Abdul Rehman Khan, Hyderabad V. Addl.CIT, Range-8, Hyderabad

ITA 250/HYD/2014

• Counselvise Citation: 25022514 RSA 2014
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Assessee Lawyers: P BALAKRISHNA
• Keywords: Unexplained cash credit; Initiation of penalty proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 250/HYD/2014 ASSESSMENT YEAR : 2007-08 ABDUL RAHMAN KHAN, HYDERABAD PAN ADIPA 4479Q ADDL. COMMISSIONER OF INCOME- TAX, RANGE 8,HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI P. BALA KRISHNA REVENUE BY SHRI KIRAN KATTA DATE OF HEARING 11-09-2014 DATE OF PRONOUNCEMENT 19-09-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27/01/14 OF THE CIT(A)-III, HYDERABAD CONFIRMING PE NALTY IMPOSED U/S 271D OF THE ACT FOR THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY THE FACTS ARE, ASSESSEE IS AN INDIVIDUAL . DURING THE ASSESSMENT PROCEEDING FOR THE IMPUGNED ASSESSMENT Y EAR, ONE AMONGST THE MANY ISSUES NOTICED BY THE AO WAS, ASS ESSEE HAS SHOWN LOAN OF RS. 20 LAKH FORM ONE SHRI ATEEK HYDER OUT OF WHICH AN AMOUNT OF RS. 13 LAKHS WAS THROUGH CHEQUE AND RS. 7 LAKH WAS IN CASH. WHEN THE AO ASKED THE ASSESSEE TO PROVE GENUI NENESS OF THE SAID LOAN, THOUGH, ASSESSEE SUBMITTED CONFIRMATION LETTER OF THE CREDITOR ALONG WITH BANK ACCOUNT COPY, AO DID NOT A CCEPT THE EXPLANATION OF THE ASSESSEE AND TREATED THE ENTIRE AMOUNT OF RS. 20 2 ITA NO.250/HYD/2014 ABDUL RAHAMAN KHAN LAKH AS UNEXPLAINED CASH CREDIT. CIT(A), HOWEVER, I N APPEAL PREFERRED BY ASSESSEE, DELETED THE ADDITION OF RS. 13 LAKHS O UT OF RS. 20 LAKH WHILE CONFIRMING RS. 7 LAKHS RECEIVED IN CASH. ON F URTHER APPEAL PREFERRED BY ASSESSEE, ITAT ALSO CONFIRMED THE ADDI TION OF RS. 7 LAKHS. IN THE MEANTIME, AO INITIATED PROCEEDING U/S 271D AGAINST ASSESSEE FOR HAVING TAKEN LOAN OF RS. 7 LAKHS IN CA SH IN VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT. THOUGH, ASS ESSEE OBJECTED TO THE INITIATION OF PENALTY PROCEEDINGS, BUT,THE AO P ASSED AN ORDER ON 30/06/2011 IMPOSING PENALTY U/S 271D. CIT(A) ALSO C ONFIRMED PENALTY WHILE DISPOSING OFF ASSESSEES APPEAL BY HOLDING TH AT ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 269SS WHILE OBTAININ G CASH LOAN OF RS. 7 LAKHS. BEING AGGRIEVED BY THE AFORESAID ORDER OF THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 3. LEARNED AR SUBMITTED BEFORE US THAT UNSECURED LO AN OF RS. 7 LAKH HAVING BEEN TREATED AS INCOME OF THE ASSESSEE U/S 68 OF THE ACT, WHICH WAS ALSO CONFIRMED BY ITAT, PENALTY CANNOT BE IMPOSED U/S 271D OF THE ACT BY AGAIN TREATING THE SAID AMOUNT A S LOAN TAKEN BY ASSESSEE IN VIOLATION OF SECTION 269SS. IN SUPPORT OF SUCH, CONTENTION, LEARNED AR RELIED UPON THE FOLLOWING TW O DECISIONS: 1. CIT VS. R.P. SINGH & CO. (P) LTD., 340 ITR 217 (DEL.) 2. CIT VS. SHYAM CORPORATION, [2013] TAX PUB(DT) 1 191 (AHD.) 4. LEARNED DR THOUGH ACCEPTED THE FACT THAT THE AMO UNT HAS BEEN TREATED AS INCOME OF ASSESSEE, BUT, NEVERTHELESS RE LIED UPON THE ORDER OF CIT(A). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. THERE IS NO DISPUTE TO THE FACT THAT SO CALLED UNS ECURED LOAN OF RS. 7 LAKHS TAKEN IN CASH BY ASSESSEE IN ALLEGED VIOLATIO N OF PROVISIONS OF SECTION 269SS FOR WHICH PENALTY HAS BEEN IMPOSED U/ S 271D HAS BEEN TREATED AS INCOME OF ASSESSEE BY AO, WHICH ALS O STANDS 3 ITA NO.250/HYD/2014 ABDUL RAHAMAN KHAN CONFIRMED BY ITAT VIDE ORDER PASSED IN ITA NO. 56/H YD/2011 AND ITA NO. 1446/HYD/2010 DATED 07/12/2012. THEREFORE, WHEN THE AMOUNT OF RS. 7 LAKHS HAS BEEN TREATED AS INCOME OF ASSESSEE IT CANNOT AGAIN BE TREATED AS LOAN AT THE HANDS OF ASSESSEE SO AS T O ATTRACT PROVISIONS OF SECTION 269SS AND CONSEQUENTIALLY PE NALTY PROVISIONS OF SECTION 271D. ONCE, THE AMOUNT IS TREATED AS INC OME OF ASSESSEE, IT GOES OUT OF THE PURVIEW OF THE LOAN, HENCE, THE PROVISIONS OF SECTION 269SS ARE NOT APPLICABLE. THE DECISIONS RELIED UPON BY LEARNED AR FULLY SUPPORT THIS VIEW. ACCORDINGLY, WE FIND NO RE ASON TO SUSTAIN IMPOSITION OF PENALTY U/S 271D AND ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) BY DELETING PENALTY IMPOSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 19/09/2014. SD/- SD/- (P.M. JAGTAP) (SAKT IJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 19 TH SEPTEMBER, 2014 KV COPY TO:- 1) ABDUL REHMAN KHAN, PROP. ARK DAIRY & ARK TRANS PORT, H.NO. 2-4-21/A, HUSSAINI ALAM, HYDERABAD. 2) ADDL. CIT, RANGE 8, HYDERABAD 3) CIT(A)-III, HYDERABAD 4) CIT-II, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD. 4 ITA NO.250/HYD/2014 ABDUL RAHAMAN KHAN DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER