Sathishkumar, CHENNAI V. JCIT Tambaram Range, Chennai

ITA 2138/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6256 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR ADD L
• Assessee Lawyers: P RAJASEKHARAN
• Keywords: Reasonable cause
• Section: 271D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2138/CHNY/2018 ( )( / ASSESSMENT YEAR : 2014-15 SHRI SATHISH KUMAR, NO.2/415, KANNI KOYIL 4 TH CROSS ST., CHITHALAPAKKAM, CHENNAI - 600 073. PAN : CHZPS 7213 M V. THE JOINT COMMISSIONER OF INCOME TAX, TAMBARAM RANGE, TAMBARAM. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI P. RAJASEKHARAN, CA -.+, / 0 / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, A DDL.CIT 1 / 2$ / DATE OF HEARING : 04.04.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 30.04.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -10, CHENN AI, DATED 22.05.2018, FOR THE ASSESSMENT YEAR 2014-15, CONFIR MING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271D OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2138/CHNY/18 2. SHRI P. RAJASEKHARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE, A SOFTWARE P ROFESSIONAL, BORROWED 1,50,000/- FROM ONE SHRI MURUGANANDAM AND 42,000/- FROM ONE SHRI SARAVANAN BY CASH TO MEET THE URGENT EXPENSES WITH REGARD TO SHARE TRADING. ACCORDING TO THE LD. REPR ESENTATIVE, THE ASSESSEE TRIED FOR LOAN FROM BANKS. HOWEVER, THE L OAN WAS NOT SANCTIONED BY THE BANKS. THE ASSESSEE ALSO TRIED F OR CREDIT CARD FACILITY WHICH WAS ALSO DECLINED BY THE BANK. THER EFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE WAS FORCED TO RECEIVE CASH FROM SHRI MURUGANANDAM AND SHRI SARAVANAN. ACCORDI NG TO THE LD. REPRESENTATIVE, BOTH SHRI MURUGANANDAM AND SHRI SAR AVANAN ARE WORKING IN PACKERS & MOVERS. THEY DO NOT HAVE BANK ING FACILITIES TO TRANSFER THE MONEY TO THE ASSESSEES ACCOUNT. THER EFORE, THE ASSESSEE WAS FORCED TO OBTAIN LOAN IN CASH IN ORDER TO MEET THE URGENT NECESSITY OF PAYING TO STOCK BROKER. HENCE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) IS NOT JUSTIFI ED IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI R. CLEMENT RAMESH KUMAR, T HE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE ADMITTEDLY BORROWED 1,92,000/- FROM TWO INDIVIDUALS, NAMELY, SHRI 3 I.T.A. NO.2138/CHNY/18 MURUGANANDAM AND SHRI SARAVANAN IN CASH. EVEN THOU GH THE ASSESSEE CLAIMED BEFORE THE CIT(APPEALS) THAT THE M ONEY WAS DEPOSITED IN HDFC BANK ACCOUNT FOR ONLINE SHARE TRA DING, ACCORDING TO THE LD. D.R., NO EXCEPTIONAL CIRCUMSTANCES WHICH NECESSITATED FOR BORROWING LOAN IN CASH WAS SUBSTANTIATED. THER EFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFI RMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS RECEIVED 1,50,000/- FROM SHRI MURUGANANDAM AND 42,000/- FROM SHRI SARAVANAN. IT IS ALSO NOT IN DISPUTE THAT SHRI MURUGANANDAM IS RUNNING A SMALL T EA SHOP AND SELLING TEA AND SNACKS TO THE NEARBY COMPANIES. SH RI SARAVANAN APPEARS TO BE WORKING IN PACKERS AND MOVERS. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT BOTH OF T HEM HAVE NO BANKING FACILITIES TO TRANSFER THEIR FUNDS TO THE A SSESSEE. THEREFORE, THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER TH AT THERE WAS A NECESSITY TO RECEIVE MONEY IN CASH. BEFORE THE CIT (APPEALS), THE ASSESSEE CLAIMED THAT HE HAS TO MAKE URGENT PAYMENT FOR PURCHASE OF SHARES FROM SHARE BROKERS. THEREFORE, THERE WAS A COMPULSION 4 I.T.A. NO.2138/CHNY/18 ON THE PART OF THE ASSESSEE TO TAKE THE LOAN IN CAS H. THE ASSESSEE ALSO CLAIMED BEFORE THE CIT(APPEALS) THAT ATTEMPTS MADE BY HIM TO OBTAIN PERSONAL LOAN FROM BANKS WERE FAILED. EVEN THE ATTEMPT BY THE ASSESSEE TO OBTAIN CREDIT CARD FACILITY ALSO DE CLINED BY THE BANKS. THEREFORE, THE ASSESSEE EXPLAINED TO THE CI T(APPEALS) THAT THERE WAS REASONABLE CAUSE FOR RECEIVING THE LOAN T O THE EXTENT OF 1,92,000/- FROM THE ABOVE SAID TWO PERSONS IN CASH. 5. WE FIND THAT THE CLAIM OF THE ASSESSEE THAT HE M ADE AN ATTEMPT TO BORROW LOAN AND ALSO CREDIT FACILITY FRO M BANKS IS NOT IN DISPUTE. IT IS ALSO NOT IN DISPUTE THAT BANKS REFU SED TO SANCTION LOAN AND ALSO CREDIT CARD FACILITY. IN THOSE CIRCUMSTAN CES, FOR MEETING THE URGENT NEED, THE ASSESSEE BORROWED LOAN FROM SHRI M URUGANANDAM AND SHRI SARAVANAN IN CASH. IT IS ALSO NOT IN DISP UTE THAT SHRI MURUGANANDAM AND SHRI SARAVANAN DO NOT HAVE BANKING FACILITY TO TRANSFER THEIR FUNDS TO THE ASSESSEE IMMEDIATELY. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THERE WAS A REASONABLE CAUSE ON THE PART OF THE ASSESSEE TO RECEIVE THE LOAN FROM THE ABOVE SAID TWO PERSONS IN CASH. IN V IEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF BOT H THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET 5 I.T.A. NO.2138/CHNY/18 ASIDE AND THE PENALTY LEVIED BY ASSESSING OFFICER U NDER SECTION 271D OF THE ACT AS CONFIRMED BY THE CIT(APPEALS) IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH APRIL, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 30 TH APRIL, 2019. KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A)-10, CHENNAI-34 4. PRINCIPAL CIT- 7, CHENNAI 5. 8; -2 /DR 6. <( = /GF.