Raman Kumar Malhotra, Kolkata V. ITO, Ward-36(1), Kolkata, Kolkata

ITA 2082/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1084 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M SURANA SHR
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Gift; Reasonable cause; Corroborative evidences
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 2082 / KOL / 2014 ASSESSMENT YEAR :2006-07 RAMAN KUMAR MALHOTRA 3A, MANGOE LANE, KOLKTA- 700 001 [ PAN NO.AFGPM 7356 E ] V/S . INCOME TAX OFFICER, WARD-36(1), KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.M. SURANA, ADVOCATE /BY RESPONDENT SHRI SAURABHKUMAR, ADDL. CIT-DR /DATE OF HEARING 03-10-2017 /DATE OF PRONOUNCEMENT 08-11-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XX, KOLKATA DA TED 01.07.2014 FOR ASSESSMENT YEAR 2006-07, CHALLENGING THE CANCELLATI ON OF PENALTY LEVIED U/S 271E OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER RED TO AS THE ACT) THE GROUNDS OF ASSESSEE ARE REPRODUCED:- X FOR THAT THE LD. COMMISSIONER (APPEAL)XX DISMISS ED THE APPEAL AND CONFIRMED THE ORDER PASSED BY THE LD. JOINT COMMISS ION OF INCOME TAX RANGE IMPOSING PENALTY OF RS.6,50,000/- WHICH IS IL LEGAL AND VITIATED BY ERRORS OF JURISDICTION. X THAT THE LD. JOINT COMMISSION OF INCOME TAX MISUN DERSTOOD FACTS AND THERE BY MISAPPLIED LAW AND IMPOSED PENALTY U/S . 271E OUT OF CONJECTURE AND SURMISED. THE PENALTY NEEDS TO BE DE LETED. ITA NO.2082/KOL/2014 A.Y. 2006-0 7 RAMAN KR. MALHOTRA VS. ITO WD-36(1) KOL. PAGE 2 X THAT THE TRANSACTIONS OF RS.6,50,000/- WAS KEPT W ITH APPELLANT TIME TO TIME BY HIS WIFE FOR THE PURPOSE OF MAKING RESIDENT IAL HOUSE HABITABLE. X IT WAS NEITHER DEPOSIT OR LOAN. THE PENALTY U/S 2 71E IS NOT CALLED FOR. THE PENALTY WAS IMPOSED BY THE LD. JCIT, RANGE-36 W HEN THE QUANTUM OF APPEAL WAS PENDING BEFORE THE LD. CIT(A) XX/KOL. X THAT THE ITO DID NOT INITIATE ANY PENALTY PROCEED ING U/S. 271E OF THE IT ACT, 1961. THE APPELLANT CRAVES LEAVE TO ADDUCE FURTHER GROUND OR GROUNDS AS THE TIME OF HEARING. SHRI S.M. SURANA, LD. ADVOCATE APPEARED ON BEHALF O F ASSESSEE AND SHRI SAURABH KUMAR, LD. DEPARTMENTAL REPRESENTATIVE REPR ESENTED ON BEHALF OF REVENUE. 2. ALL THE GROUNDS ARE INTER-RELATED AND THEREFORE BEING TAKEN UP TOGETHER. THE INTER-RELATED ISSUE RAISED BY ASSESSEE IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAI NING PENALTY OF 6.50 LAKH U/S. 271E OF THE ACT. 3. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND HAS FILED HIS RETURN DECLARING AN INCOME OF 96,261/- ONLY. HOWEVER, ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDE R DATED 16.12.2011 AFTER MAKING CERTAIN ADDITIONS / DISALLOWANCE IN THE TOTA L INCOME OF THE ASSESSEE. 