCA SHMENT. FOR THE AFORESAID REASONS, THE REVENUE HELD THAT ASSESSEE H AD VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT WHEREBY HE H AD RECEIVED A LOAN BY WAY OF A MODE AND OTHER THAN THOSE PRESCRIBED IN SE CTION 269SS THEREFORE ASSESSEE WAS LIABLE FOR PENALTY UNDER SECTION 271D OF THE ACT. SIMILARLY, IT WAS ALSO PRESUMED THAT ASSESSEE HAD REPAID THE LOAN IN CASH WHICH WAS IN VIOLATION OF SECTION 269T OF THE ACT AND THEREFORE PENALTY UNDER SECTION 271E WAS ALSO EXIGIBLE. 4. THE ACIT LEVIED PENALTIES UNDER SECTIONS 271D AN D 271E OF THE ACT OF RS.10,00,000/- EACH. BEFORE THE CIT(A), ASSESSEE RE FERRED TO HIS STATEMENT RECORDED ON 07.12.2007 BY THE THEN ACIT, CENTRAL CI RCLE, AURANGABAD IN THE PRESENCE OF SHRI K.N. MUTHA. ASSESSEE SUBMITTED THA T IN THE SAID STATEMENT ITA NOS. 201 & 202/PN/2012 SHRI SHETE RAMESHWAR GANPATRAO A.Y. 2005-06 HE HAD DENIED RECEIPT OF ANY LOAN FROM SHRI K.N. MU THA AND THE SAID SHRI K.N. MUTHA DID NOT CONTRADICT THE REPLY GIVEN BY THE ASS ESSEE. ASSESSEE POINTED OUT THAT HE HAD FILED AN AFFIDAVIT WITH THE ASSESSI NG OFFICER IN THE PROCEEDINGS OF SHRI K. N. MUTHA CONFIRMING THAT HE HAD NOT RECE IVED ANY LOAN FROM HIM. IT WAS ALSO POINTED OUT THAT THE CHEQUE DATED 11.03.20 05 IMPOUNDED FROM THE PREMISES OF SHRI K.N. MUTHA WAS BLANK AND WAS NOT I SSUED IN FAVOUR OF SHRI K.N. MUTHA. ASSESSEE ALSO SUBMITTED THAT NO HUNDI W AS FOUND IN POSSESSION OF SHRI K.N. MUTHA TO CORROBORATE THE DETAILS OF TH E CHEQUE WHICH WOULD SHOW THAT ASSESSEE HAD RAISED ANY LOAN ON THE SECURITY O F THE BLANK CHEQUE. THE ASSESSEE ALSO SUBMITTED THAT SHRI K.N. MUTHA HAD NO T ADMITTED THAT HE ADVANCED THE LOAN OF RS.10,00,000/- TO THE ASSESSEE OR RECEIVED BACK THE SAME. IN NUTSHELL THE PLEA OF THE ASSESSEE WAS THAT NO EVIDENCE WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO ESTABLISH THA T ASSESSEE HAS IN FACT RECEIVED AND REPAID THE ALLEGED LOAN OF RS.10,00,00 0/- IN CASH. 5. THE CIT(A) HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT ESTABLISHED BEYOND DOUBT THAT ASSES SEE HAD COMMITTED THE DEFAULT OF RECEIVING AND REPAYING THE LOAN IN CONTR AVENTION OF SECTIONS 269SS AND 271D OF THE ACT RESPECTIVELY. ACCORDINGLY THE P ENALTIES HAVE BEEN DELETED. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE APPEARING FOR THE REVENUE HAS EMPHASIZED THAT IN THE COURSE OF SURVEY ACTION UNDER SECTION 132A OF THE ACT ON SHRI K.N. MUTHA A MODUS-OPERANDI WAS NOTICED WHEREBY THE SAID PERSON WAS FOUND TO BE GIVING CASH LOAN ON HUNDIES/PROMISSORY NOTES AND WAS KEEPING BLANK CHEQUES AS SECURITY FOR THE L OANS GIVEN. THEREFORE, SINCE THE CHEQUE OF RS.10,00,000/- SIGNED BY THE AS SESSEE WAS FOUND IN THE POSSESSION OF SHRI K.N. MUTHA IT WAS TO BE PRESUMED THAT ASSESSEE WOULD HAVE RECEIVED THE CORRESPONDING AMOUNT OF LOAN IN C ASH AND IN THE ABSENCE OF CHEUQE ENCASHMENT, IT WAS ALSO TO BE PRESUMED THAT THE LOAN HAS BEEN REPAID ITA NOS. 201 & 202/PN/2012 SHRI SHETE RAMESHWAR GANPATRAO A.Y. 2005-06 IN CASH, WHICH IS IN VIOLATION OF SECTIONS 269SS AN D 271E OF THE ACT THEREBY LEVYING PENALTIES UNDER SECTIONS 271D AND 271E RESP ECTIVELY WAS JUSTIFIED. 7. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE HAS RELIED UPON THE FINDINGS OF THE CIT(A), WHICH ACCORDING TO HIM HAVE NOT BEEN CONTROVERTED BY THE REVENUE, IN SUPPORT OF THE CASE OF THE ASSES SEE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. SECTION 269SS OF THE ACT PRESCRIBES THAT NO PERSON SHALL TAKE OR ACC EPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PA YEE CHEUQE OR AN ACCOUNT PAYEE BANK DRAFT IF SUCH LOAN OR DEPOSIT EXCEEDS OF RS.20,000/-. IN THE PRESENT CASE, CHARGE MADE BY THE REVENUE IS THAT ASSESSEE H AD RECEIVED A LOAN OF RS.10,00,000/- FROM SHRI K.N. MUTHA IN CONTRAVENTIO N OF SECTION 269SS OF THE ACT. THE CHARGE AGAINST THE ASSESSEE IS BASED ON A BLANK SIGNED CHEQUE DATED 11.03.2005 BELONGING TO THE ASSESSEE, WHICH W AS FOUND IN THE COURSE OF SURVEY ACTION ON SHRI K.N. MUTHA. 9. AS PER THE REVENUE, SHIR K.N. MUTHA WAS ENGAGED IN FINANCING CASH LOANS BY WAY OF HUNDIES/PROMISSORY NOTES, ETC. AND AS A SECURITY HE WOULD KEEP SIGNED CHEQUES FROM THE BORROWERS AGAINST THE AMOUNT ADVANCED IN CASH. THE CHEQUE AMOUNTING TO RS.10,00,000/- ISSUED BY THE ASSESSEE, WHICH WAS FOUND IN POSSESSION OF SHRI K.N. MUTHA LEAD TO BE INFERENCE BY THE REVENUE THAT ASSESSEE WOULD HAVE RECEIVED A LOAN OF RS.10,00,000/- IN CONTRAVENTION OF SECTION 269SS OF THE ACT. IN THE P RESENT CASE, BEFORE THE PENAL PROVISIONS ARE TRIGGED, IT IS TO BE ESTABLISH ED ON THE BASIS OF CONCRETE EVIDENCE THAT ASSESSEE HAD INDEED RECEIVED THE ALLE GED LOAN OF RS.10,00,000/- IN CASH FROM SHRI K.N. MUTHA. THE AS SESSEE DENIED HAVING RECEIVED ANY LOAN FROM SHRI K.N. MUTHA. SUCH DENIAL WAS MADE DURING THE COURSE OF STATEMENT RECORDED ON 07.12.2007 BY THE A CIT, CENTRAL CIRCLE, AURNGABAD IN THE PRESENCE OF SHRI K.N. MUTHA. ASSES SEE ALSO FURNISHED AN AFFIDAVIT IN THE PROCEEDINGS OF SHRI K.N. MUTHA CON FIRMING THAT HE HAS NOT ITA NOS. 201 & 202/PN/2012 SHRI SHETE RAMESHWAR GANPATRAO A.Y. 2005-06 RECEIVED ANY SUCH LOAN FROM SHRI K.N. MUTHA. ASSESS EE ALSO SUBMITTED THAT THE SAID CHEQUE DATED 11.03.2005, THOUGH SIGNED BY HIM, WAS BLANK AND WAS CERTAINLY NOT IN FAVOUR OF SHRI K.N. MUTHA. IT IS A LSO NOTABLE THAT NO HUNDI OR ANY OTHER PROMISSORY NOTES EVIDENCING GIVING OF LOA N BY SHRI K.N. MUTHA TO ASSESSEE HAS BEEN FOUND BY THE REVENUE. NOTABLY, AS SESSEE CANVASSED THAT HIS DENIAL OF HAVING RECEIVED THE ALLEGED LOAN FROM SHRI K.N. MUTHA WAS IN HIS PRESENCE AND THE SAME WAS NOT CONTRADICTED BY SHIR K.N. MUTHA. 10. ALL THE AFORESAID POINTS, BROUGHT OUT BY THE AS SESSEE AND ACCEPTED BY THE CIT(A), HAVE NOT BEEN PROVED FALSE BY THE REVEN UE AT ANY STAGE. THEREFORE, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN HOLDING THAT THE REVENUE HAS NOT ESTABLISHED BEYOND DOUBT THAT ASSES SEE HAD IN-FACT RECEIVED ANY LOAN OF RS.10,00,000/- FROM SHRI K.N. MUTHA. TH E AFORESAID INFERENCE OF THE CIT(A), HAVING REGARD TO THE FACTS AND CIRCUMST ANCES OF THE CASE AND MATERIAL ON RECORD, IS JUSTIFIED. ACCORDINGLY, THE ACTION OF THE CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271D OF THE ACT FO R ALLEGED CONTRAVENTION OF SECTION 269SS OF THE ACT IS HEREBY AFFIRMED. 11. IN THE RESULT, APPEAL OF THE REVENUE I.E. ITA N O. 201/PN/2012 IS DISMISSED. 12. ITA NO. 202/PN/2012 IS WITH REGARD TO THE LEVY OF PENALTY UNDER SECTION 271E OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD REPAID THE ALLEGED LOAN OF RS.10,00,000/- TO SHRI K.N. MUTHA IN CONTRAVENTI ON OF THE PROVISIONS OF SECTION 271T OF THE ACT. SINCE IT HAS BEEN HELD, IN APPEAL RELATING TO THE LEVY OF PENALTY UNDER SECTION 271D OF THE ACT, THAT THER E IS NO PROOF THAT ASSESSEE HAD ACCEPTED SUCH A LOAN, THE QUESTION OF LEVY OF P ENALTY FOR ITS ALLEGED REPAYMENT IN CONTRAVENTION OF SECTION 271T OF THE A CT DOES NOT ARISE. THEREFORE, THE CIT(A) IN OUR VIEW HAS NO MISTAKE IN DELETING THE PENALTY LEVIED UNDER SECTION 271E OF THE ACT ALSO. ITA NOS. 201 & 202/PN/2012 SHRI SHETE RAMESHWAR GANPATRAO A.Y. 2005-06 13. IN THE RESULT, THE APPEAL OF THE REVENUE I.E. I TA NO. 202/PN/2012 IS ALSO DISMISSED. 14. RESULTANTLY, BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED: 20 TH JUNE, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE