Swadeshi Granite India Pvt Ltd, Calicut V. ACIT, Calicut

ITA 289/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68935 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: R KRISHNAN
• Keywords: Reasonable cause

Judgement Text

ITA NO. 289/ COCH/ 2013 1 IN THE INCOME TAX APELALTER TIBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & B. R. BASKARAN, AM ITA NO. 289 /COCH/ 2013 (ASST YEAR 2007 - 08 ) SWADESHI GRANITE INDIA P LTD MAIN ROAD GHERUVANNUR CALICUT 673 631 VS THE ASST COMMR OF INCOME TAX CIRCLE 2(1), KOZHIKODE ( APPELLANT) (RESPONDENT) PAN NO. AADCS2430E ASSESSEE BY SHRI R KRISHNAN REVENUE BY SMT S VIJAYAPRABHA, JR DR DATE OF HEARING 18 TH JULY 2013 DATE OF PRONOUNCEMENT 5 TH , SEPT 2013 OR D ER PER B.R. BASKARAN, AM: THE APP EAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28.2.2013 PASSED BY THE LD CIT(A), KOZHIKODE AND IT RELATES TO THE AY 2007 - 08. 2 THE PENALTY OF RS. 10,13,951/ - LEVIED BY THE JT COMMISSIONER OF INCOME TAX U/S 271D R.W.S 274 OF THE ACT, HAVIN G BEEN CONFIRMED BY THE LD CIT(A), THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO , DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICED THE RECEIPT OF ADVANCE S OF RS. 5 ,00, 0 00/ - AND RS. 5,13,591/ - BY THE ASSESSEE IN CASH RESPECTIVELY FROM M/S EASTERN AGENCIES AND M/S SWADESHI IMPORTS AND ITA NO. 289/ COCH/ 2013 2 EXPORTS . THE AO TOOK THE VIEW THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SEC. 269SS OF THE ACT AND ACCORDINGLY, REFERRED THE MATTER TO THE JCIT. THE JCIT INIT IATED THE PROCEEDINGS FOR LEVY OF PENALTY U/S 271D OF THE ACT. BEFORE THE JCIT, THE ASSESSEE SUBMITTED THAT THESE AMOUNTS WERE RECEIVED AS PART OF BUSINESS TRANSACTIONS AND NOT AS LOAN OR DEPOSIT . IT WAS SUBMITTED THAT THESE AMOUNTS WERE RECEIVED AS ADVAN CE FOR FUTURE SUPPLY OF MATERIALS. ACCORDINGLY, THE ASSESSEE CONTENDED BEFORE THE JCIT THAT THE PROVISIONS OF SEC. 269SS WILL NOT BE APPLICABLE IN THIS CASE. THE JCIT WAS NOT CONVINCED BY THE SAID EXPLANATION AND HENCE, HE HELD THAT THE ASSESSEE HAS VIOL ATED THE PROVISIONS OF SEC. 269SS OF THE A CT BY ACCEPTING THE ABOVE SAID AMOUNTS BY WAY OF CASH. ACCORDINGLY, HE LEVIED THE PENALTY OF RS. 10,13,951/ - U/S 271D OF THE ACT. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CARRIED THE MATTER BY FILING APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE PENALTY FOR THE REASONS THAT THE ASSESSEE COULD NOT SUBMIT ANY REASONABLE CAUSE FOR TAKING THE ABOVE SAID AMOUNTS IN CASH. THE LD COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE SUPPLIED THE MATERIALS TO TH E ABOVE PARTIES SUBSEQU ENTLY AND IN SUPPORT OF THE SAID CLAIM , THE ASSESSEE FILED COPIES OF THE INVOICES RAISED BY IT TOWARDS SUPPLY OF MATERIAL. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS SHOWN THESES AMOUNTS AS CURRENT LIABILITY ONLY IN ITS FINANCIAL STATEMENTS. THE PARTIES WHO GAVE ADVANCE HAVE ALSO DID NOT SHOW IT AS LOAN OR DEPOSIT IN THEIR FINANCIAL STATEMENTS. ACCORDINGLY , THE LD COUNSEL SUBMITTED THAT THE PROVISIONS OF SEC. 269SS ARE NOT APPLICABLE TO ACCEPTANCE OF TRADE ADVANCES AS THEY ARE N OT IN THE NATURE OF LOAN OR DEPOSIT. 4 THE LD DR SUBMITTED THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM THAT THE IMPUGNED AMOUNTS REPRESENT ADVANCE RECEIVED TOWARD SUPPLY OF MATERIAL BEFORE THE JCIT AND LD CIT(A). FURTHER THE ASSESSEE HAS FAILED T O SHOW THAT THERE WAS A REASONABLE CAUSE IN ITA NO. 289/ COCH/ 2013 3 ACCEPTING THESE AMOUNTS BY WAY OF CASH. THE LD DR FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED FRESH MATERIAL S BEFORE THE TRIBUNAL AND HENCE, THEY REQUIRE VERIFICATION AT THE END OF THE JCIT. 5 WE HAVE HEARD TH E RIVAL CONTENTION S AND CAREFULLY PERUSED THE RECORD. FROM THE ORDER OF THE LD CIT(A) , WE NOTICE THAT THE FIRST APPELLATE AUTHORITY HAS CONFIRMED THE PENALTY LEVIED U/S 271D OF THE ACT FOR THE REASON THAT THE ASSESSEE COULD NOT PRODUCE ANY EXPEDIENT AND REASONABLE CAUSE FOR TAKING THESE AMOUNTS IN CASH. NOW, BEFORE US, THE ASSESSEE HAS SUBMITTED THAT THESE AMOUNTS WERE RECEIVED IN THE REGULAR COURSE OF BUSINESS AS ADVANCE FOR SUPPLY OF THE MATERIALS . ACCORDINGLY IT WAS SUBMITTED THAT THESE AMOUNTS CANN OT BE CONSIDERED AS LOAN OR DEPOSIT AS CONTEMPLATED U/S 269SS OF THE ACT. I N SUPPORT OF THE CLAIM THAT THESE AMOUNTS REPRESENT ADVANCE RECEIVED FOR SUPPLY OF MATERIALS , THE ASSESSEE HAS FILE D COPIES OF INVOICES . WE NOTICE THAT THE ASSESSEE DID NOT PROD UCE THESE DOCUMENTS BEFORE THE TAX AUTHORITIES AND THEY ARE FURNISHED BEFORE US FOR FIRST TIME. WE ALSO NOTICE THAT THE TAX AUTHORITIES HAVE PROCEEDED ON THE PRESUMPTION THAT THE ABOVE SAID AMOUNTS REPRESENT LOAN OR DEPOSIT. HENCE, THERE IS CONTRADICTION BETWEEN THE VIEW TAKEN BY THE TAX AUTHORITIES AND THE EVIDENCES FURNISHED BEFORE US. HENCE , IN OUR VIEW, THIS MA T TER REQUIRES FRESH EXAMINATION AT THE END OF THE JCIT IN THE LIGHT OF THE MATERIAL S FILED BEFORE US. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE JCIT WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH IN THE LIGHT OF MATERIALS REFERRED ABOVE AND ANY OTHER MATERIAL THAT MAY BE FILED BEFORE HIM BY DULY CONSIDERING THE EXPLANATIONS THAT MAY BE G IVEN BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW . ITA NO. 289/ COCH/ 2013 4 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH , DAY OF SEPT 2013. SD/ - SD/ - (N.R.S. GANESAN ) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 5 TH , SEPT 2013 RAJ* COPY TO: 1 APPELLANT - SWADESHI GRANITE INDIA P LTD - MAIN ROAD CHERUVANNUR - CALICUT 673 631 2 RESPONDENT , THE JCIT, CIRCLE 2(1), KOZHIKODE 3 CIT(A) 4 CIT , KOZ HIKODE 5 DR 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN