Dy.CIT, Central Circle-6, Hyderabad V. Smt.G.Venkata Lakshmi, Hyderabad

ITA 3/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82317 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 01-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BALAI NAMAN JAIN
• Keywords: Search and seizure
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 03/HYD/14 ASSESSMENT YEAR: 2007-08 DY. CIT, CENTRAL CIR.-6, -VS- SMT.G. VENKATA LAKSHMI, HYDERABAD. HYDERABAD. PAN:ADBPG1396H (APPELLANT) (RESPONDENT) REVENUE BY SRI R. MOHAN REDDY ASSESSEE BY SHRI BALAI NAMAN JAIN DATE OF HEARING 02-09-2014 DATE OF PRONOUNCEMENT 10-09-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 22/10/13 OF CIT(A)-I, HYDERABAD PERTAIN ING TO ASSESSMENT YEARS 2007-08. 2. THE ONLY ISSUE IN THE AFORESAID APPEAL IS IN RES PECT OF DELETION OF PENALTY IMPOSED U/S 271D OF THE ACT BY THE CIT ( A). 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVI DUAL. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIE D OUT IN THE RESIDENTIAL PREMISES OF THE ASSESSEE. AS A CONSEQU ENCE OF SEARCH ACTION, NOTICE U/S 153A OF THE ACT WAS ISSUED TO TH E ASSESSEE CALLING UPON THE ASSESSEE TO FILE RETURN OF INCOME. IN RES PONSE TO SUCH NOTICE, THE ASSESSEE FILED RETURN OF INCOME DECLARI NG INCOME AT RS. 2 ITA NO . 03/HYD/14 SMT. G. VENKATALAKSHMI 41,99,330. IN COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSING OFFICER NOTICED THAT AS PER THE RECEIPT AND PAYMEN T ACCOUNT, DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR U NDER CONSIDERATION, THE ASSESSEE HAD SHOWN THE RECEIPT O F CASH LOAN OF RS. 11,93,870/- AND LOANS OF RS. 30,63,912 FROM M/S LAH ARI GREEN PARK. AS ALLEGED BY THE ASSESSING OFFICER, IN ABSENCE OF ANY VALID EXPLANATION FROM THE ASSESSEE TO ESTABLISH THE GENU INENESS OF SAID LOANS, THE ASSESSING OFFICER TREATED THE SAME AS U NEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE ASSESSEE CHALLENGED THE ADDITION MADE BEFORE THE CIT (A). 4. THE CIT (A) ON CONSIDERING THE CONTENTIONS OF TH E ASSESSEE DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITI ON BY OBSERVING THAT NO ADDITION CAN BE MADE U/S 68 AS THE ASSESSEE NOT ONLY IDENTIFIED THE CREDITOR BUT ALSO PROVED THE GENUINENESS OF THE TRANSACTION. ON THE BASIS OF THE AFORESAID FACTS, THE ASSESSING OFF ICER WAS OF THE VIEW THAT THE ASSESSEE HAS CONTRAVENED PROVISIONS OF SECTION 269SS OF THE ACT BY ACCEPTING THE LOANS AND ACCORDINGLY REF ERRED THE MATTER TO THE ADDL.CIT FOR LEVY OF PENALTY U/S 271D OF THE AC T. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED FOR IMPOSITION OF PENA LTY U/S 271D, THE ASSESSEE REPLIED THAT SHE HAS NOT TAKEN ANY CASH L OAN DIRECTLY BUT ONLY ADJUSTMENT BY WAY OF JOURNAL ENTRIES WERE MAD E. HENCE THE PROVISIONS OF SECTION 269SS ARE NOT ATTRACTED. THE ADDL. CIT HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND P ROCEEDED TO PASS AN ORDER IMPOSING PENALTY OF AN EQUAL AMOUNT OF RS. 42,57,782 U/S 271 D OF THE ACT. BEING AGGRIEVED OF THE PENALTY O RDER SO PASSED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). 5. IN COURSE OF HEARING BEFORE THE CIT(A) IT WAS CO NTENDED BY THE ASSESSEE THAT IN RESPECT OF SIMILAR NATURE OF TRANS ACTION FOR THE ASSESSMENT YEAR 2005-06 WHEN THE ASSESSING OFFICER IMPOSED PENALTY U/S 271D OF THE ACT, THE MATTER WAS CARRIED IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.1135/HYD/12. THE INCOME-TAX APPELLATE TRIBUNAL VIDE ORDER DT. 9-11-2002 DIRECTED THE ASS ESSING OFFICER TO 3 ITA NO . 03/HYD/14 SMT. G. VENKATALAKSHMI VERIFY AND DELETE THE PENALTY IF IT IS ONLY A JOURNAL ENTRY AND ACTUALLY NO CASH LOAN WAS TAKEN. THE CIT (A) FOLLO WING THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.1135/HYD/12 DATED 9-11-2012 ISSUED A SIMILAR DIRECTION TO THE ASSESSING OFFICER TO VERIFY WHETHER THE ASSESSEE HAD ACTUALLY RECEIVED CASH LOAN FROM M /S LAHARI GREEN PARK OR THEY ARE MERELY JOURNAL ENTRIES. THE CIT (A ) DIRECTED, IF IT IS ULTIMATELY FOUND THAT NO CASH LOAN WAS ACTUALLY REC EIVED BY THE ASSESSEE AND THEY WERE ONLY JOURNAL ENTRIES, TO THA T EFFECT, NO PENALTY U/S 271D CAN BE IMPOSED. BEING AGGRIEVED OF THE AFO RESAID ORDER OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED BY THE ORDERS PASSED BY T HE INCOME-TAX APPELLATE TRIBUNAL, HYDERABAD BENCH IN ASSESSEES O WN CASE FOR ASSESSMENT YEARS 2005-06 IN ITA NO.1135/HYD/2012 D ATED 9-11- 2012 AND ITA NO.394/HYD/13 DATED 12/7/2013 FOR ASSE SSMENT YEAR 2003-04. IT WAS FURTHER SUBMITTED BY THE LEARNED AR THAT THE ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL IN ITA NO.394/HYD/13 (SUPRA) WAS ALSO CONFIRMED BY THE HONBLE AP HIGH C OURT IN ITTA NO.12 OF 2014 WHILE DISMISSING THE APPEAL PREFERRED BY THE DEPARTMENT. A COPY OF THE ORDER OF THE HONBLE HIGH COURT WAS ALSO PLACED BEFORE THE BENCH. 7. THE LEARNED DR AFTER GOING THROUGH THE ORDER O F THE INCOME- TAX APPELLATE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.394/HYD/13 DATED 12/7/2013 FOR ASSESSMENT YEAR 2003-04 AS WEL L AS THE JUDGMENT OF HONBLE AP HIGH COURT IN ITTA NO.12 OF 2014 CONCEDED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE. 8. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WE HAVE ALSO PER USED THE ORDER PASSED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.394/HYD/13 DATED 12/7/2013 AS WELL AS JUDGMENT OF HONBLE A.P . HIGH COURT IN ITTA NO.12 OF 2014 CONFIRMING THE ORDER OF THE CO- ORDINATE BENCH 4 ITA NO . 03/HYD/14 SMT. G. VENKATALAKSHMI (SUPRA). AS CAN BE SEEN FROM FACTS ON RECORD, IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS NOT TAKEN ANY CASH LOAN BUT IT IS MERELY AN ADJUSTMENT BY WAY OF JOURNAL ENTRIES. THE CO-ORDINATE BENCH WHILE CONSIDERING IDENTICAL ISSUE IN ITA NO. 394/HYD/13 AND IN ITA NO.1135/HYD/12 (SUPRA) DIRECTED THE ASSESSING O FFICER TO VERIFY AND DELETE THE PENALTY IMPOSED U/S 271D OF THE ACT IF IT IS FOUND TO BE MERELY AN ADJUSTMENT BY WAY OF JOURNAL ENTRY. THE AFORESAID ORDER OF THE CO-ORDINATE BENCH WAS CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) HOLDING AS UNDER:- WE HAVE CHECKED UP THE RECORD FROM WHICH IT APPEAR S THAT THE LEARNED TRIBUNAL HAS NOT DECIDED ANYTHING NEW IN TH IS MATTER. RATHER, IT RELIED ON ITS OWN JUDGMENT ON AN IDENTIC AL ISSUE RENDERED IN A PREVIOUS CASE ON 9-11-2012. IT IS SAID THAT A GAINST THE SAID ORDER, AN APPEAL HAS BEEN FILED. BUT, WE DO NOT FIN D ANY DIFFICULTY TO DECIDE THE ISSUE AS A WHOLE AS THE RELEVANT FINDING S OF THE PREVIOUS JUDGMENT HAVE BEEN EXTRACTED AND THERE IS NO DISPUT E THAT THE SAME IS ACCURATE OR INCORRECT. HENCE, WE CAN SAFELY RELY ON THE SAME. WE HAVE READ THE REASONING RENDERED IN THE PREVIOUS JUDGMENT. IT APPEARS THAT THE ASSESSEE CHALLENGED THE PENALTY PR OCEEDINGS INITIATED U/S 271D OF THE INCOME-TAX ACT, 1961 ON T HE GROUND OF ILLEGAL BORROWINGS IN CONTRAVENTION OF SECTION 269S S OF THE ACT. THE LEARNED TRIBUNAL ON AN EARLIER OCCASION FOUND THAT THERE IS NO PROOF OF RECEIPT OF SUCH LOAN FROM THE RECORDS AND THEY W ERE ONLY FOUND TO BE JOURNAL ENTRIES. THE LEARNED TRIBUNAL, IN OUR V IEW, CORRECTLY OBSERVED THAT RELYING ON AN ENTRY IN THE JOURNAL, N O PENALTY PROCEEDINGS CAN BE INITIATED. HENCE, IT WAS SENT F OR CLARIFICATION WHETHER ACTUAL FLOW OF MONEY DID TAKE PLACE. THERE FORE, THE MATTER WAS REMANDED AND NO DECISION WAS TAKEN ON MERIT. WE FIND THAT THE LEARNED TRIBUNAL HAS CORRECTLY DEC IDED THE SAME. HENCE, WE DO NOT FIND ANY REASON TO ADMIT THIS MATT ER FOR SETTING THE ISSUE. THE APPEAL IS DISMISSED. THEREFORE, THE CIT (A) HAVING FOLLOWED THE ORDER OF THE CO-ORDINATE BENCH AND DIRECTED THE ASSESSING OFFICER TO VERIFY AND DELETE THE PENALTY IN CASE IT IS FOUND AS MERELY JOURNAL ENTRI ES AND NO CASH LOANS WAS TAKEN, THERE IS NO INFIRMITY IN THE ORDER OF TH E CIT (A). ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT (A) FOR THE YEAR UNDER CONSIDERATION. 5 ITA NO . 03/HYD/14 SMT. G. VENKATALAKSHMI 9. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT ST AND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 0/09/2014. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 10/09/2014 KV COPY TO:- 1) DCIT, CENTRAL CIR-6, HYDERABAD. 2) SMT. G.VENKATA LASKHMI, PLOT NO.723/A, ROAD NO.37, JUBILEE HILLS, HYDERABAD. 3) CIT (A)-I HYDERABAD. 4) CIT (CENTRAL), HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D.