ITO, Ambala V. Smt. Kulwinder Kaur, Ambala

ITA 283/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9870 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 13-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Reasonable cause; Tax effect
• Section: 273B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 283 & 284/CHD/2016 ASSESSMENT YEAR: 2009-10 THE INCOME TAX OFFICER, VS SMT. KULWINDER K AUR, WARD 2, PROP. M/S KULWINDER DAIRY, AMBALA. VILLAGE DINARPUR, TEHSIL SAHA, DISTT. AMBALA. PAN: APUPK6290B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MITTAL RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 14.06.2016 DATE OF PRONOUNCEMENT : 17.06.2016 O R D E R BOTH THE APPEALS BY REVENUE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) PANCHKULA DATE D 28.01.2016 FOR ASSESSMENT YEAR 2009-10 CHALLENGING THE CANCELLATION OF PENALTY UNDER SECTION 271D AND 271E OF THE INCOME TAX ACT. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE FACTS ARE IDENTICAL IN BOTH THE APPEALS. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE DERIVE D INCOME FROM DAIRY FARMING BUSINESS AND STATED BEFOR E ASSESSING OFFICER THAT SHE WAS NOT SUPPOSED TO MAIN TAIN 2 BOOKS OF ACCOUNT AS HER INCOME IS BELOW RS. 1,20,00 0/-. SHE HAS ALSO INCOME FROM OTHER SOURCES. DURING ASSESSMENT PROCEEDINGS, ASSESSING OFFICER ASKED THE ASSESSEE TO FILE SOURCE OF CASH DEPOSITS OF RS. 15,01,000/- IN HER SAVING BANK ACCOUNT WITH CORPORA TION BANK, AMBALA CITY. THE ASSESSEE FILED AFFIDAVIT EXPLAINING THEREIN THAT RS. 15 LACS WAS DEPOSITED I N HER ACCOUNT BY HER TRAVEL AGENT SHRI AMIT JAIN OF AMBAL A CITY ON 18.06.2008 FOR HER VISA PURPOSE FOR U.K. H ER VISA WAS REJECTED BY THE EMBASSY AND SHRI AMIT JAIN WITHDREW THE SAME AMOUNT IN TWO INSTALLMENTS ON 19.06.2008. THE ASSESSING OFFICER CONFRONTED THIS STATEMENT TO SHRI AMIT JAIN WHO HAS DENIED THE STATEMENT AND STATED THAT HE HAD GIVEN ONLY RS. 11 LACS WHICH WAS RECEIVED BACK IN CASH. THIS FACT WAS CONFRONTED TO THE ASSESSEE AND ASSESSEE SUBMITTED T HAT RS. 11 LACS WAS RECEIVED FROM SHRI AMIT JAIN ON 18.06.2008 AND BALANCE BELONG TO HER. 3(I) THE ASSESSEE FILED ANOTHER AFFIDAVIT BEFORE AS SESSING OFFICER STATING THAT SHRI AMIT JAIN HAS GIVEN RS. 1 1 LACS ON ACCOUNT OF SALE OF HER LAND. ON BEING QUERY RAIS ED BY THE ASSESSING OFFICER REGARDING DETAILS OF LAND, SH E STATED THAT SAID AGRICULTURAL LAND WAS IN THE NAME OF HER HUSBAND WHO IS IN U.K., THEREFORE, IT WAS NOT POSSI BLE TO REGISTER THE SALE DEED. THEREFORE, SUM OF RS. 11 L ACS RECEIVED IN CASH WAS RETURNED TO SHRI AMIT JAIN IN CASH AFTER WITHDRAWING FROM THE SAVING BANK ACCOUNT. TH E 3 ASSESSING OFFICER MADE ADDITION OF RS. 4 LACS ON AC COUNT OF 'INCOME FROM OTHER SOURCES'. BALANCE AMOUNT OF LOAN OF RS. 11 LACS WAS CONSIDERED AS LOAN RECEIVED IN C ASH IN VIOLATION OF SECTION 269SS AND UNDER SECTION 269T O F THE ACT. THE ASSESSING OFFICER IMPOSED PENALTY UNDER B OTH THE ABOVE PROVISIONS. 4. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) T HAT CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSES SEE ON 18.06.2006, SAME WAS WITHDRAWN ON 19.06.2008. TH E ASSESSEE EXPLAINED THAT THIS AMOUNT WAS DEPOSITED B Y SHRI AMIT JAIN WHO WAS HELPING HER IN GETTING VISA FOR U.K. BECAUSE HER HUSBAND WAS ALREADY THERE. SHRI A MIT JAIN WAS CLOSED FAMILY FRIEND WHO HELPED HER HUSBAN D ALSO TO GO TO U.K. THE STATEMENT OF SHRI AMIT JAIN WAS RECORDED IN WHICH HE HAS ADMITTED OF GIVING AMOUNT OF RS. 11 LACS IN CASH ON 18.06.2008 AND RECEIVED BACK THE SAME AMOUNT IN CASH ON THE NEXT DAY ON 19.06.2008. SHRI AMIT JAIN ALSO STATED THAT THE AMOUNT DID NOT REPRESENT ANY LOAN OR GIFT TO THE ASSESSEE. IT WAS , THUS, A PERSONAL OBLIGATION. SINCE ASSESSEE WAS REQUIRED TO SHOW SUFFICIENT BANK BALANCE FOR GETTING HER VISA, THEREFORE, SHRI AMIT JAIN BECAME INSTRUMENTAL IN GE TTING HER VISA AND ACCOMMODATED ASSESSEE. IT WAS SUBMITT ED THAT SINCE IT WAS PERSONAL ACCOMMODATION, THEREFORE , THERE IS NO VIOLATION UNDER SECTION 269T AND 269SS OF THE ACT. IT WAS FURTHER SUBMITTED THAT PENALTY IS NOT LEVIABLE 4 UNDER BOTH THE ABOVE PROVISIONS BECAUSE OF THE FOLL OWING SPECIAL CIRCUMSTANCES : I) TRANSACTION IS GENUINE AND THERE IS NO LOSS TO THE REVENUE. II) TRANSACTION WAS DONE IN A BONAFIDE MANNER III) THERE IS NO MALAFIDE INTENTION ON THE PART OF THE ASSESSEE TO VIOLATE PROVISIONS OF LAW. IV) NO INTEREST ELEMENT IS INVOLVED IN THE TRANSACTION. V) THE ASSESSEE IS NOT INVOLVED INTO TAX PLANNING OR TAX EVASION. VI) THE ABOVE PROVISIONS ARE MADE IN THE STATUTE TO CURB THE PRACTICE OF EXPLAINING UNACCOUNTED CASH FOUND IN THE COURSE OF SEARCHES CARRIED ON BY THE DEPARTMENT. 5. THE LD. CIT(APPEALS),CONSIDERING SUBMISSIONS OF THE ASSESSEE AND MATERIAL ON RECORD FOUND THAT ASSESSEE HAS BROUGHT THE FACTS AND CIRCUMSTANCES ON RECORD THAT CASH WAS DEPOSITED BY A FAMILY FRIEND F OR SALE PURPOSE AND GETTING VISA FOR THE ASSESSEE TO J OIN HER HUSBAND IN U.K. THE ASSESSEE PRODUCED BANK STATEMENT SHOWING ENTRIES OF DEPOSIT AND WITHDRAWAL OF CASH. THE ASSESSING OFFICER HAD EXAMINED AND LOANEE AND THERE WAS NO DOUBT ON THE GENUINENESS OF THE TRANSACTION. SINCE VISA WAS REJECTED TO THE ASSESSEE, THEREFORE, SHRI AMIT JAIN WITHDREW THE AMOUNT NEXT DAY. THE LD. CIT(APPEALS) FOUND THAT THESE FACTS JUSTIFY BONAFIDE OF THE PURPOSE AND 5 TRANSACTION FOR WHICH CASH AMOUNT WAS TAKEN BY ASSESSEE. THE LD. CIT(APPEALS) FOUND THERE WAS A REASONABLE CAUSE FOR THE FAILURE TO COMPLY WITH PROVISIONS OF LAW AND RELIED UPON DECISION OF HON'B LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS SUNIL KUMAR GOYAL 315 ITR 163 IN SUPPORT OF THE FINDINGS AND HELD THAT ASSESSEE HAS REASONABLE CAUS E FOR FAILURE TO COMPLY WITH PROVISIONS OF LAW AND ACCORDINGLY CANCELLED THE PENALTY IN BOTH THE PROVISIONS. BOTH APPEALS OF THE ASSESSEE WERE ACCORDINGLY ALLOWED. 6. AFTER CONSIDERING RIVAL SUBMISSIONS, I DO NOT FIND ANY MERIT IN BOTH APPEALS OF THE REVENUE. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V SUNIL KUMAR GOYAL 315 ITR 163 HELD AS UNDER: SECTION 273B OF THE INCOME-TAX ACT, 1961, ENVISAGES A NON OBSTANTE CLAUSE AS AGAINST SECTIONS 271D AND 271E OF THE ACT. IN THE EXCEPTIONAL SITUATION ENVISAGED IN SECTION 273B OF THE ACT, IT IS PERMISSIBLE FOR AN ASSESSEE TO SUBSTANTIATE REASONABLE CAUSE' FO R HIS FAILURE TO COMPLY WITH THE PROVISIONS ON THE BASI S WHEREOF PENALTY IS SOUGHT TO BE IMPOSED UPON HIM. I F AN ASSESSEE SUCCESSFULLY DISCHARGES THIS OBLIGATION, IT IS OPEN TO HIM TO RAISE A CLAIM THAT HE SHOULD BE EXCUSE D FROM THE CONSEQUENTIAL PENAL EFFECT. HELD, THAT THERE WAS NO DISPUTE ABOUT THE FACT THAT THE CASH TRANSACTIONS OF THE ASSESSEE WERE WITH THE SIST ER CONCERN AND THESE TRANSACTIONS WERE WITH-IN THE FAMI LY AND DUE TO BUSINESS EXIGENCY. A FAMILY TRANSACTION, 6 BETWEEN TWO INDEPENDENT ASSESSEES, BASED ON AN ACT OF CASUALNESS, SPECIALLY IN A CASE WHERE THE DISCLOSURE THEREOF WAS CONTAINED IN THE COMPILATION OF ACCOUNT S, AND WHICH HAD NO TAX EFFECT, ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B OF THE ACT. SINCE THE ASSES SEE HAD SATISFACTORILY ESTABLISHED 'REASONABLE CAUSE UN DER SECTION 273B OF THE ACT, HE MUST BE DEEMED TO HAVE ESTABLISHED SUFFICIENT CAUSE FOR NOT INVOKING THE P ENAL PROVISIONS OF SECTIONS 271D AND 271E OF THE ACT AGAI NST HIM. THE DELETION OF PENALTY BY THE TRIBUNAL WAS VALID. 7. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIE D UPON ORDERS OF ITAT CHANDIGARH SMC BENCH IN THE CASES OF M/S CHAWLA CHEMTECH PVT. LTD. VS JCIT ITA 776/2015 DATED 29.02.2016 AND SHRI MOHANJEET SINGH VS JCIT 778/2015 DATED 29.02.2016 IN WHICH ON FINDING REASONABLE CAUSE IN FAVOUR OF THE ASSESSEE, PENALTY UNDER SECTION 271D WAS CANCELLED. 8. CONSIDERING THE FACTS OF THE CASE IN THE LIGH T OF THE ABOVE DECISIONS, IT IS CLEAR THAT ASSESSEE HAS RECEIVED CASH OF RS. 11 LACS FROM SHRI AMIT JAIN FO R THE PURPOSE OF GETTING HER VISA AND ON REJECTION OF THE VISA, AMOUNT WAS WITHDRAWN BY SHRI AMIT JAIN ON THE NEXT DAY. SHRI AMIT JAIN WAS EXAMINED AT ASSESSMEN T STAGE. HE HAS ADMITTED OF GIVING THE AMOUNT IN CAS H ON 18.06.2008 AND TAKING BACK THE SAME AMOUNT IN CASH ON THE NEXT DAY ON 19.06.2008. THE ASSESSING OFFICER FOUND TRANSACTION TO BE GENUINE AND NO 7 ADDITION UNDER SECTION 68 OF INCOME TAX ACT WAS MADE. THUS, ASSESSEE HAS BEEN ABLE TO PROVE THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO COMPLY WI TH PROVISIONS OF LAW. THE CASE OF THE ASSESSEE IS SQU ARELY COVERED BY DECISION OF HON'BLE PUNJAB & HARYANA HIG H COURT IN THE CASE OF SUNIL KUMAR GOYAL (SUPRA). THEREFORE, THERE IS NO MERIT IN THE DEPARTMENTAL APPEALS. BOTH THE APPEALS OF THE REVENUE ARE, ACCORDINGLY, DISMISSED. 9. IN THE RESULT, BOTH APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 17 TH JUNE, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD