Nilesh Bajirao Chavan, Pune V. Joint Commissioner of Income-tax,

ITA 204/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9344 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMRAT RAHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 204/PUN/2015 / ASSESSMENT YEAR : 20 10 - 11 NILESH BAJIRAO CHAVAN, S. NO. 53, FLAT NO. 11, C - BUILDING, NARAYAN BAUG, SINHGAD ROAD, VADGAON BK, PUNE 411051 PAN : AFLPC3956P ....... / APPELLANT / V S. JOINT COMMISSIONER OF INCOME TAX, RANGE 7, PUNE / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUHAS P. BORA REVENUE BY : S HRI SAMRAT RAHI / DATE OF HEARING : 09 - 05 - 2017 / DATE OF PRONOUNCEMENT : 16 - 0 6 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 12 - 12 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11 CONFIRMING LEVY OF PENALTY U/S. 271 E O F THE INCOME TAX ACT, 1961 (HEREINAF TER REFERRED TO AS THE ACT ). 2 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 2. THE FACTS OF THE CASE AS EM ERGING FROM RECORDS ARE: THE ASSESSEE IS AN EMPLOYEE OF M/S. PINNACLE CONSTRO AND ECOHOMES PVT. LTD. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11 ON 02 - 07 - 2010 DECLAR ING TOTAL INCOME AS RS.1,94,488/ - . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RECEIVED RS.26,00,000/ - IN HIS SAVINGS BANK ACCOUNT . THE AFORESAID AMOUNT WAS RECEIVED BY WAY OF CHEQUES FROM M/ S. PINNACLE CONSTRUCTION, A PROPRIETARY CONCERN OF SHRI GAJENDRA KUMAR PAWAR, EMPLOYER OF THE ASSESSEE. THE ASSESSEE REPAID THE ENTIRE AMOUNT TO M/S. PINNACLE CONSTRUCTIONS DURING THE SAME FINANCIAL YEAR. RS.5,00,000/ - WAS REPAID BY WAY OF TWO CHEQUES AN D THE REMAINING AMOUNT OF RS.21,00,000/ - WAS REPAID BY THE ASSESSEE IN CASH AFTER WITHDRAWING THE SAME FROM BANK . THE ASSESSING OFFICER OBSERVED THAT THESE AMOUNTS WERE RECEIVED BY THE ASSESSEE AS ADVANCE /LOAN AND HA S BEEN REPAID BY THE ASSESSEE IN VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT. THE ASSESSING OFFICER, THUS, LEVIED PENALTY OF RS.21,00,000/ - U/S. 271E OF THE ACT. AGGRIEVED BY THE ORDER DATED 29 - 04 - 2013 LEVYING PENALTY U/S. 271E OF THE ACT, THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY ORDER. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE LEVY OF PENALTY U/S. 271E OF THE ACT. 3. SHRI NIKHIL PATHAK WITH SHRI SUHAS P. BORA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A PROJECT ENGINEER AND IS A SALARIED EMPLOYEE OF M/S. PINNACLE CONSTRO & ECOHOMES PVT. LTD. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2010 - 11, THE ASSESSEE RECEIVED 3 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 VARIOUS CHEQUES AGGREGATING TO RS.26,00,000/ - FROM M/S. PINNACLE CONSTRUCTION. THE SAID AMOUNT WAS RECEIVED BY THE ASS ESSEE IN SAVING BANK ACCOUNT NO. 23/12169 WITH SHREE SHARDA CO - OPERATIVE BANK LTD., PUNE. THE AMOUNT RECEIVED FROM M/S. PINNACLE CONSTRUCTION WAS WITHDRAWN BY THE ASSESSEE BY SELF CHEQUES ON THE SAME DATE AND HANDED OVER TO SHRI GAJENDRA PAWAR, PROPRIET OR, M/S. PINNACLE CONSTRUCTION . THERE WAS NO ELEMENT OF LOAN OR DEPOSIT IN THE SAID TRANSACTION. THE LD. AR REFERRED TO THE BANK STATEMENT OF ASSESSEE FROM 09 - 04 - 2009 TO 30 - 09 - 2010. THE LD. AR POINTED THAT THE ASSESSEE RECEIVED RS.5,00,000/ - ON 09 - 04 - 20 09 FROM M/S. PINNACLE CONSTRUCTION AND ON THE SAME DATE RS.2,00,000/ - WAS TRANSFERRED TO M/S. PINNACLE CONSTRUCTION BY WAY OF CHEQUE AND THE REMAINING AMOUNT RS.3,00,000/ - WAS TRANSFERRED TO M/S. PINNACLE CONSTRUCTION ON 11 - 04 - 2009 BY ANOTHER CHEQUE. THER EAFTER, THE ASSESSEE RECEIVED RS.12,00,000/ - BY WAY OF TWO BANK TRANSFERS ON 12 - 06 - 2009 AND ON THE SAME DATE I.E. 12 - 06 - 2009 THE ENTIRE AMOUNT OF RS.12,00,000/ - WAS WITHDRAWN BY WAY OF THREE SELF DRAWN CHEQUES OF RS.4,00,000/ - EACH. AGAIN, THE ASSESSEE R ECEIVED RS. 5,00,000/ - BY WAY OF TRANSFER FROM M/S. PINNACLE CONSTRUCTION ON 13 - 06 - 2009 AND ON THE SAME DATE THE SAID AMOUNT OF RS.5,00,000/ - WAS WITHDRAWN BY SELF CHEQUE AND THE CASH WAS REMITTED TO SHRI GAJENDRA KUMAR PAWAR . ON 16 - 06 - 2009 THE ASSESSEE RE CEIVED RS.4,00,000/ - BY WAY OF BANK TRANSFER AND ON THE SAME DATE 16 - 06 - 2009 THE ASSESSEE WITHDREW THE AMOUNT BY SELF CHEQUE AND HANDED OVER THE CASH TO SHRI GAJENDRA KUMAR PAWAR. THE MANNER IN WHICH THE AMOUNT RECEIVED HAS BEEN WITHDRAWN AND REPAID CLEAR LY INDICATES THAT THE AMOUNT RECEIVED BY THE ASSESSEE BY WAY OF CHEQUE/BANK TRANSFER WAS NOT TOWARDS ADVANCES/LOANS OR DEPOSITS. THE ASSESSEE ONLY ALLOWED ACCOMMODATION ENTRY TO HIS EMPLOYER. THE LD. AR FURTHER REFERRED TO THE CONFIRMATION LETTER FROM SH RI GAJENDRA KUMAR PAWAR, PROPRIETOR OF M/S. PINNACLE CONSTRUCTION AT PAGE 15 OF THE PAPER BOOK. THE LD. AR 4 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 SUBMITTED THAT SHRI GAJENDRA KUMAR PAWAR HA S CATEGORICALLY MENTIONED IN THE CONFIRMATION LETTER THAT THESE TRANSACTIONS WERE CARRIED OUT ON ACCOUNT OF BUSINESS EXPEDIENCY, THE BENEFICIAL OWNER OF AMOUNTS WAS ALWAYS M/S. PINNACLE CONSTRUCTION AND THE AMOUNTS ARE NOT LOANS OR ADVANCES. 3.1 THE LD. AR CONTENDED THAT ALONG WITH THE CONFIRMATION LETTER SHRI GAJENDRA KUMAR PAWAR HAS ALSO FURNISHED LEDGER ACCOUNT OF M/S. PINNACLE CONSTRUCTION WHEREIN THE ENTIRE TRANSACTION S ARE RECORDED AND THE ENTRIES MADE IN THE LEDGER ACCOUNTS OF M/S. PINNACLE CONSTRUCTION COINCIDE WITH THE ENTRIES IN THE PASS BOOK OF THE ASSESSEE. IT IS EVIDENT FROM THE DOCUMENTS ON R ECORD THAT THE AMOUNT RECEIVED BY THE ASSESSEE IN HIS BANK ACCOUNT WAS NOT IN THE NATURE OF ADVANCE/LOAN OR DEPOSIT. THEREFORE, THE REPAYMENT OF THE SAID AMOUNT IN CASH DOES NOT VIOLATE THE PROVISIONS OF SECTION 269T OF THE ACT. SINCE, THERE IS NO VIOLAT ION OF PROVISIONS OF SECTION 269T OF THE ACT NO PENALTY U/S. 271E CAN BE FASTENED ON THE ASSESSEE. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE DECISION RENDERED BY THE AHMEDABAD BENCH OF TRIBUNAL IN THE CASE OF BHIKHABHAI DHANJIBHAI PA TEL VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 33 DTR 226. 4. ON THE OTHER HAND SHRI SAMRAT RAHI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE PENALTY LEVIED U/S. 271E OF T HE ACT. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO GIVE VALID REASONS FOR ROUTING OF SAID AMOUNT FROM THE ACCOUNT OF ASSESSEE. DURING THE COURSE OF PROCEEDINGS BEFORE THE AUTHORITIES BELOW THE ASSESSEE HAS CONTENDED THAT THE CHEQUES OF M/S. PIN NACLE CONSTRUCTION WERE DEPOSITED IN THE BANK ACCOUNT OF ASSESSEE DUE TO TECHNICAL PROBLEMS IN THE CHEQUE CLEARING FACILITY. HOWEVER, THE ASSESSEE HAS NOT CLARIFIED AS TO WHAT WAS THE 5 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 TECHNICAL PROBLEM IN CLEARING OF CHEQUES IN THE BANK ACCOUNT OF M/S. PI NNACLE CONSTRUCTION. THE ASSESSEE HAS FAILED TO SUBSTANTIATE BUSINESS EXPEDIENCY FOR DEPOSITING THE CHEQUES OF M/S. PINNACLE CONSTRUCTION IN HIS BANK ACCOUNT. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE AND CONFIRMING THE ORDER OF FIRST APPEL LATE AUTHORITY. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . IT IS AN UNDISPUTED FACT THAT VARIOUS CHEQUES AGGREGATING TO RS.26,00,000/ - W ERE DEPOSITED IN THE BANK ACCOUNT OF ASSESSEE D URING THE PERIOD 09 - 04 - 2009 TO 30 - 09 - 2010. IT IS ALSO AN ADMITTED FACT THAT THE ENTIRE AMOUNT DEPOSITED THROUGH CHEQUE WAS WITHDRAWN BY THE ASSESSEE ON THE SAME DATE EITHER BY WAY OF CHEQUES ISSUED IN THE NAME OF M/S. PINNACLE CONSTRU CTION OR SELF CHEQUES. TWO CHEQUES FOR RS.2,00,000/ - AND RS.3,00,000/ - WERE ISSUED IN THE NAME OF M/S. PINNACLE CONSTRUCTION AND THE REMAINING CHEQUES WERE SELF CHEQUES. THE ASSESSEE HAS FILED A COPY OF BANK STATEMENT. A PERUSAL OF THE BANK STATEMENT SH OWS THAT THE AMOUNT RS.5,00,000/ - DEPOSITED ON 09 - 04 - 2009 IN THE BANK ACCOUNT OF THE ASSESSEE BY WAY OF CHEQUE WAS WITHDRAWN BY WAY OF CHEQUES IN THE NAME OF M/S. PINNACLE CONSTRUCTION RS.2,00,000/ - ON 09 - 04 - 2009 AND RS.3,00,000/ - ON 11 - 04 - 2009. THEREAFTE R, THE AMOUNTS WERE DEPOSITED IN THE BANK ON VARIOUS DATES AND WERE WITHDRAWN ON THE DATE OF DEPOSIT ITSELF BY WAY OF SELF CHEQUES AND PURPORTEDLY RETURNED BY THE ASSESSEE TO SHRI GAJENDRA KUMAR PAWAR, EMPLOYER OF THE ASSESSEE. THE ASSESSEE HAS FILED CO NFIRMATION LETTER FROM SHRI GAJENDRA KUMAR PAWAR, PROPRIETOR OF M/S. PINNACLE CONSTRUCTION AT PAGE 15 OF THE PAPER BOOK. THE RELEVANT EXTRACT OF THE LETTER ADDRESS ED TO INCOME TAX OFFICER, WARD 7(4), PUNE BY SHRI GAJENDRA PAWAR READS AS UNDER : 6 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 REF : ASS ESSMENT PROCEEDINGS IN THE CASE OF NILESH BAJIRAO CHAVAN FOR A.Y. 2010 - 11. SUB : CONFIRMATION. DEAR SIR, I, THE UNDERSIGNED, PROPRIETOR OF PINNACLE CONSTRUCTIONS, DO HEREBY STATE AND SUBMIT AS UNDER : A . THAT DUE TO TECHNICAL PROBLEMS IN CHEQUE CLEARING FACILITY IN THE YEAR 2009 - 10, I HAVE DEPOSITED OUR CHEQUES IN THE ACCOUNT OF MR. NILESH B. CHAVAN. B . THAT MR. NILESH CHAVAN HAS WITHDRAWN THESE AMOUNTS FROM HIS ACCOUNT BY SELF AND GIVEN TO US. C . THAT WE HAVE CARRIED THESE TRANSACTIONS OUT OF BUSINESS EXPEDIEN CY AND NECESSITY. D . THE BENEFICIAL OWNERSHIP OF THESE AMOUNTS ARE ALWAYS WITH MY FIRM PINNACLE CONSTRUCTIONS. E . THAT I AM ENCLOSING HEREWITH THE ACCOUNT EXTRACT OF MR. NILESH CHAVAN IN OUR HAND S FOR THE YEAR 01.04.2009 TO 31.03.2010. F . THESE AMOUNTS ARE NOT LOAN S AND ADVANCES. G . THAT I AM ASSESSED TO TAX UNDER PAN AFEPP7678E, WITH ACIT CENTRAL CIRCLE 1(2), PUNE. H . THAT I HAVE DISCLOSED THESE TRANSACTIONS IN OUR BOOKS OF ACCOUNT FOR F.Y. 2009 - 10. THANKING YOU, YOURS TRULY, FOR PINNACLE CONSTRUCTIONS SD/ - GAJENDRA PAWAR (PROPRIETOR) A PERUSAL OF THE CONFIRMATION LETTER BY SHRI GAJENDRA PAWAR ALONG WITH LEDGER ACCOUNT OF M/S. PINNACLE CONSTRUCTIONS REINFORCE S THE STAND OF ASSESSEE. THUS, THE TRANSACTIONS CLEARLY INDICATE THAT THE AMOUNTS CREDITED IN THE BANK ACCOUNT OF ASSESSEE WERE NOT IN THE NATURE OF LOAN/DEPOSITS OR ADVANCES. 7 ITA NO . 204/PUN/2015, A.Y. 2010 - 11 6. IF THE AMOUNT RECEIVED DOES NOT FALL WITHIN THE CATEGORY OF LOAN DEPOSIT OR ADVANCES EVEN IF I T IS RE PAID BY WAY OF CASH , THE PROVISIONS OF SECTION 269T ARE NOT ATTRACTED. WHEN THERE IS NO VIOLATION OF PROVISIONS OF SECTION 269T , THERE IS NO QUESTION OF LEVYING PENALTY U/S. 271E OF THE ACT. WE FIND MERIT IN THE SUBMISSIONS OF THE LD. AR OF THE AS SESSEE. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED, ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 16 TH DAY OF JUNE, 201 7 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 16 TH JUNE, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, PUNE 4. THE PR. CIT /CIT - 4, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE