Shri Kamleshkumar D. Dholakiya, Surat V. The CIT(A)-I, Surat

ITA 2757/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94565 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJUMDAR
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA. NO. 2757/AHD/2013 (ASSESSMENT YEAR:2008-09) SHRI KAMLESHKUMAR D. DHOLAKIYA SAINATH SOCIETY, NR. SARDAR COMPLEX, KADODARA, TALUKA PALSANA, SURAT A PPELLANT VS. CIT (APPEALS) I, SURAT RESPONDENT PAN: AIPKD0549B / BY ASSESSEE : NONE / BY REVENUE : SHRI PRADIP KUMAR MAJUMDAR, D.R. /DATE OF HEARING : 15.10.2015 /DATE OF PRONOUNCEMENT : 21.10.2015 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09, ARISES FROM ORDER OF THE CIT(APPEALS)-I, SURAT, DATED 30.1 0.2013 PASSED IN APPEAL NO. CAS-I/493/12-13, IN PROCEEDINGS U/S.2 71E OF THE INCOME TAX ACT, 1961, HEREAFTER THE ACT. ITA NO.2757/AHD/2013 (SHRI KAMLESHKUMAR D. DHOLAKIY A VS. CIT) A.Y. 2008-09 - 2 - 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND RAISED IN THIS APPEAL CHALLENGES THE LOWER APPELLATE ORDER CONFIRMING ASS ESSING OFFICERS ACTION IN LEVYING SECTION 271 E - PENALTY OF RS.37,10,000/-. THE ASSESSEE INDIVIDUAL FILED HIS RETURN OF INCOME ON 09.11.2008 STATING INCOME OF RS.1,09,471/ -. THE ASSESSING OFFICER TOOK UP SCRUTINY AND INTER ALIA T OOK COGNIZANCE ON AIR INFORMATION REVEALING CASH DEPOSITED AMOUNTI NG TO RS.34,91,000/- IN BANK OF BARODA, SURAT. IT APPEAR S FROM ASSESSMENT ORDER DATED 26.11.2010 THAT THIS BANK AC COUNT WAS NOT DISCLOSED IN THE RETURN IN QUESTION. THE ASSES SING OFFICER ISSUED A SHOW CAUSE ASKING FOR SOURCE OF THE ABOVE STATED CASH DEPOSITS. THE ASSESSEE CLARIFIED TO HAVE APPLIED F OR USA VIZA FOR THE PURPOSE OF HIGHER EDUCATION. AND THAT HIS FRIE NDS AND RELATIVES ENGAGED IN AGRICULTURAL ACTIVITIES HAD DE POSITED THE ABOVE STATED SUMS ON VARIOUS DATES. HE FURTHER ENC LOSED AFFIDAVITS OF THE CREDITORS ALONG WITH COPIES OF 7/ 12 FORMS IN SUPPORT OF GENUINENESS PLEA. THE ASSESSING OFFICER FRAMED REGULAR ASSESSMENT ON 26.11.2010 ACCEPTING THE ASSE SSEES EXPLANATION THEREBY ASSESSING THE INCOME ALREADY RE TURNED. HOWEVER, HE INITIATED PENALTY PROCEEDINGS ALLEGING RE-PAYMENTS OF LOANS/DEPOSITS EQUAL TO OR EXCEEDING RS.20,000/- OT HERWISE THEN BY ACCOUNT PAYEE CHEQUE OR BANK DRAFTS IN CONTRAVEN TION OF SECTION 269 OF THE ACT. THE ARRAY OF DEPOSITORS CO MPRISES 25 NAMES. THE GROSS SUM AS STATED IN ASSESSMENT ORDER TURNS OUT TO BE RS.34,91,000/- AS AGAINST THE SAME BEING STAT ED IN PENALTY ORDER DATED 30.11.2012 DEMONSTRATING IT TO BE IMPU GNED SUM OF RS.37,10,000/- IN QUESTION. ITA NO.2757/AHD/2013 (SHRI KAMLESHKUMAR D. DHOLAKIY A VS. CIT) A.Y. 2008-09 - 3 - 3. THE ASSESSEE FILED ITS REPLY 22.08.2012 IN PENAL TY PROCEEDINGS REITERATING THE FACT THAT HE HAD MADE A PPLICATION FOR USA VIZA FOR THE PURPOSE OF HIGHER EDUCATION. THIS MADE HIM TO BORROW THE IMPUGNED SUM FROM HIS FRIENDS AND RELATI VES IN QUESTION IN CASH SINCE THEY HAPPENED TO BE AGRICULT URISTS. HE PLEADED THAT THESE SUMS HAD NOT BEEN USED FOR ANY O THER PURPOSE. ALSO THAT, HIS EXPLANATION IN SCRUTINY (S UPRA) TO THIS EFFECT STOOD ACCEPTED. THE ASSESSEE EXPRESSED IGNO RANCE ABOUT REPAYMENT OF THESE FUNDS THROUGH ACCOUNT PAYEE CHEQ UES ETC. AS PRESCRIBED IN THE ACT. HIS CASE WAS THAT THE CONCE RNED PARTIES HAD FILED THEIR RESPECTIVE AFFIDAVITS CONFIRMING RE CEIPTS AND PAYMENTS TRANSACTIONS SO AS TO PROVE GENUINENESS. WE NOTICE FROM THE PENALTY ORDER THAT THE ASSESSEE HAD CONTRA VENED SECTION 269T OF THE ACT AND THERE WAS NO JUSTIFIABLE REASON S FORTHCOMING. HE QUOTED PURPOSE OF SECTION 269 TO DISCOURAGE REPA YMENTS OF LOANS / DEPOSITS EXCEEDING RS.20,000/- IN CASH AND IMPOSED THE IMPUGNED PENALTY OF RS.37,10,000/- U/S. 271E OF THE ACT. 4. THE CIT(A) CONFIRMS THE ASSESSING OFFICERS ACTI ON. 5. WE HAVE HEARD THE REVENUE AND GONE THROUGH THE C ASE FILE. CASE CALLED TWICE. NONE APPEARED AT THE ASSESSEES BEHEST. HE IS PROCEEDED AGAINST EX PARTE. IT HAS COME ON RECORD THAT ASSESSEES EXPLANATION JUSTIFYING THE IMPUGNED CASH DEPOSITS IN HIS BANK ACCOUNT AFTER BORROWING THE SAME FROM HIS FRIENDS/RELATIVES ENGAGED IN AGRICULTURAL OCCUPATIO N STANDS ACCEPTED IN ASSESSMENT ORDER ITSELF. WE PUT UP A Q UERY TO THE REVENUE ON 14.10.2015 AS TO WHETHER ANY PENAL ACTIO N WAS EVER INITIATED U/S.271D OF THE ACT AGAINST THE ASSESSEE. THE REPLY ITA NO.2757/AHD/2013 (SHRI KAMLESHKUMAR D. DHOLAKIY A VS. CIT) A.Y. 2008-09 - 4 - RECEIVED TODAY IS IN NEGATIVE. IT MEANS THAT THE L D. ASSESSING OFFICER VERY MUCH AGREED WITH ASSESSEES EXPLANATIO N JUSTIFYING HIS ACTION OF BORROWING THE IMPUGNED LOANS IN CASH EXCEEDING SUMS OF RS.20,000/- THAN BY THE PRESCRIBED METHOD O F ACCOUNT PAYEE CHEQUE ETC. THAT BEING THE CASE, WE ARE OF T HE OPINION THAT THE CIRCUMSTANCES WHICH EXISTED AT THE TIME OF AVAI LING THE IMPUGNED LOANS IN THE RELEVANT PREVIOUS YEAR CONTIN UE AT THE TIME OF REPAYMENT THEREOF AS WELL BEING MADE IN THE VERY ASSESSMENT YEAR. WE ACCORDINGLY HOLD THAT THE ASSE SSEES REPAYMENT OF LOANS IN QUESTION IN CASH ACCORDINGLY HAS A REASONABLE CAUSE. WE ACCEPT THE SOLE SUBSTANTIVE G ROUND RAISED IN THIS APPEAL. THE IMPUGNED PENALTY OF RS.37,10,0 00/- U/S.271E OF THE ACT STANDS DELETED. 6. THIS ASSESSEES APPEAL STANDS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF OCTOBER, 2015. SD/- SD/- (ANIL CHATURVEDI) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 21/10/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 / GUARD FILE. BY ORDER / . //