DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Tridel Builders & Traders Pvt. Ltd., Kolkata

ITA 2269/KOL/2010

• Counselvise Citation: 226923514 RSA 2010
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 19-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2010
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN SATPATI LD
• Assessee Lawyers: S M SURANA LD
• Section: 143(3)

Judgement Text

, B , , INCOME TAX APPELLATE TRIBUNAL, BENCH- B KOL KATA ( ) BEFORE . , SHRI R.C. SHARMA, ACCOUNTANT MEMBER !' /AND #$ '# , SHRI MAHAVIR SINGH, JUDICIAL MEMBER '% / ITA NO.2269/KOL/2010 A.Y 2006-07 D.C.I.T, CIRCLE-4, KOLKATA - !' - - VERSUS - . M/S. TRIDEL BUILDERS & TRADERS PVT. LTD PAN: AABCT952L ( () / APPELLANT ) ( *+() / RESPONDENT ) () /FOR THE APPELLANT //SHRI NIRANJAN SATPATI, LD. SR.DR *+() / FOR THE RESPONDENT: / SHRI S.M SURANA, ADVOCATE, LD.AR -'!. / 0 /DATE OF HEARING : 03-12--2013 12 / 0 /DATE OF PRONOUNCEMENT:03-12-2013 / ORDER . , SHRI R.C. SHARMA, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER PASSED BY THE LD. CIT(A), DATED 05/04/2010 FOR THE ASSESSMENT YEAR 2006-07, IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271D OF THE I.T ACT 1961 . 2. THE ONLY GRIEVANCE OF REVENUE RELATES TO DELETIO N OF PENALTY OF RS.16,35,000/- IMPOSED U/S. 271D OF THE I.T ACT 1961. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED THE RECORD. FACTS IN BRIEF ARE THAT THE ASSESSEE IS IN THE BUSINESS OF TRADING. T HE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 WAS SUBMITTED ON 24-11-2006. AO OBSERV ED THAT THE ASSESSEE HAD ACCEPTED CASH LOANS OF RS.16,35,000/- FROM TWO PERS ONS AS UNDER:- S.NO . NAME DATE AMOUNT 1. MS. RAKHI KOTHARI 08-03-2006 RS.4,95, 000/- 2. MS. RAKHI KOTHARI 09-03-2006 RS.4,00, 000/- 3. MR. BIKASH KOTHARI 18-12-2005 RS.7,50,000/- ITA NO.2269/KOL/2010-B-AM 2 TOTAL :- RS.16,35,000/- 3.1 IT WAS OBSERVED BY THE AO THAT BOTH THE ABOVE P ERSONS ARE ASSESSED TO INCOME TAX IN MUMBAI AND HAVE BANK ACCOUNT IN THEIR NAMES. DESPITE THIS, THE ASSESSEE HAS ACCEPTED CASH LOANS OF THE ABOVE AMOUNT FROM THESE TWO PERSONS. IT WAS ALSO OBSERVED THAT THE ASSESSEE HAS IN ADDITION TO CASH LOANS, A CCEPTED LOANS THROUGH CHEQUE FROM THE SAME TWO PERSONS DURING THE YEAR. BEFORE THE AO THE ASSESSEE CLAIMED THAT THE LOAN CREDITORS ARE IMMEDIATE RELATIVES OF THE DIRECTORS OR MAJOR SHAREHOLDERS OF THE COMPANY. FURTHER, THE ASSESSEE ALSO CITED CERTAI N ITAT DECISIONS ON SIMILAR ISSUE. THE ASSESSEE FURTHER CLAIMED THAT THE LOAN WAS TAKE N TO MEET URGENT BUSINESS REQUIREMENTS. 3.2 HOWEVER, THE AO DID NOT CONVINCE WITH THE ASSE SSEES CONTENTIONS AND HELD THAT THE PROVISIONS OF SECTION 269SS ARE CLEAR THAT NO P ERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHER THAN BY AN A /C PAYEE CHEQUE OR A/C PAYEE BANK DRAFT BY CLAUSES(A),(B) AND ( C) IS RS. 20,000/- OR MORE. THE SECTION FURTHER MENTIONS CERTAIN EXCEPTIONS VIDE TWO PROVISOS IN THE SECTIO N ITSELF. IT WAS OBSERVED BY THE AO THAT THE ASSESSEES CASE WAS NOT COVERED BY ANY OF THE EXCEPTIONS MENTIONED IN SECTION 269SS. IN VIEW OF THE ABOVE, PENALTY U/S. 271D WAS IMPOSED. 4. VIDE THE IMPUGNED ORDER THE LD.CIT(A) HAS DELETE D THE PENALTY, AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE CONSIDERED THE FACTS NARRATED BY ADDL. CIT, RANGE-4, KOLKATA AND SUBMISSION MADE BY THE APPELLANT DURING APPELLATE PROCEEDINGS. THE AO HAS IMPOSED PENALTY U/S. 271D ON THE GROUND THAT LOAN WAS TAKEN IN CASH. AO HAS CONSIDERED THE APPELLANTS SUBMISSION AND COME TO CONCLUSION THAT PROVISION OF SECTION 269SS IS ATTRACTED AND THEREFORE, THE PENALTY U/S. 271D IS L EVIED. FOR THIS, AO HAS STATED THAT PROVISION OF SECTION 269SS IS CLEAR THAT NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHER THAN BY AN ACCOUNT PAYEE CHEQUE OF ACCOUNT PAYEE BANK DRAFT BY CLAUSE (A),(B) AND (C ) IS RS.20,000/- OR MORE. IN SHORT ACCORDING TO AO, THE PENALTY UNDER SECTION 271D IS LEVIABLE IN CASE OF LOAN TAKE N OR DEPOSITED OTHER WISE THEN PAYEES ACCOUNTS CHEQUE OR DRAFT. ON THE OTHER HAND APPELLANT HAS SUBMITTED THAT PROVISION OF SECTION 2 69SS IS NOT ATTRACTED IN THIS CASE IN VIEW OF VARIOUS CASE LAWS RELIED UP ON. WHETHER THE PENALTY IS LEVIABLE OR NOT DEPEND UPON THE CIRCUMST ANCES UNDER WHICH ITA NO.2269/KOL/2010-B-AM 3 THE CONTRAVENTION OF PARTICULAR SECTION IS MADE. S ECONDLY, THE INTENTION BEHIND THE LEGISLATION HAS TO BE CONSIDERED, WHI LE DECIDING THE ISSUE. SO FAR AS SECTION 269SS IS CONCERN, IT WAS INTRODUC E WITH INTENTION TO COPE UP UNEXPLAINED MONEY INTRODUCE IN THE GUISE OF LOAN OR ADVANCES BY AVOIDING BANKING CHANNELS TO AVOID TAX. THE APPE LLANT HAS SUBMITTED ASSESSMENT ORDER DATED 30.12.2009 PASSED BY AT, CIR CLE-4, KOLKATA WHERE THE LOAN TRANSACTION AS REFERRED ABOVE, IS TR EATED AS GENUINE LOAN TRANSACTION AND THEREFORE, NO ADDITION IS MADE. FU RTHER AS THE TRANSACTIONS ARE MADE BY SHARE HOLDERS OF THE COMPA NY AND ADVANCED BY RAKHI KOTHARI AND VIKASH KOTHARI WHO ARE ALSO RE LATIVES OF DIRECTORS OF THE COMPANY. THE APPELLANT HAS ALSO PO INTED OUT THAT THIS AMOUNT WAS TAKEN TO MEET URGENT BUSINESS REQUIREMEN T AND ARE DULY CONFIRMED BY RESPECTIVE PARTIES. BOTH THE PARTIES ARE ASSESSED TO INCOME TAX AND AMOUNT ADVANCED IS REFLECTED IN THEI R STATEMENT OF ACCOUNT FOR THE YEAR ENDED ON 31 ST MARCH 2006. AS ABOVE NARRATED FACT CLEARLY INDICATE, THAT THERE WAS NO INTENTION TO EVADE TAX AND TRANSACTIONS ARE GENUINE, THE PENALTY U/S.271D IS N OT LEVIABLE. IN VIEW OF FACTS NARRATED ABOVE AND ALSO CASE RELIED UPON B Y APPELLANT OF VARIOUS TRIBUNAL AND HIGH COURT PARTICULARLY, MADRA S HIGH COURT IN CASE OF CIT VS. LAKSHMI TRUST CO. AS THE TRANSACTIO N IS TREATED AS GENUINE DURING ASSESSMENT PROCEEDINGS, PENALTY LEVI ED AT RS.16,35,000/- IS DIRECTED TO BE DELETED. 5 AGAINST THE ABOVE ORDER OF THE LD.CIT(A), THE REV ENUE IS IN FURTHER APPEAL BEFORE US 6. SHRI NIRANJAN SATPATI, LD.SR.DR APPEARED ON BEHA LF OF THE REVENUE AND CONTENDED THAT ASSESSEE HAS ACCEPTED LOAN IN CASH, WHICH IS IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE I.T ACT 1961, THEREFORE, THE A O WAS JUSTIFIED IN IMPOSING PENALTY U/S. 271D OF THE I.T ACT 1961. 7. ON THE OTHER HAND, SHRI S.M SURANA, ADVOCATE, TH E LD.AR APPEARED ON BEHALF OF THE ASSESSEE AND CONTENDED THAT THE LOAN WAS TAKEN FROM SHAREHOLDERS OF THE ASSESSEE COMPANY, WHO WERE CLOSE RELATIVES OF THE DIRECTOR O F THE COMPANY. GENUINENESS OF LOAN WAS NOT DOUBTED AND NO ADDITION WAS MADE BY THE AO WHILE FRAMING THE ASSESSMENT U/S. 143(3) OF THE ACT. HE FURTHER CONTENDED THAT AMOUNT WAS NEEDED TO MEET URGENT BUSINESS REQUIREMENTS OF THE ASSESSEE COMPANY. HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF SHRI MADHU GHO SH VS. JCIT IN ITA NO. 271/KOL/2009 FOR THE A.Y 2003-04, THE ORDER DATED 2 8-10-2011, WHEREIN UNDER SIMILAR ITA NO.2269/KOL/2010-B-AM 4 FACTS AND CIRCUMSTANCES THE TRIBUNAL FOUND THAT TH E AO WAS NOT JUSTIFIED IN LEVYING PENALTY U/S. 271D. RELIANCE WAS ALSO PLACED ON TH E DECISION OF ITAT INDORE BENCH IN THE CASE OF RAJESH SHRIVASTAVA VS. ADDL. CIT IN ITA NO.42/IND/2012 A.Y 2001-02, THE ORDER DATED 19-04-2012, WHEREIN IT WAS HELD THAT W HEN TRANSACTION WAS FOUND TO BE GENUINE NO PENALTY IS LEVIABLE AND ESPECIALLY WHEN THE TRANSACTION IS BETWEEN THE CLOSE RELATIVES. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED BY THE LD.AR OF THE ASSESSEE, WITH REFERENCE TO FACTUA L MATRIX OF THE INSTANT CASE. FROM THE RECORD, WE FIND THAT LOANS WERE ADVANCED BY THE SHA REHOLDERS OF THE COMPANY, WHO ARE CLOSE RELATIVES OF THE DIRECTORS OF THE ASSESSEE CO MPANY. WHILE FRAMING THE SCRUTINY ASSESSMENT ORDER OF ASSESSEE COMPANY DATED 30-12-20 09, THE AO HAS NOT DOUBTED THE LOAN TRANSACTION AND TREATED THE SAME AS GENUINE. THEREFORE, NO ADDITION WAS MADE. WE ALSO FOUND THAT LOAN WAS TAKEN BY THE ASSESSEE C OMPANY TO MEET THE URGENT BUSINESS REQUIREMENTS AND THE SAME WEE DULY CONFIRMED BY THE RESPECTIVE PARTIES. BOTH THE PARTIES ARE ALSO ASSESSED TO INCOME-TAX AND THEY HA VE DULY REFLECTED THE AMOUNT OF LOAN ADVANCED TO THE ASSESSEE COMPANY IN THE STATEMENT O F ACCOUNTS FILED ALONG WITH THEIR RESPECTIVE RETURNS OF INCOME. KEEPING IN VIEW TOTAL ITY OF FACTS AND CIRCUMSTANCES OF THE CASE VIS--VIS THE FINDINGS RECORDED BY THE LD.CIT( A) IN PARA NO.4 OF HIS APPELLATE ORDER, WHICH HAS NOT BEEN CONTROVERTED BY THE LD.DR BY BR INGING ANY POSITIVE MATERIAL ON RECORD, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A) RESULTING IN DELETION OF PENALTY OF RS.16.35 LAKH I MPOSED U/S. 271D OF THE ACT. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 03-12 -2013 SD/- SD/- ( #$ '# , ) ( MAHAVIR SINGH, JUDICIAL MEMBER) ( . , ) ( R.C. SHARMA, ACCOUNTANT MEMBER ( (( ( 0 0 0 0 ) )) ) DATE 03-12-2013 ITA NO.2269/KOL/2010-B-AM 5 ** PRADIP SPS / *3 4325 / COPY OF THE ORDER FORWARDED TO: 1. . () / THE APPELLANT : DCIT, CIRCLE-4, P-7 CHOWRINGHEE SQ, 8 TH FL., KOL- 69. 2 *+() / THE RESPONDENT- M/S. TRIDEL BUILDERS & TRADERS PVT. LTD 18 MANGOE LANE, KOL-1. 3 4. . ' / THE CIT, ' ( )/ THE CIT(A) 5 . !67 *' / DR, KOLKATA BENCH 6 . GUARD FILE . +3 */ TRUE COPY, '-/ BY ORDER, # '8 /ASSTT REGISTRAR