ITO, New Delhi V. M/s. Shitiz Metal Ltd., New Delhi

ITA 240/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58842 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2004-2005
• Appeal Filed On: 16-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOMTA KANCHAN
• Assessee Lawyers: H C SRIVASTAVA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G NEW DELHI BEFORE SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER AND SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO: 240/DEL/2012 A.Y. : 2004-2005 ITO, WARD 8(2) VS. M/S SHITIZ METAL LTD. NEW DELHI D 819, II FLOOR NEW FRIENDS COLONY NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. MOMTA KANCHAN, D.R. RESPONDENT BY : SH. H.C.SRIVASTAVA, C.A. O R D E R PER DIVA SINGH, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DT. 21.10.2011 OF CIT(A)-XI, NEW DELHI PERTAINING TO A. Y. 2004-05 ON THE GROUND THAT THE CIT(A) HAS CANCELLED THE PENALTY IM POSED BY THE JCIT 271D OF THE I.T.ACT. 2. WE HAVE HEARD BOTH THE PARTIES. THE RELEVANT FA CTS ARE THAT SMT.SUSHMA GUPTA ON BEHALF OF THE ASSESSEE COMPANY IN REGARD TO A PURCHASE OF PROPERTY MADE A PAYMENT IN CASH TO THE SELLER AMOUNTING TO RS.1 LAKH AND FURTHER MADE A PAYMENT OF RS.2,55,000 /- IN CASH TOWARDS STAMP DUTY. CONSIDERING THE REPLY OF THE ASSESSEE WHEREIN IT WAS CONTENDED THAT IT WAS NEITHER A LOAN NOR A DEPOSIT, PENALTY ON ACCOUNT OF ITA 240/DEL/2012 PAGE 2 OF 4 M/S SHITIZ METAL LTD. A.Y. 2004-05 THESE TWO REASONS AMOUNTING TO RS.3,55,000/- WAS IM POSED. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY IT WAS CONTEND ED THAT THE COMPANY HAD PURCHASED PROPERTY SITUATED AT D-819, NEW FRIEN DS COLONY, NEW DELHI AND SOLD THE SAME TO SMT. SUSHMA GUPTA, DIRE CTOR AND THE INITIAL PAYMENT OF RS.1 LAKH WAS MADE IN CASH SINCE IT WAS NECESSITATED AS THE PURCHASE INSISTED THAT THE INITIAL PAYMENT HAS TO BE MADE IN CASH. IN REGARD TO THE STAMP DUTY IT WAS STATED THAT SMT.SU SHMA GUPTA AS A DIRECTOR HAS GIVEN INSTRUCTIONS TO THE ASSESSEE TO WITHDRAW RS.2,55,000/- FROM HER LOAN ACCOUNT MAINTAINED WITH THE ASSESSEE IN ORDER TO FULFILL THE REQUIREMENT OF MAKING THE PAYM ENT FOR STAMP DUTY WHICH NECESSARILY HAD TO BE MADE IN CASH. ACCORDIN GLY IT WAS CONTENDED THAT THERE IS NO VIOLATION OF S.269S OF THE ACT AS THE PAYMENT WAS MADE BY RS.1 LAKH TO MRS. SUSHMA GUPTA FOR PURCHASE OF P ROPERTY WHICH WAS DULY SUPPORTED BY THE SALE DEED AND IN REGARD TO RS .2,55,000/- IT WAS PAID IN CASH FOR PAYMENT OF A STAMP DUTY FOR EXECUT ION OF SALE DEED WHICH WAS PAID BY THE COMPANY BY DEBITING THE ACCOU NT OF MRS. SUSHMA GUPTA. IN VIEW OF THE FACT THAT IT WAS A GOVERNMEN T PAYMENT FOR STAMP DUTY IT WAS CONTENDED THAT PAYMENT COULD NOT BE MAD E EITHER BY CHEQUE OR D.D. CONSIDERING THESE FACTS THE CIT(A) QUASHED THE PENAL ACTION HOLDING AS UNDER:- FROM THE PAPERS ON RECORD IT WAS SEEN THAT RS. 1 L AKHS HAS BEEN CREDITED IN THE ACCOUNT OF SMT. SUSHMA GUPTA AND P AYMENT OF RS. 1,00,000/- MADE TO THE SELLER OF THE PROPERTY. THE PAYMENT OF RS.2,55,000/- IS TO THE GOVERNMENT IN RESPECT OF STAMP DUTY PAYMENT FOR PROPERTY. S.269SS IS THEREFORE NOT ATT RACTED IN THE ITA 240/DEL/2012 PAGE 3 OF 4 M/S SHITIZ METAL LTD. A.Y. 2004-05 CASE AS S.269SS TALKS ONLY OF ACCEPTANCE OF LOAN OR DEPOSIT. THE AMOUNT IN THIS CASE REPRESENT PAYMENTS NOT LOANS OR DEPOSITS. S.269SS IS THEREFORE NOT ATTRACTED IN THIS CASE. PE NALTY OF RS.3,55,000/- LEVIED U/S 271D BY THE A.O. IS CANCEL LED. THE LD.D.R. HAS PLACED RELIANCE UPON THE PENALTY OR DER. THE LD.A.R. ON THE OTHER HAND APART FROM RELYING UPON THE IMPUGNE D ORDER INVITED ATTENTION TO PAGE 12 OF THE PAPER BOOK IN SUPPORT O F THE FACT THAT THE PAYMENT OF RS.1 LAKH WAS MADE IN CASH AND DULY RECO RDED IN THE SALE DEED AND WAS THE INITIAL TOKEN PAYMENT NECESSITATED UPON IN ORDER TO FINALISE THE TRANSACTION. THE SAID ASSERTION HAS B EEN MADE BEFORE THE CIT(A) ALSO. THE SAME IS REPRODUCED FOR READY REFE RENCE. BEING AGGRIEVED AGAINST THE SAID ORDER, THE APPEL LANT HAS PREFERRED THE PRESENT APPEAL AND HAS STATED IN HIS REPLY AS UNDER:- * THE APPELLANT HAS PURCHASED THE PROPERTY AT NEW F RIENDS COLONY FROM THE PURCHASER AND SOLD THE SAME TO SMT SG WHO HAPPENS TO BE ONE OF THE DIRECTORS OF THE APPELLANT COMPANY. THE PROPERTY WAS PURCHASED AT RS. 2,40,00,000/- AND THE PROPERTY WAS SOLD, TO SMT. SG AND OTHERS AT RS. 1,20,00,000/ - AS PER SALE DEED. THE APPELLANT RECEIVED FROM SMT. SG, DIRECTO R RS. 1,00,000/- IN CASH. IT WAS NECESSITATED BECAUSE TH E PURCHASER INSISTED TO RECEIVE THE INITIAL PAYMENT IN CASH. * THE STAMP DUTY FOR THE SAID PROPERTY WAS RS. 3,00,0 00/-. THE STAMP DUTY HAS TO BE PAID IN CASH BY SG. SG BEING THE DIRECTOR HAS GIVEN INSTRUCTION TO THE APPELLANT TO WITHDRAW RS. 2,55,000/- FROM HER LOAN ACCOUNT MAINTAINED WITH THE APPELLANT AND BALANCE RS. 45,000/- WAS PAID BY SG IN CASH TOWARDS STAMP D UTY. THIS IS A GOVT. PAYMENT WHERE CASH PAYMENT IS ALLOWED. ALTHOUGH IT IS A LOAN ACCOUNT, THE REVENUE HAS TO SEE THE FACTS OF THE PRESENT CASE. THE PAYMENT WAS MADE TO THE GOVT. ONLY AND T OWARDS THAT ONLY THE CASH WAS WITHDRAWN AND IT SHOULD NOT COME WITHIN THE PURVIEW OF S.269SS. RELIANCE IS PLACED ON ADI VS. KUMARI AB SHANTI (2002) 122 TAXMAN 575 (SC), WHERE THE APEX C OURT HELD IF THERE IS A GENUINE AND BONAFIDE TRANSACTION AND IF FOR ANY REASON THE TAX PAYER CANNOT LOAN OR DEPOSIT BY ACCO UNT PAYEE ITA 240/DEL/2012 PAGE 4 OF 4 M/S SHITIZ METAL LTD. A.Y. 2004-05 CHEQUE OR DEMAND DRAFT FOR SOME REASON, THE AUTHORI TY VESTED WITH THE POWER TO IMPOSE PENALTY HAS GOT DISCRETION ARY POWER. IN THE AFORE MENTIONED PECULIAR FACTS AND CIRCUMST ANCES BEING SATISFIED BY THE REASONING AND FINDING ARRIVED AT IN THE IMPU GNED ORDER, WE ARE OF THE VIEW THAT THE SAID FINDING DESERVES TO BE UPHEL D. ACCORDINGLY THE GROUND OF THE DEPARTMENT IS DISMISSED. 3. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2012. SD/- SD/- (S.V.MEHROTRA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20TH MARCH, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CI T(A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR // C O P Y //