ANKITA KNITWEAR LTD, MUMBAI V. ACIT - 12(1)(1), MUMBAI

ITA 2046/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7897 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDHYADHAR V LD
• Assessee Lawyers: MAHESH SABOOLD
• Section: 271D; 271E

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.2046/MUM/2018 ( / ASSESSMENT YEAR: 2011-12) ANKITA KNITWEAR LIMITED E-301, AMAZON CHSL, JAI RAJ NAGAR OFF LINK ROAD, BORIVALI (W) MUMBAI-400 091. / VS. A CIT - 12(1)(1) 2 ND FLOOR, AAYKAR BHAVAN MUMBAI-400 020. ! ./ ./PAN/GIR NO. AABCA-3859-P ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI MAHESH SABOO-LD.AR REVENUE BY : SHRI VIDHYADHAR V.LD.DR / DATE OF HEARING : 16/04/2019 / DATE OF PRONOUNCEMENT : 23/04/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. IN THE AFORESAID APPEAL BY ASSESSEE FOR ASSESSME NT YEAR [AY] 2011- 12, THE ASSESSEE IS AGGRIEVED BY LEVY OF PENALTY US 271D FOR RS.5,58,427/- FOR ALLEGED CONTRAVENTION OF SECTION 269SS AS LEVIE D BY LD.AO VIDE PENALTY ORDER DATED 04/09/2014 AND CONFIRMED BY LD. COMMISS IONER OF INCOME TAX (APPEALS)-20 MUMBAI [CIT(A)] VIDE IMPUGNED ORDER DA TED 23/02/2018. 2 2. DRAWING OUR ATTENTION TO THE TAX AUDIT REPORT, T HE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR], SHRI MAHESH SABOO, SUBMITTED THAT REVENUE PROCEEDED ON WRONG ASSUMPTION OF FACTS THAT THE ASSESSEE ACCEPTED LOANS IN CASH FROM ONE OF ITS DIRECTORS IN CONTRAVENTION OF SECTION 269SS. OUR ATTENTION HAS BEEN DRAWN TO THE LEDGER E XTRACT TO SUBMIT THAT LD. AO MISUNDERSTOOD THAT THE PAYMENTS WAS RECEIVED IN CASH WHEREAS THE ENTRIES OF DEBIT / CREDIT WERE MERELY JOURNAL ENTRIES. IT HAS BEEN SUBMITTED THAT CERTAIN PAYMENTS WERE MADE BY THE DIRECTOR I.E . MR. ANIL KUMAR JHAWAR TO ELECTRICITY DEPARTMENT ON BEHALF OF THE ASSESSEE COMPANY BY WAY OF ACCOUNT PAYEE CHEQUE / DEMAND DRAFT ON 15/07/2010 F OR RS.3,07,227/- AND ON 18/08/2010 FOR RS.2,51,000/- AND THEREFORE, CRED IT WAS GIVEN TO THE SAID DIRECTOR BY WAY OF JOURNAL ENTRIES IN THE BOOKS OF ASSESSEE COMPANY. THE LOWER AUTHORITIES PROCEEDED ON WRONG ASSUMPTION THA T THE SAID ENTRIES WERE CASH ENTRIES. IN THE ABOVE BACKGROUND, IT HAS BEEN SUBMITTED THAT THERE WAS NO VIOLATION OF SECTION 269SS, IN ANY MANNER, A S ALLEGED BY THE REVENUE. OUR ATTENTION HAS ALSO BEEN DRAWN TO THE F ACT THE SIMILAR PENALTY LEVIED U/S 271E ON ACCOUNT OF ALLEGED REPAYMENT OF LOAN IN CASH HAS BEEN DELETED BY THE TRIBUNAL VIDE ITA NO. 6670/MUM/2017 ORDER DATED 30/01/2019. THE LD. DR RELIED UPON THE STAND OF LOW ER AUTHORITIES. 3. UPON CAREFUL CONSIDERATION, WE FIND THAT LOWER A UTHORITIES GOT MISLED BY WRONG ASSUMPTION OF FACT THAT TAX AUDITOR HAS RE PORTED VIOLATION OF SECTION 269SS IN THE TAX AUDIT REPORT. UPON PERUSAL OF RELEVANT EXTRACT OF TAX AUDIT REPORT, WE FIND THAT NO SUCH VIOLATION HA S BEEN REPORTED EITHER IN CLAUSE 24(A) OR IN CLAUSE 24(B) AS MISREAD BY THE R EVENUE. THE OBSERVATION YES HAS BEEN PUT BY THE TAX AUDITOR AGAINST CLAUSE 24(C) WHICH IS NOTHING 3 BUT MERE AFFIRMATION BY THE TAX AUDITOR THAT A CERTIFICATE HAS BEEN OBTAINED FROM THE ASSESSEE REGARDING TAKING OR ACCEPTING LOA N OR DEPOSIT, OR REPAYMENT OF THE SAME THROUGH AN ACCOUNT PAYEE CHEQ UE OR BANK DRAFT. 4. THE PERUSAL OF LEDGER EXTRACT OF THE SAID DIRECT OR IN ASSESSEES BOOK CORROBORATE THE SUBMISSIONS MADE BY LD. AR THAT THE CREDIT WAS GIVEN BY WAY OF JOURNAL ENTRY ONLY AND THERE WAS NO ACCEPTAN CE OF LOAN IN CASH SINCE THE DIRECTOR HAD PAID CERTAIN ELECTRICITY CHARGES O N BEHALF OF THE ASSESSEE COMPANY, THE CREDIT OF WHICH WAS GIVEN THROUGH JOUR NAL ENTRIES. 5. UNDER THE CIRCUMSTANCES THE IMPUGNED PENALTY COU LD NOT BE SUSTAINED FROM ANY ANGLE. THEREFORE, BY DELETING THE SAME, WE ALLOW ASSESSEES APPEAL. 6. RESULTANTLY, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23/04/2019. SR.PS:-JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !% / THE APPELLANT 2. &'!% / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. ()& * , * , / DR, ITAT, MUMBAI 6. ),-. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.