Sh. Paramjit Singh Ahluwalia (Prop.), Jalandhar V. The Addl. Commissioner of Income Tax, Jalandhar

ITA 304/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9565 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA NO.304/ASR/2016 A.Y. 1998-99 2 SH. GIAN SINGH, IT WAS OBSERVED THAT HE HAD GIVEN A LOAN OF RS. 5 LACS IN THE MONTH OF DECEMBER, 1997 TO THE ASSESSEE AND THE REFORE, HIS CASE WAS REOPENED AND THE AO ASKED MR. GIAN SINGH TO EXPL AIN THE SOURCE OF LOAN ADVANCED TO SH. PARAMJIT SINGH, THE ASSESSEE I N THE PRESENT CASE. IN THAT CASE, THE AO ACCEPTED THE SOURCE OF RS.3,25,00 0/- AND FOR THE REMAINING AMOUNT OF RS.1,75,000/-, HE MADE THE ADDI TION AND THEREFORE, THE PENALTY PROCEEDINGS UNDER SECTION 271D FOR ACCE PTANCE OF LOAN IN CASH WAS INITIATED AGAINST THE ASSESSEE. THE ASSESS EE SUBMITTED VARIOUS SUBMISSIONS DENYING THE ALLEGED LOAN OF RS.5 LACS IN CASH OR IN KIND FROM SH. GAIN SINGH AND FURTHER SUBMITTED THAT PEN ALTY UNDER SECTION 271D CANNOT BE IMPOSED IN THE ABSENCE OF PASSING O F ORDER OF ASSESSMENT. IT WAS ALSO SUBMITTED BEFORE THE AO TH AT THE ASSESSEE HAD GIVEN BLANK CHEQUE TO HER LAND-LADY SMT. BAKSHISH K AUR AS A SECURITY FOR REGULAR PAYMENT OF RENT AND MR. GIAN SINGH, WH O WAS THE NEIGHBOURER OF THE LAND-LADY FILLED THE AMOUNT OF R S. 5 LCS IN THE BLANK CHEQUE TO PUT PRESSURE ON THE ASSESSEE TO VACATE TH E RENTED PREMISES. IT WAS FURTHER SUBMITTED THAT A CASE WAS PENDING IN TH E COURT OF ADDITIONAL SESSIONS JUDGE, JALANDHAR. IT WAS ALSO SUBMITTED TH AT SH. GIAN SINGH HAD STATED BEFORE THE COURT THAT A SUM OF RS. 5 LAC S WAS GIVEN TO THE ASSESSEE FOR ENTERING INTO PARTNERSHIP WITH THE ASS ESSEE. THE ASSESSEE ALSO FILED RELEVANT DOCUMENTS REFLECTING THEREIN TH AT SH. GIAN SINGH HAD FILED A SUIT FOR RECOVERY AND IN THE SUIT FOR RECOV ERY SH. GIAN SINGH HAD CLAIMED THAT THE SAID AMOUNT WAS PAID TO THE ASSESS EE AS A PARTNER AND ITA NO.304/ASR/2016 A.Y. 1998-99 4 OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO CROSS E XAMINE SH. GIAN SINGH. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY PLACED R ELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF MATERIAL PLACED ON RECORD. WE FIND THAT IN THE PRESENT CASE, THE AO WITHOUT PASSING ANY ASSESSMENT ORDER HAS PASSED PENALTY ORDER U/S 271D OF THE ACT, BY HOLDING THAT THE ASSESSEE HAD RECEIVED CASH LOAN OF RS.5 LACS FROM SH. GIAN SINGH. THE CONTENTION OF THE LD. COUNSEL FOR T HE ASSESSEE THAT SINCE IN THE CASE OF SH. GIAN SINGH, NO ADDITION HAS BEEN MADE AND THEREFORE, NO PENALTY CAN BE LEVIED IN THE CASE OF THE ASSESSE E DOES NOT HOLD ANY FORCE, AS IN THE CASE OF SH. GIAN SINGH, THE AO HAD ACCEPTED THE SOURCE OF RS.3,25,000/- OUT OF RS.5 LACS, WHICH WAS ALLEGE D TO HAVE BEEN GIVEN TO SH. PARAMJIT SINGH. THE AO HAD NOWHERE STATED TH AT THE LOAN WAS NOT GIVEN TO THE ASSESSEE. ON THE CONTRARY, HE HAS HEL D THAT THE LOAN WAS GIVEN TO SH. PARAMJIT SINGH AND HAD MADE THE ADDITI ON FOR UNEXPLAINED SOURCES FOR MAKING ADVANCE OF RS. 5 LACS. HOWEVER, WE FIND THAT IN THE RECOVERY SUIT FILED BY SH. GIAN SINGH AGAINST SH. P ARAMJIT SINGH THE ASSESSEE, SH. GIAN SINGH HAD STATED THAT HE HAD GIV EN AMOUNT OF RS.5 LACS TO HIM FOR ENTERING INTO HIS PROPRIETORY BUSI NESS, AS PARTNER. THE RELEVANT FACTS OF THE RECOVERY SUIT AS REPRODUCED I N THE ASSESSMENT ORDER ARE REPRODUCED AS UNDER: 1. THAT THE AMOUNT OF RS.5,00,000/- NEITHER PERTAI N TO LOAN NOR DEPOSIT BUT THE AMOUNT OF RS.5,00,000/- WAS GIVEN B Y GIAN ITA NO.304/ASR/2016 A.Y. 1998-99 6 THE OPINION THAT PENALTY IN THIS CASE WAS NOT IMPOS ABLE AND THEREFORE, WE DELETE THE SAME. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/09/201 6. SD/- SD/- (A.D. JAIN) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 15/09/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:LATE SH. PARAMJIT SINGH AHLUWALIA , JA LANDHAR 2. THE ADDL. CIT, RANGE-III, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.