4. DURING THE YEAR, ASSESSEE HAS SHOWN REPAYMENT OF LOAN OF 6.50 LAKH IN CASH TO HIS WIFE SMT. VIMMI MALHOTRA. AS PER TH E AO THE REPAYMENT OF LOAN IN CASH IS PROHIBITED U/S 269T OF THE ACT. THEREFOR E, AO CALLED UPON THE ASSESSEE FOR LEVYING THE PENALTY U/S 271E OF THE AC T. IN COMPLIANCE THERETO, ASSESSEE SUBMITTED THAT THE LOAN WAS REPAID TO HIS WIFE IN CASH AS SHE WAS IN AN URGENT NEED OF MONEY FOR THE REPAIR OF HOUSE. TH E ASSESSEE FURTHER SUBMITTED THAT THE IMPUGNED REPAYMENT OF LOAN IS RE PRESENTING THE TRANSACTIONS BETWEEN HUSBAND-AND-WIFE AND THEREFORE THE PENALTY CANNOT BE LEVIED ON ACCOUNT OF TECHNICAL DEFAULT U/S 269T OF THE ACT. HOWEVER, AO HAS DISREGARDED THE CONTENTION OF ASSESSEE BY OBSERVING AS UNDER:- ITA NO.2082/KOL/2014 A.Y. 2006-0 7 RAMAN KR. MALHOTRA VS. ITO WD-36(1) KOL. PAGE 3 A) NO DOCUMENTARY EVIDENCE HAS BEEN FILED BY ASSESS EE TO SUBSTANTIATE THE CLAIM THAT THE MONEY WAS REQUIRED FOR THE PURPO SE OF REPAIRING OF ASSESSEES WIFE HOUSE; B) THE ASSESSEE AND HIS WIFE WERE MAINTAINING BANK ACCOUNT IN SAME BRANCH OF JAMMU AND KASHMIR BANK. THEREFORE, THE AM OUNT WOULD HAVE BEEN EASILY REPAID BY THE ASSESSEE THROUGH BANKING CHANNEL THAT THERE WAS NO REASON WHICH PREVENTED THE ASSESSEE TO MAKE THE PAYMENT OTHER THAN BANKING CHANNEL. IN VIEW OF ABOVE, AO WAS OF THE VIEW THAT THE PROVI SION OF SECTION 269T OF THE ACT HAS BEEN VIOLATED AND ACCORDINGLY THE AO LEVIED THE PENALTY U/S. 271E OF THE ACT FOR 6.50 LACS. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- .. AFTER GOING THROUGH THE FACT AND CIRCUMSTANCE S OF THE CASE I FIND THAT THE FACT REMAINS THAT SMT VIMMI MALHOTRA GAVE THE SAID AMOUNT OF RS.6,50,000/- IN CASH TO THE APPELLANT. THE APPELLA NT KEPT THIS MONEY IN HIS PERSONAL ACCOUNT AND THE SAME WAS SHOWN IN THE PERSONAL BALANCE SHEET AS LIABILITY. THE APPELLANT COULD NOT GIVE AN Y SUPPORTING EVIDENCE WITH REGARD TO RESIDENTIAL FLAT GIFTED BY HIS FATHE R-IN-LAW WHICH NEEDED RENOVATION/REPAIRING. IT IS NOT UNDERSTOOD AS TO WH Y THE AMOUNT WAS REPAID IN CASH WHEREAS BOTH HUSBAND AND WIFE WERE H AVING THEIR BANK ACCOUNT I THE SAME BRANCH. IN VIEW OF THE FACT DISC USSED ABOVE AND IN ABSENCE OF SUPPORTING DOCUMENTS/DETAILS FILED BY TH E APPELLANT FOR CONSIDERATION TO SUBSTANTIATE HIS CLAIM, I DO NOT F IND ANY INFIRMITY IN THE AO'S ORDER. THEREFORE, THE APPEAL FILED IS DISMISSE D. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPE AL BEFORE US. 6. LD. AR BEFORE US SUBMITTED THAT NONE OF THE AUTH ORITIES BELOW HAS DOUBTED THE GENUINENESS OF THE TRANSACTIONS. THE AM OUNT OF LOAN WAS DULY REFLECTED IN THE BOOKS OF ACCOUNT OF ASSESSEE. ALL THE NECESSARY DISCLOSURES WERE MADE IN THE RETURN FILED BY ASSESSEE AS WELL A S BY HIS WIFE WHICH WERE SCRUTINIZED U/S 143(3) OF THE ACT. LD. AR FURTHER S UBMITTED THAT THE PENALTY U/S 271E CANNOT BE LEVIED AS THE AMOUNT OF LOAN TRANSAC TIONS WAS GENUINE AND IN SUPPORT OF ASSESSEES CLAIM HE RELIED ON THE JUDGME NT OF HON'BLE HIGH COURT ITA NO.2082/KOL/2014 A.Y. 2006-0 7 RAMAN KR. MALHOTRA VS. ITO WD-36(1) KOL. PAGE 4 OF JHARKHAND IN THE CASE OF OMEC ENGINEERS VS. CIT REPORTED IN 217 CTR 144 (JAR) WHERE THE HON'BLE HIGH COURT HAS HELD THA T:- THERE BEING NO FINDING OF AO, CIT(A) OR TRIBUNAL T HAT THE TRANSACTIONS IN VIOLATION OF S. 269SSS WERE NOT GENUINE, ASSESSE ES RETURN HAVING BEEN ACCEPTED UNDER S. 143(3) AFTER SCRUTINY, THE BEING ALSO NO FINDING THAT TRANSACTIONS WERE MALA FIDE AIMED AT DISCLOSIN G CONCEALED MONEY, IMPOSITION OF PENALTY UNDER S. 271D MERELY FOR TECH NICAL MISTAKE COULD NOT BE SUSTAINED LD. AR ALSO RELIED ON THE JUDGMENT OF HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT SUNIL KUMAR GOEL REPORTED IN 315 ITR 163 (P&H) WHERE THE HON'BLE COURT HELD AS UNDER:- A FAMILY TRANSACTION BETWEEN TWO INDEPENDENT ASSESS EES BASED ON AN ACT OF CASUALNESS, SPECIALLY IN A CASE WHERE THE DISCLOSUR E THEREOF IS CONTAINED IN THE COMPILATION OF ACCOUNTS AND WHICH HAS NO TAX EF FECT ESTABLISHES 'REASONABLE CAUSE' UNDER SECTION 273B. SINCE THE AS SESSEE HAD SATISFACTORILY ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B, HE MUST BE DEEMED TO HAVE ESTABLISHED SUFFICIENT CAUSE FOR NOT INVOKING THE PENAL PROVISIONS OF SECTIONS 271D AND 271E AGAINST HIM. [PARAS 13, 14] HENCE, THERE WAS NO MERIT IN THE APPEAL FILED BY TH E REVENUE AND THE SAME DESERVED TO BE DISMISSED. LD. AR FURTHER SUBMITTED THAT THE PENALTY PROCEEDIN GS U/S. 271E OF THE ACT WAS NOT INITIATED AT THE TIME OF ASSESSMENT PROCEED INGS U/S 147/143(3) OF THE ACT. IN VIEW OF ABOVE LD. AR BEFORE US PRAYED TO QU ASH THE PENALTY PROCEEDINGS. ON THE OTHER HAND, LD. HEAVILY RELIED ON THE ORDER OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; IN CLUDING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. IN T HE CASE BEFORE US PENALTY WAS LEVIED BY AUTHORITIES BELOW ON ACCOUNT OF REPAY MENT OF LOAN IN CASH WHICH IS PROHIBITED U/S 269T OF THE ACT. 7.1 WE OBSERVE THAT IN MANY CASES COURTS HAVE TAKEN A VIEW THAT NO PENALTY U/S 271E OF THE ACT CAN BE LEVIED IF GENUIN ENESS OF THE TRANSACTIONS ITA NO.2082/KOL/2014 A.Y. 2006-0 7 RAMAN KR. MALHOTRA VS. ITO WD-36(1) KOL. PAGE 5 HAS NOT BEEN DOUBTED. IN HOLDING SO, WE FIND SUPPOR T AND GUIDANCE FROM THE JUDGMENT OF HON'BLE HIGH COURT OF JHARKAND IN THE C ASE OF OMEC ENGINEERS (SUPRA) WHERE THE PRINCIPLE LAID DOWN BY THE COURT DISCUSSED ABOVE ARE EXACTLY IDENTICAL TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THE INSTANT CASE, NONE OF THE AUTHORITIES BELOW HAS DOU BTED THE GENUINENESS OF TRANSACTIONS. THEREFORE, RESPECTFULLY THE DECISION IN THE CASE OF OMEC ENGINEERS (SUPRA) WE DELETE THE PENALTY OF 6.50 LAKH LEVIED U/S 271E OF THE ACT. THUS WE ALLOW THE GROUND OF APPEAL OF THE ASSE SSEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 08 /11/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP #- 08 / 11 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RAM KR. MALHOTRA, 3A, MANGOE LANE, KOLKA TA-001 2. /RESPONDENT-ITO, WARD-36(1), KOLKATA 3. / 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5. 3 66/, /, / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO /,