Shri Bhupendrakumar Bhailalbhai Patel, Ahmedabad V. The Jt.CIT.,Range-6, Ahmedabad

ITA 2121/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5798 (ITAT-AHMEDABAD)
• Duration Of Justice: 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH
• Assessee Lawyers: G S PATEL
• Keywords: Corroborative evidences
• Section: 271D; 68; 69; 6

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD BEFORE SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER SHRI BHUPENDRAKUMAR BHAILALBHAI PATEL, PROP. OF M/S SILPHOCHEM INDUS., 268, GIDC, PHASE-II, VATVA, AHMEDABAD. VS. JT. CIT, RANGE-6, AHMEDABAD. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI G. S. PATEL, AR REVENUE BY:- SHRI P. R. GHOSH, DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST CO NFIRMING PENALTY OF RS.23,000/- UNDER SECTION 271D. 2. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO VERIFIED ANNEXURE A-3, TO THE AU DIT REPORT INDICATING THE DEPOSITS AS EXCEEDING THE LIMIT SATI SFIED IN SECTION 269SS. IT WAS NOTICED THAT ASSESSEE HAS DEPOSITED A SUM OF RS .23,000/- IN CASH ON 8.7.2005 AND HAS ACCORDINGLY VIOLATED PROVISIONS OF SECTION 269SS ATTRACTING THE PENALTY UNDER SECTION 271D OF THE I. T. ACT, 1961. THIS DEPOSIT IN THE BANK ACCOUNT BEING O/D ACCOUNT IN ST ANDARD CHARTERED BANK, AHMEDABAD WAS MADE IN CASH ON 8.7.2005. IT WA S EXPLAINED TO THE AO THAT ASSESSEE HAD A LIMIT IN THE O/D ACCOUNT AT RS.2,01,600/- UPTO ITA NO.2121/AHD/2010 ASST. YEAR :2006-07 2 31.7.2005. ON 20.6.2005 THE OUTSTANDING BALANCE WAS NOTICED AT RS.1,93,942/-. THERE WAS A TELEPHONIC INFORMATION T O THE ASSESSEE THAT FURTHER CHEQUES MAY NOT BE HONOURED AS ASSESSEE IS APPROACHING THE O/D LIMIT. ACCORDINGLY A SUM OF RS.23,000/- WAS BORROWE D FROM MRS. M. K. TRIVEDI AND WAS DEPOSITED IN THE BANK SO AS TO REDU CE THE DEBIT BALANCE. IN RESPONSE TO PENALTY NOTICE THE ASSESSEE FURNISHE D FOLLOWING REPLY TO THE AO:- FROM BHUPENDRAKUMAR BHAILALBHAI PATEL, PROP. OF M/S SULPHOCHEM INDUS., 268/1 GIDC PHASE II, VATVA, AHMEDABAD 382445 12/06/2008 TO THE INCOME-TAX OFFICER, WARD 6(4), AHMEDABAD. DEAR SIR, RE: PENALTY PROCEEDING U/S 271D WITH REFERENCE TO THE ABOVE I SUBMIT THAT I HAD OD A/C WITH STANDARD CHARTERED BANK AHMEDABAD. MY LIMIT UPTO 31/07/2007 WAS RS.201600/- . ON 30/6/2005. THE OUTSTANDING BALANCE WAS RS.193942/-. TBANK TELEPHON ICALLY INFORMED ME THAT NO FURTHER CHEQUES WILL BE HONORED AND AS SUCH BECAUSE OF THE BAD NECESSITY THE DEPOSIT WAS REQUIRED TO BE MADE. THE DEPOSITOR MRS. M. K. T RIVEDI (THROUGH HER HUSBAND) PERSONALLY WENT TO BANK AND DEPOSITED RS.23000/- TO CO-OPERATE ME IN MY BAD FINANCIAL POSITION. IN VIEW OF THESE FACTS I RESPEC TFULLY SUBMIT THAT THE DEPOSIT WAS MADE FOR BAD NECESSITY AND THERE WAS NO INTENSION T O IGNORE THE LAW. THIS WAS ONLY THE TRANSACTION AND HENCE I REQUEST YOU TO CONSIDER MY BONAFIDES AND DROP THE PENALTY PROCEEDINGS. THANKING YOU, YOURS FAITHFULLY, BHUPENDRABHAI B. PATEL THE AO WAS, HOWEVER, NOT SATISFIED AND LEVIED THE P ENALTY. 3. THE LD. CIT(A) ALSO CONFIRMED THE PENALTY BY OBS ERVING AS UNDER :- 3 4. I HAVE GONE THROUGH THE REPLY OF THE ASSESSEE A ND FOUND NOT TENABLE IN LAW AND WITHOUT ANY SUPPORTING EVIDENCE. THEREFORE, FURTHER OPPORTUNITY WAS ALLOWED TO THE ASSESSEE FOR COMPLIANCE AT 11.00 A.M. OF 21.10.2008 BUT NO FURTHER REPLY WAS FURNISHED. IT APPEARS THAT THE ASSESSEE HAS NOTHING TO SAY IN HIS SUPPORT. IN VIEW OF THE ABOVE FACTS, I AM SATISFIED THAT THE ASSESSEE HAS W ILLFULLY AND DELIBERATELY ACCEPTED DEPOSIT OF RS.23,000/- IN CASH ON 8.7.2005 AND VIOL ATED THE PROVISIONS OF SECTION 269SS OF THE IT ACT, 1961. THEREFORE, THE ASSESSEE IS LIABLE FOR PENALTY U/S 271D FOR ACCEPTING LOAN/DEPOSIT ABOVE RS.20,000/- OTHER THAN BY ACCOUNT PAYEE CHEQUE FROM MRS. M.K. TROIVEDI. THE ASSESSEE IS THEREFORE LIABL E TO PAY PENALTY U/S 271D OF THE I.T.ACT, 1961, MINIUM AND MAXIMUM PENALTY LEVIABLE OF THE I.T. ACT, 1961 WHICH COMES TO RS.23,000/-. 4. AFTER CONSIDERING THE FACTS OF THE CASE, A PENAL TY OF RS.23,000/- IS LEVIED IN THIS CASE, DEMAND NOTICE AND CHALLAN ARE ISSUED. 4. AGAINST THIS, THE LD. AR FOR THE ASSESSEE SUBMIT TED THAT HE HAS EXPLAINED THE POSITION CORRECTLY, NO ADDITION U/S 6 8 OR U/S 69 HAS BEEN MADE FOR UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOU NT AND FURTHER THERE IS NO MATERIAL WITH THE AO TO SHOW THAT THE EXPLANA TION FURNISHED BY THE ASSESSEE IS FALSE. THEREFORE PENALTY OUGHT NOT TO H AVE BEEN LEVIED. 5. THE LD. DR SUPPORTED THE ORDERS OF AUTHORITIES B ELOW. 6. I HAVE HEARD THE PARTIES AND CAREFULLY PERUSED T HE MATERIAL ON RECORD. IN MY CONSIDERED VIEW THE ASSESSEE HAS FURN ISHED AN EXPLANATION WHICH HAS NOT BEEN FOUND FALSE OR INCORRECT. THIS I S ONE OF THE PLAUSIBLE EXPLANATIONS FOR DEPOSITING MONEY IN CASH. HIS OD L IMIT STATED BY THE BANK WAS APPROACHING FAST AND THERE WAS AN APPREHEN SION OF CHEQUES BEING DISHONOURED AND ACCORDINGLY IMMEDIATELY CASH WAS DEPOSITED BY BORROWING FROM MRS. M. K. TRIVEDI. THE AUTHORITIES BELOW HAVE NOT MADE ANY ADDITION IN RESPECT OF THIS CASH DEPOSIT MEANIN G THEREBY THAT THEY HAVE ACCEPTED IT TO BE GENUINE BORROWING. ONCE THIS IS SO AND GENUINENESS OF THE TRANSACTION IS NOT DOUBTED, THEN EXPLANATION FURNISHED BY THE ASSESSEE SHOULD HAVE BEEN CONSIDERED SATISFA CTORY UNLESS ANY 4 MATERIAL IS COLLECTED BY THE AO TO SHOW THAT FACTS STATED IN THE EXPLANATION ARE INCORRECT OR FALSE. THE AO SHOULD H AVE VERIFIED FROM THE BANK AS TO WHAT IS THE OD LIMIT AND WHETHER THERE I S ANY CONTRADICTION IN WHAT IS STATED BEFORE HIM. FURTHER GENUINENESS OF T HE TRANSACTION SHOULD HAVE BEEN VERIFIED AND SHOWN THAT IT WAS IN FACT MO NEY OF THE ASSESSEE AND NOT THAT OF MRS. TRIVEDI. ONCE HAVING ACCEPTED THE GENUINENESS OF THE TRANSACTION, THE EXPLANATION CANNOT BE TREATED AS U NSATISFACTORY UNLESS IT IS INVESTIGATED AND FOUND TO BE FALSE. IF THE EVENTS N ARRATED IN THE EXPLANATION COULD HAVE TAKEN PLACE THEN WITHOUT CON TRADICTING THE FACTS STATED IN THE EXPLANATION, IT CANNOT BE REJECTED. I F THE LAW PROVIDES THAT PENALTY CAN BE LEVIED AS EXPLANATION IS NOT SATISFA CTORY THEN SATISFACTION OF THE AO ON THE EXPLANATION FURNISHED BY THE ASSESSEE SHOULD BE OBJECTIVE AND NOT MERELY SUBJECTIVE REJECTING OUT-RIGHTLY, EV EN THOUGH THERE IS NO MATERIAL TO CONTRADICT THE FACTS STATED IN THE EXPL ANATION. I ACCORDINGLY HOLD UNDER THE CIRCUMSTANCES THE EXPLANATION FURNIS HED BY THE ASSESSEE AS SATISFACTORY AND ACCORDINGLY CANCEL THE PENALTY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 7/7/2010 SD/- (D.C.AGRAWAL) ACCOUNTANT MEMBER AHMEDABAD, DATED : 7/7/2010 MAHATA/- 5 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD