Rajesh Agarwal HUF, Ghaziabad V. ITO, Ghaziabad

ITA 2592/DEL/2011

• Counselvise Citation: 259220114 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AKILESH KUMAR
• Keywords: Reasonable cause; Right to appeal
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.2592/DEL/2011 ASSESSMENT YEAR : 2005-06 RAJESH AGARWAL (HUF), ITO, C/O AKILESH KUMAR ADVOCATE, WARD-2 (2), CHAMBER NO.206-207, RANGE-2, GHAZIABAD. ANSAL SATYAM, RDC RAJ NAGAR, GHAZIABAD. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAGHR AAGHR AAGHR AAGHR- -- -8866 8866 8866 8866- -- -K KK K APPELLANT BY : SHRI AKILESH KUMAR, ADVOCATE. RESPONDENT BY : MS. MEENAKSHI VOHRA, SR. DR. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE O RDER OF LD CIT(A) DATED 8.3.2011. THE GROUNDS OF APPEALS TAKEN BY THE ASSESSEE ARE AS UNDER:- 1. THAT THE LD CIT(A) ERRED IN HOLDING THAT PASSING/SERVI NG SINGLE ORDER/DEMAND NOTICE UNDER TWO DIFFERENT PROVISIONS OF THE ACT IS VALID, AS THE SAME IS AGAINST THE SCHEME OF THE ACT. 2. THAT ON MERITS, THE LD CIT(A) ERRED IN NOT APPRECIAT ING THE FACT THAT TRANSACTION WAS NOT COVERED U/S 269T/271E OF THE ACT AND BESIDE THERE WAS NO EVASION OF TAX, TRANSACTIONS FOUND G ENUINE WHICH ARE CARRIED OUT IN THE SPECIFIC CIRCUMSTANCES OF THE CASE WITHOUT ANY MALAFIDE INTENTION. ITA NO2592/DEL/2011 2 3. THAT THE LD CIT(A) ALSO ERRED IN NOT APPRECIATING TH E FACT THAT EVEN THOUGH THE ASSESSING OFFICER MISTAKENLY PRESUMED THA T ASSESSEE HAS DECLARED PENDING ADVANCE FROM CUSTOMER AS LOA N AND RECORDED THAT IF IT IS LOAN ACCOUNT THAN ASSESSEE HA S AGAIN CONTRAVENTED THE PROVISIONS OF SECTION 269SS/T. 4. THAT THE LD CIT(A) ERRED IN NOT CONSIDERING THE ALTE RNATIVE PRAYER OF ASSESSEE THAT THAT THERE WAS REASONABLE CAUSE FOR MAKI NG REPAYMENT IN CASH AND AS SUCH UPHOLDING OF PENALTY I S AGAINST THE TRUE SPIRIT OF THE PENAL PROVISION OF SECTION 271 E READ WITH SECTION 273B. IN THE AFORESAID CIRCUMSTANCES ORDER OF THE LD CIT(A) UPHOLDING THE PENALTY U/S 271E `.12,63,405/- IS WHOLLY ILLEGAL BESIDES BEING AGAINST THE SETTLED LAW AND MATERIAL ON THE RECORD, HENCE REQUESTED TO BE CASHED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS E NGAGED IN THE BUSINESS OF ACQUIRING AND SELLING OF ASSETS OF OLD FAC TORY BUILDING & PLANT & MACHINERY. DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE ENTERED INTO ONE TRANSACTION FOR PURCHASE OF ASSETS OF A COMPANY AND BID WAS GIVEN TO PICK UP UNDER THE NAME OF S.R. INDU STRIES WITH DIFFERENT COMPOSITION BUT ULTIMATELY ASSESSEE TOOK THIS BID IN THE INDIVIDUAL CAPACITY. TO PART FINANCE THE DEAL THE A SSESSEE TOOK LOANS FROM HIS TWO SISTER CONCERNS NAMELY M/S PREMSONS FORGINGS P VT. LTD. AND M/S HINDON FORGINGS PVT. LTD. THE PREMSONS FORGINGS PVT. LTD. DIRECTLY MADE PAYMENTS OF `.1,96,30,000/- TO PICK UP AND THEREFORE ASSESSEE CREDITED THE SUM SO PAID BY HIS SISTER CONCERN IN H IS BOKS OF ACCOUNTS. THE OTHER PARTY M/S HINDON FORGINGS PVT. LTD DIRECTLY MADE PAYMENTS OF `.30.25 LAKHS TO ASSESSEE THROUGH ACCOUNT PAY EE CHEQUES. DURING THE YEAR, THE ASSESSEE REPAID THE AMOUNT BELONGING TO M/S PREMSONS FORGINGS PVT. LTD. AS UNDER:- ITA NO2592/DEL/2011 3 THROUGH CHEQUE `.89,00,000/- THROUGH CASH `.10,80,000/- THROUGH SALE BILLS. `.46,93,190/- ---------------------------- `.1,46,73,190/- BALANCE OUTSTANDING AS ON 31.3.2005 `. 49,56,810/- ----------------------------- TOTAL `.1,96,30,000/- ------------------------------ THE REPAYMENTS TO OTHER PARTY M/S HINDON FORGINGS (P) LTD. WAS ALSO MADE PARTLY THROUGH CHEQUES AND PARTLY THROUGH CASH & SALES. THE ASSESSING OFFICER HELD THAT THE CASH PAYMENTS WERE MA DE IN CONTRAVENTION OF PROVISIONS OF SECTION 269T OF THE ACT AND THEREFORE ACCORDINGLY IMPOSED PENALTY EQUIVALENT TO AMOUNT OF REPAYMENTS. THE ASSESSING OFFICER ALSO HELD THAT LOANS WERE ACCEPTED OTH ERWISE BY CHEQUES OR BANK DRAFT THEREFORE FURTHER IMPOSED PENAL TY FOR VIOLATION OF PROVISIONS OF SECTION 269SS. 3. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPEAL B EFORE LD CIT(A) AND LD CIT(A) AFTER GOING THROUGH THE DETAIL ED SUBMISSIONS OF ASSESSEE DELETED THE PENALTY U/S 271D FOR VIOLATION OF S ECTION 269SS WHEREAS UPHELD THE PENALTY U/S 271E OF THE ACT FOR VI OLATION NOF PROVISIONS OF SECTION 269T. THE LD CIT(A) WHILE UPHOLD ING THE PENALTY U/S 271E MADE THE FOLLOWING OBSERVATIONS:- 5.2.2. 271E HOWEVER, THE SITUATION IN RESPECT OF PENALTY U/S 271E IS EQUALLY SIMPLE AND CONCLUSION IS EQUALLY STRAIGHT FORWARD AGAI NST THE APPELLANT. ITA NO2592/DEL/2011 4 5.2..2..1. FIRST OF ALL, IT IS CRYSTAL CLEAR THAT THE CASH REPAYMENTS OF `.10,80,000/- TO M/S PREMSONS FORGING (P) LTD. AND `.1,83,405/- TO M/S HINDON FORGE (P) LTD. ARE REPAYMENTS TOWARDS RE CEIPTS OF `. 1,96,30,000/- FROM MIS PREMSONS FORGE (P) LTD. AND `. 30,25,000/- FROM M/S HINDON FORGE (P) LTD. WHICH REC EIPTS ARE CLEARLY IN THE NATURE OF DEPOSITS. THAT IS SO CLEAR FRO M THE PERUSAL OF COPIES OF ACCOUNTS. IN FACT, IN RESPECT OF PREMSONS FORGING (P) LTD. APPELLANT'S OWN VERSION, BOTH IN BASIC ASSESSMENT PROCEEDINGS AND ALSO IN PENALTY' PROCEEDINGS, IS THAT FUND TO PIC- UP WAS PAID BY M/S PREMSONS, TO THE TUNE OF `. 1,90,00, 000/- (61,25,000+40,00,000/-+88,75,000/-), BEHALF OF ASSESSEE , FOR AGREEMENT TO PURCHASE AN OLD UNIT. SUCH FUNDING, TO HELP THE .ASSESSEE IN ITS REQUIREMENT FOR FUND, IS UNAMBIGUOUSLY I N THE NATURE OF 'LOAN' OR 'DEPOSIT'; THE EXACT NATURE IS KN OWN TO ASSESEE. BUT, EITHER IT IS LOAN OR DEPOSIT' THE IMPACT F OR PURPOSE OF JUDGING THE CASH REPAYMENTS, FROM THE VIEW POINT O F PENALTY U/S 271E, WOULD BE SAME. 5.2.2.2 SECONDLY, THE APPELLANT'S STRENUOUS EFFORTS TO CHARACTE RIZE THESE RECEIPTS AS 'ADVANCES' ON THE GROUND THAT THESE ARE LIN KED TO SALES EFFECTED LATER TO THESE PARTIES; IS OF NO CONSEQUE NCE; IT DOES NOT HELP THE ASSESSEE EVEN A LITTLE BIT, AS WE SHALL SEE IN A SHORT WHILE. 5.2.2.3 BUT, FIRST POINT IS THAT CERTAINLY THESE HUGE INFLOWS, MUCH BEFORE SALES WERE EFFECTED, ARE NOT LINKED TO SALES. THIS IS NO LINKAGE- NEITHER TIME-WISE NOR AMOUNT-WISE. MUCH LESSER AMOUNT O F SALES HAVE BEEN EFFECTED, AND, THAT TOO, MUCH LATER!! ON MY DIRECTION, THE APPELLANT FURNISHED COPIES OF A/ CS OF PREMSONS FORGING (P) LTD AND HINDON FORGE (P) LTD. IN HIS BOOKS. NOW, FROM THE PERUSAL OF THESE, ANY ONE CAN VERY WELL OBSERVE ITA NO2592/DEL/2011 5 THAT IN BOTH THE CASES, ASSESEE HAS FIRST RECEIVED THE FUN D THEN HAS PAID BACK A PART OF IT IN CASH; MAJOR PART BY CHE QUE AND ONLY THEREAFTER HAS EFFECTED SOME SALES. THE HUGE FUNDS RECE IVED IN THE BEGINNING ARE CLEARLY FOR DEPOSITS IN PIC-UP OR OTHER SUCH SPECIFIC PURPOSE, AND CAN NOT BE, IN AY WAY, LINKED T O SALES, EFFECTED MUCH LATER. MORE IMPORTANTLY, CASH REPAYMEN TS HAVE BEEN MADE OUT OF SUCH HUGE DEPOSITS TAKEN. IF THE APPE LLANT ARGUES THAT THESE FUNDS RECEIVED FROM M/S PREMSONS AND M/ S HINDON, WERE NOT IN THE NATURE OF LOAN; THEN ONLY O THER ALTERNATIVE IS THAT 'THESE WERE 'DEPOSITS' MADE. THE N ATURE OF THIS TRANSACTION, CAN BE DEDUCED FROM THE SEQUENCE OF TRAN SACTIONS; THE VERSION OF ASSESSEE CANNOT BE RELIED UPON SIMPLY BEC AUSE ALL THESE ENTITIES ARE CONTROLLED BY ASSESSEE ONLY. THE AGREEMENT, PLACED IN THIS RESPECT, BETWEEN ASSESSEE A ND PREMSONS FORGING HAS NO AUTHENTICITY. ASSESSEE IS DIRECTOR IN BOTH M/S PREMSONS FORGING (P) LTD. AND IN M/S HINDON F ORGE (P) LTD. SUCH UNREGISTERED AGREEMENT CAN BE CREATED ANY T IME, AND IT IS A SELF-SERVING INSTRUMENT. IN ANY CASE, IT DOES NOT HELP THE ASSESSEE SIGNIFICANTLY, BECAUSE NATURE AND .SEQUENCE OF TRANSACTION CAN BETTER BE 'OBSERVED' FROM FACTS RATHER THAN 'STATED' BY SUCH MUTUALLY CONVENIENT AGREEMENT. 5.2.2.4. THE MOST CRUCIAL AND CLINCHING ASPECT IS THA T EVEN IF THESE WERE 'ADVANCES'; THESE WOULD FALL IN THE NATURE OF 'TRADE DEPOSITS' AND, HENCE 'DEPOSITS'. THUS, EVEN BY HIS OWN EXPLANATION, APPELLANT DOES NOT GO OUTSIDE THE PURVIE W OF SECTION 269T/271E. 5.2.2.5 THERE ARE SO MANY COURT CASES APPLICABLE TO FACTS OF PR ESENT CASE, SUPPORTING LEVY OF PENALTY U/S 271E BUT I WOULD CONCENTRATE ON CASE LAW OF CHAUBEY OVERSEAS CORPORATION V. CIT (20 08) 303 ITA NO2592/DEL/2011 6 ITR 9 (ALLD.) OF THE JURISDICTIONAL HIGH COURT, WHOSE RATIO IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET THE LD AR SUBMITTED THAT ASSESSING OFFIC ER HAD PASSED A COMPOSITE ORDER FOR VIOLATION OF PROVISIONS OF SECTION 269SS AND SECTION 269T AND HAD IMPOSED PENALTY U/S 271D & 27 1E BY A COMMON ORDER WHICH IS NOT TENABLE IN LAW AS THERE HA S TO BE A SEPARATE ORDER FOR EACH PENALTY AS FOR FILING APPEAL BEFORE LD CIT(A) SEPARATE DEMAND NOTICES ARE TO BE ISSUED AND IT IS MAND ATORY ON THE PART OF ASSESSEE TO FILE ORIGINAL DEMAND NOTICE AND THE REFORE IN THE ABSENCE OF SEPARATE DEMAND NOTICE THE ASSESSEE IS DEPRIVE D RIGHT OF APPEAL. OUR SPECIFIC ATTENTION WAS INVITED TO SECTION 246A. IT WAS FURTHER SUBMITTED THAT THE ORDER OF ASSESSING OFFICER W AS ILLEGAL AND VOID AB INITO AND IT IS NOT AN APPEAL ABLE ORDER WHI CH IS AGAINST THE LAW. 6. ARGUING ON MERITS OF THE CASE IT WAS SUBMITTED THAT ASSESSEE IN THE CAPACITY OF HUF AND IN PARTNERSHIP WITH OTHER P ERSONS HAD ACQUIRED A FACTORY. HOWEVER, AT THE TIME OF MAKING PAYMENTS T HE OTHER PARTNERS DID NOT PARTICIPATE SO THE ASSESSEE HAD TO MAKE PAYMENT S WHICH WERE MADE BY HIS SISTER CONCERN DIRECTLY TO THE VENDOR. IT WAS FURTHER SUBMITTED THAT A PART OF REPAYMENT OF SUCH LOAN WAS M ADE IN CASH AND PART OF AMOUNT WAS ADJUSTED AGAINST SALES AND MAJORITY OF LOANS WERE REPAID THROUGH CHEQUES. HE FURTHER ARGUED THAT THE A MOUNT RECEIVED WAS NOT UNSECURED LOANS AS THESE WERE CLASSIFIED AS ADVANCE FROM CUSTOMERS AND OUR ATTENTION WAS INVITED TO PAPER BOOK PAGE 17 WHERE A COPY OF BALANCE SHEET WAS PLACE. IT WAS FURTHER SUBMI TTED THAT THE ASSESSING OFFICER HAS RECORDED A WRONG FINDING REGARDING THE QUANTUM OF SALES AND OUR ATTENTION WAS INVITED TO PAPER BOOK P AGES 38 TO 53 WHERE COPIES OF SALE BILLS WAS PLACED. IT WAS SUBMITTED THAT A SIGNIFICANT AMOUNT OF SALES WERE MADE AGAINST THE ADVAN CES RECEIVED. IT WAS FURTHER SUBMITTED THAT MAJORITY OF THE REPAYME NTS WERE MADE ITA NO2592/DEL/2011 7 THROUGH CHEQUES AND A SMALL PART OF ADVANCES WERE REPA ID AFTER ADJUSTING AMOUNT OF SALES. IT WAS FURTHER SUBMITTED THAT THE PERSONS TO WHOM REPAYMENTS WERE MADE IN CASH, THEIR ASSESSMENTS HA S BEEN ACCEPTED U/S 143(3) OF THE ACT AND THEIR GENUINENESS O F TRANSACTION WAS ESTABLISHED AND IT WAS NOT A CASE OF EVASION OF TAX. COMMENTING UPON THE FINDINGS OF LD CIT(A) AS CONTAINED IN PARA 5 .2..2. TO 5..2.5. THE LD AR SUBMITTED THAT THE FINDING OF LD CIT(A) ARE NO T CORRECT AS ADVANCES ARE ALWAYS RECEIVED BEFORE EXECUTING THE SALE . IN RESPECT OF REPAYMENTS TO SECOND PARTY, THE LD AR SUBMITTED THAT THE FACTS ARE SAME IN OTHER CASE ALSO. IN VIEW OF THE ABOVE CIRCUMSTA NCES IT WAS SUBMITTED THAT GENUINENESS OF TRANSACTION WAS NOT IN DOU BT AND IT WAS SUBMITTED THAT ADVANCES WERE RECEIVED TOWARDS FUTURE SA LES AND THEREFORE WERE NOT COVERED FOR CONSIDERING VIOLATION OF SECTION 269T OF THE ACT. RELIANCE IN THIS RESPECT WAS PLACED ON THE F OLLOWING CASE LAWS:- 1. CIT V. KAILASH CHAND DEEPAK KUMAR 317 ITR 351 (ALLD. ) 2. CIT V. RUGMINI RAM RAGHAV SPIUNNERS (P) LTD. 304 ITR 417(MAD.). 3. CIT V. DHYAM PUBLICATION PVT. LTD. 285 ITR 221. 7. IT WAS FURTHER SUBMITTED THAT THERE WAS AN AGREEMEN T WHICH WAS EXECUTED AT THE TIME OF ACCEPTING LOANS AND IT CONTA INED ONE OF THE TERMS WHICH REQUIRED THAT WHENEVER PAYMENTS WERE REQU IRED BY THE LENDERS THE SAME COULD BE PAID IN CASH ALSO IF THE LEN DERS REQUIRED SO. OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 36 & 37 WHERE A COPY OF MUTUAL AGREEMENT WAS PLACED. 8. FURTHER RELIANCE WAS PLACED ON THE DECISIONNOF COC HIN BENCH IN THE CASE OF MUTHOOT M. GEORGE BANKERS 46 ITD 10 WITH THE PROPOSITION THAT CASH TRANSACTIONS BETWEEN SISTER CONCERNS WERE NOT A FFECTED BY THE SECTION. SIMILARLY, RELIANCE WAS PLACED ON THE CA SE LAW OF CIT V. DHYAM PUBLICATION LTD. 285 ITR 221. FURTHER IT WAS A RGUED THAT IF THERE ITA NO2592/DEL/2011 8 WAS A GENUINE AND BONAFIDE TRANSACTION AND IF ASSESSEE CO ULD NOT GET LOAN OR DEPOSIT THROUGH CHEQUE OR DRAFT AND IF THERE IS NO EVASION OF TAX PENALTY WAS NOT IMPOSABLE AND RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS:- 1. ADIT (INV.) V. KUM A.B. SHANTHI 255 ITR 258. 2. WOODWARD GOVENORS INDIA (P) LTD. V. CIT 253 ITR 7 45 3. CIT V. SUNIL K. GOEL 315 ITR 163 9. ARGUING FURTHER ON REASONABLE CAUSE THE LD AR SUBM ITTED THAT THERE WAS REASONABLE CAUSE IN MAKING PART REPAYMENTS IN CASH AS THE PARTIES REQUIRED IMMEDIATE CASH SO AS TO CLEAR THE CHEQ UES ALREADY ISSUED BY THEM AND IN THIS RESPECT OUR ATTENTION WAS IN VITED TO ADDL. PAPER BOOK PAGE 12 WHERE A CERTIFICATE FROM PREMSONS FORGING PVT. LTD. WAS PLACED. THEREFORE, IT WAS ARGUED THAT THERE WAS REASONABLE CAUSE. RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLO WING JUDGMENTS:- 1. OMEE ENGINEERS V. CIT 294 ITR 599. 2. CIT V. PERMANAND 26 ITR 255. 3. CIT V. TRIUMPH INTERNATIONAL FINANCE PVT.LTD. 345 I TR 270. 10. IN VIEW OF THE ABOVE ARGUMENTS, THE LD AR SUBMITT ED THAT PENALTY WAS NOT IMPOSABLE. 11. THE LD DR, ON THE OTHER HAND, SUBMITTED THAT ASSESSI NG OFFICER IS A QUASI JUDICIAL AUTHORITY AND THEREFORE THERE IS NO ILLEGALITY IN THE COMPOSITE ORDER PASSED FOR IMPOSING PENALTY FOR VIOLATI ON OF PROVISIONS OF SECTION 269SS & 269T OF THE ACT. ARGUING UPON THE MERITS, THE LD DR SUBMITTED THAT DEPOSIT INCLUDE AMOUNTS RECEIVED AS DEPO SITS AGAINST SALES AND SUBMITTED THAT IN FACT THE AMOUNTS WAS RECEIVE D AS UNSECURED LOANS AND EVEN IF THESE ARE CONSIDERED TO BE ADVANCE AGAINST SALES EVEN THEN DEPOSIT INCLUDES AGAINST DEPOSITS AND RELIANCE IN THIS RESPECT WAS PLACED ON THE CASE LAW OF CHOBEY OV ERSEAS CORPORATION V CIT 303 ITR 9. REGARDING MUTUAL AGREE MENT ENTERED INTO ITA NO2592/DEL/2011 9 BETWEEN THE ASSESSEE AND PREMSONS FORGING PVT. LTD. THE LD DR SUBMITTED THAT IT WAS A SELF SERVING DOCUMENT AND HAD N O VALUE. 12. IN HIS REJOINDER, THE LD AR SUBMITTED THAT THERE WAS NO AGREEMENT WITH THE SECOND PARTY AND HAD IT BEEN A SEL F SERVING DOCUMENT, THE ASSESSEE COULD HAVE DRAFTED SUCH AGREEMENT WITH THE OTHER PARTY ALSO. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE FIRST CONTENTION OF LD AR THAT SINCE IT WAS A COMPOSITE ORD ER AND THEREFORE VOID AB INITO IS NOT TENABLE IN VIEW OF THE FACT THA T NO GRIEVANCE IS CAUSED TO THE ASSESSEE AS THE APPEAL FILED BY THE ASSESSEE HA S BEEN DECIDED ON MERITS AND LD CIT(A) HAS NOT REJECTED THE APPEAL OF ASSESSEE HOLDING THAT THE ORDER WAS NOT APPEALABLE. THE REFORE. GROUND NO.1 IS DISMISSED. 14. REGARDING MERITS OF THE CASE AS CONTAINED IN GROUN D NO.2 & 3 WE FIND THAT ASSESSEE HAS ARGUED THAT THERE WAS NO TAX EVASI ON AND TRANSACTIONS WERE FOUND TO BE GENUINE AND THERE WAS NO MALA FIDE INTENTION AND THEREFORE RELYING UPON VARIOUS JUDGMEN TS ARGUED THAT PENALTY WAS NOT IMPOSABLE. HOWEVER, FROM THE EXAMINAT ION OF COPY OF ACCOUNTS PLACED AT PAPER BOOK PAGE 38, WE FIND THAT THE AMOUNT OF `.1,96,30,000/- WAS RECEIVED BY THE ASSESSEE FROM M/S PRE MSONS FORGING PVT. LTD. AND THIS ADVANCE WAS RECEIVED FOR M AKING INVESTMENT IN THE BUSINESS OF ASSESSEE. AGAINST THIS ADVANCE THE ASSESSEE R EPAID AN AMOUNT OF `.89 LAKHS THROUGH CHEQUES AND FURTHER R EPAID `.10,80,000/- THROUGH CASH AND ALSO ADJUSTED `.46,93,1 90/- AGAINST SALE OF GOODS. THE PAYMENTS IN CASH HAS BEEN MADE STARTING F ROM NOVEMBER IST TO NOVEMBER 25 TH AND DURING THIS PERIOD THE ASSESSEE HAS RECEIVED AN AMOUNT OF `.88,75,000/- ON NOVEMBER 4 TH AND `. 6,30,000/- ON NOVEMBER 6 TH THROUGH TRANSFER ENTRIES FROM THE SAME PARTY SO ON THE ONE HAND THE ASSESSEE HAD RECEIVED PAYME NTS THROUGH ITA NO2592/DEL/2011 10 TRANSFER /JOURNAL ENTRIES AND IN THE SAME PERIOD THE A SSESSEE HAD MADE REPAYMENTS IN CASH. THESE FACTS ARE APPARENT FROM PAP ER BOOK PAGE 4 & 5 OF ADDITIONAL PAPER BOOK FILED BY THE ASSESSEE. TH EREFORE, THERE CANNOT BE JUSTIFICATION IN MAKING REPAYMENTS IN CASH W HEN AT THE SAME TIME THE ASSESSEE HAD RECEIVED PAYMENTS THROUGH TRANSFER ENTRIES FROM THE SAME PARTY. THE ARGUMENT OF THE LD AR THAT CASH WAS PAID AFTER MAKING ADJUSTMENT OF SALES MADE TO ASSESSEE IS ALSO NO T CORRECT AS THE SALES WERE MADE AT THE CLOSING OF MONTH OF DECEM BER WHEREAS THE CASH PAYMENTS WERE MADE IN THE MONTH OF NOVEMBER . REGARDING REASONABLE CAUSE, THE LD AR HAD ARGUED THAT THE AMOUN T WAS REQUIRED TO BE DEPOSITED IN THE BANK ACCOUNT OF PREMSONS FORGIN G PVT. LTD. TO AVOID DISHONOR OF CHEQUES IS ALSO NOT CORRECT AS THE AM OUNTS WERE REPAID IN GHAZIABAD WHEREAS THE BANK ACCOUNT OF PREM SONS FORGINGS PVT. LTD. IS IN KANPUR. WE FIND CASH PAYMENTS WERE MA DE AS DETAILED BELOW:- DATE MONTH AMOUNT IST NOVEMBER `.60,000/- 2 ND NOVEMBER `.40,000/- 3 RD NOVEMBER `.60,000/- 4 TH NOVEMBER `.20,000/- 5 TH NOVEMBER. `.20,000/- 7 TH NOVEMBER `.20,000/- 9 TH NOVEMBER `.20,000/- 10 TH NOVEMBER `.20,000/- 20 TH NOVEMBER `.1,60,000/- 21 ST NOVEMBER `.1,60,000/- 22 ND NOVEMBER `.1,00,000/- 23 RD NOVEMBER `.80,000/- 24 TH NOVEMBER. `.3,20,000/- ITA NO2592/DEL/2011 11 25 TH NOVEMBER `.1,00,000/- `.11,80,000/- OUT OF THE ABOVE PAYMENTS, REPAYMENTS IN CONTRAVENTIO N OF PROVISIONS OF SECTION 269T ARE `.10,80,000/-. ALL THESE PAYMENTS WERE MADE IN GHAZIABAD AS THE ASSESSEE IS BASED IN GHAZIABAD WHEREAS T HE BANK OF THE FIRM M/S PREMSONS FORGING PVT. LTD. IS SITUATED AT KANPUR. IT IS NOT UNDERSTANDABLE AS TO HOW THESE PAYMENTS WERE CARRIED F ROM GHAZIABAD TO KANPUR AND THAT TOO ON MANY DAYS IN TH E MONTH WHEREAS THE FACILITY OF ONLINE DEPOSIT IN THIRD PARTY BANK A CCOUNT WAS ALSO AVAILABLE. THE CONTENTION OF THE LD AR THAT ASSESSEE HA D RECEIVED AMOUNTS AS ADVANCE AGAINST GOODS IS NOT CORRECT AS THE A SSESSEE ORIGINALLY RECEIVED THE LOAN OR DEPOSIT FOR MAKING P URCHASE OF BUSINESS ASSETS. SECONDLY, THE CASH WAS REPAID BEFORE SALES WERE MA DE. THE CLASSIFICATION BY ASSESSEE IN HIS BALANCE SHEET CANNOT ALT ER THE NATURE OF TRANSACTION WHICH NECESSARILY WAS A LOAN OR DEPOSIT A ND EVEN IF THE AMOUNT IS CONSIDERED DEPOSIT THEN DEPOSIT INCLUDES ADVAN CE AGAINST GOODS. THERE WAS NO REASONABLE CAUSE IN MAKING CASH PAY MENTS AS THE REPAYMENTS MADE IN GHAZIABAD HAS BEEN CLAIMED TO HAVE BEEN DEPOSITED IN KANPUR WHICH IS BEYOND HUMAN PROBABILITI ES SPECIFICALLY KEEPING IN VIEW OF THE FACT THAT DURING THE PERIOD OF REPAYMENTS IN CASH THE ASSESSEE RECEIVED FROM SAME PARTY THROUGH JOURN AL ENTRIES HUGE AMOUNTS. THEREFORE, THE ARGUMENT OF LD AR THAT AMOUNTS WERE URGENTLY REQUIRED IS ALSO NOT CORRECT. THEREFORE, ON MERITS AND ON REASONABLE CAUSE THE ASSESSEE DOES NOT HAVE A FORCEFUL CAS E. THE CASE LAWS RELIED UPON BY LD AR ALSO DO NOT HELP THE ASSESSEE A S IN THE CASE LAW RELIED UPON BY THE LD AR, THERE WAS REASONABLE CA USE IN MAKING REPAYMENTS AND COURTS IN THE FACTS AND CIRCUMSTANCES OF THOSE CASES ARRIVED AT THE DECISION AND MOREOVER MOST OF THE CASES ARE FOR VIOLATION OF SECTION 269SS. THE LD CIT(A) HAS ELABOR ATELY DEALT WITH THE ARGUMENTS OF ASSESSEE AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. ITA NO2592/DEL/2011 12 15. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE A SSESSEE IS DISMISSED. 16. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DAY OF FEBRUARY, 2014. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.28.02.2014. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 17.12.2013 DATE OF DICTATION 18.2.2014 DATE OF TYPING 19.2.2014 DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.