Mr. Girishkumar Popatlal Patel, Ahmedabad V. The Jt.CIT, Range-1(3), Ahmedabad

ITA 3072/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8481 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: PRADEEP G TULSION
• Keywords: Search and seizure
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NOS: 3072 & 3073/AHD/2016 (ASSESSMENT YEAR: 2012-13) MR. GIRISHKUMAR POPATLAL PATEL GAYATRI PROVISION STORES 6/1 NR. DARWAJA,SHAHPUR CHAKLA, SHAHPUR, AHMEDABAD V/S THE JOINT COMMISSIONER OF INCOME TAX RANGE(1)(3), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AGPPP2956H APPELLANT BY : SHRI PRADEEP G. TULSION, AR RESPONDENT BY : SHRI SANTOSH KARNANI, SR. D. R. ( )/ ORDER DATE OF HEARING : 17 -04-201 8 DATE OF PRONOUNCEMENT : 19 -04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 3072 & 3073/AHD/2016 ARE TWO APPEALS BY TH E ASSESSEE PREFERRED AGAINST THE TWO SEPARATE ORDERS OF THE LD. CIT(A)-1 0, AHMEDABAD DATED 28.09.2016 PERTAINING TO A.Y. 2012-13 . BOTH THESE APPEALS WERE HEARD TOGETHER ITA NOS. 307 2 & 3073/AHD/2016 . A.Y. 2012-13 2 AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SA KE OF CONVENIENCE AND BREVITY. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A ) ERRED IN UPHOLDING THE LEVY OF PENALTY U/S. 271D AND 271E OF THE ACT FOR THE VI OLATION OF THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS ACCEPTED AMOUNT OF RS. 1.55 L ACS FROM SHRI BHADRESH GIRISHBHAI PATEL AND RS. 37,000/- FROM SHRI BHUPEND RABHAI POPTLAL SHAH IN CASH WHICH IS IN VIOLATION OF THE PROVISIONS OF SEC TION 269SS OF THE ACT. THE A.O. FURTHER NOTICED THAT THE ASSESSEE HAS ALSO MAD E CASH REPAYMENT OF RS. 1.04 LACS TO BHADRESH PATEL AND ACCORDINGLY VIOLATE D THE PROVISIONS OF SECTION 269T OF THE ACT. THE A.O. INITIATED PENAL PROCEEDIN GS U/S. 271D AND 271E OF THE ACT FOR THE ALLEGED VIOLATION AND LEVIED PENALT Y OF RS. 1,92,000/- U/S. 271D OF THE ACT AND RS. 1,04,000/- U/S. 271E OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THEREFORE SHRI BHUPENDRABHAI PATEL IS THE BROTHER OF THE ASSESSEE AND SHRI BHADRESH PATEL IS THE FATHER OF THE ASSESSEE. IT IS THE SAY OF THE LD . COUNSEL THAT THE ASSESSEE IS IN THE BUSINESS OF RETAILED TRADE AND THEREFORE WHENEV ER THERE IS AN URGENT NEED OF MONEY, THE SAME IS TAKEN FROM THE BROTHER AND THE F ATHER. THE LD. COUNSEL VEHEMENTLY STATED THAT THE LEGISLATIVE INTENT IN PR OHIBITING THE ACCEPTANCE AND REPAYMENT OF MONEY IN CASH OVER AND ABOVE RS. 20,00 0/- IS TO CHECK THE UNACCOUNTED MONEY AND NOT TO HIT THE GENUINE BUSINE SS NEED. THE LD. COUNSEL ITA NOS. 307 2 & 3073/AHD/2016 . A.Y. 2012-13 3 PRAYED FOR THE DELETION OF THE PENALTY. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THERE IS NOT DISPUTE THAT THE ASSESSEE HAS T AKEN THE AMOUNT FROM BROTHER AND FATHER IN CASH. THERE IS ALSO NO DISPUT E THAT THE REPAYMENT HAS ALSO BEEN MADE IN CASH. THE HONBLE SUPREME COURT IN THE CASE OF KUM. A.B. SHANTHI 255 ITR 258 HAS HELD THAT THE OBJECT OF INTRODUCING SECTION 269SS IS TO ENSUR E THAT A TAXPAYER IS NOT ALLOWED TO GIVE FALSE EXPLAN ATION FOR HIS UNACCOUNTED MONEY, OR I HE HAS GIVEN SOME FALSE ENTRIES IN HIS ACCOUNTS, HE SHALL NOT ESCAPE BY GIVING FALSE EXPLANATION FOR THE SAME. DURING SEARCH AND SEIZURES, UNACCOUNTED MONEY IS UNEARTHED AND THE TAXPAYER WOULD USUALLY GIVE THE EXPLANATION THAT HE HAD BORROWED O R RECEIVED DEPOSITS FROM HIS RELATIVE OR FRIENDS AND IT IS EASY FOR THE SO CALLED LENDER ALS O TO MANIPULATE HIS RECORDS LATER TO SUIT THE PLEA OF THE TAXPAYER. THE MAIN OBJECT OF SECTION 26 9SS WAS TO CURB THIS MENACE. THE OBJECT SOUGHT TO BE ACHIEVED WAS TO ERADICATE THE EVIL PRA CTICE OF MAKING OF FALSE ENTRIES IN THE AMOUNT BOOKS AND LATER GIVING EXPLANATION FOR THE SAME . FURTHER, THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF TRIUMPH INTERNATIONAL FINANCE 345 ITR 270 HAS HELD THAT EVEN IF THE ASSESSEE HAS TECHNICALLY CONTRAVENED PR OVISIONS OF SECTION 269T, IN ABSENCE OF FINDING TO EFFECT THAT REPAYMENT OF LOAN/DEPOSIT WA S NOT A BONA FIDE TRANSACTION AND WAS MADE WITH VIEW TO EVADE TAX, NO PENALTY UNDER SECTION 27 1E COULD NOT BE IMPOSED FOR CONTRAVENING PROVISIONS OF SECTION 269T . THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF IDHAYAM PUBLICATION LTD. 285 ITR 221 HAS HELD THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE DIRECTOR-CUM-SHAREHOLDER WAS NOT A LOAN OR DEPOSIT AND IT WAS ONLY A CURRENT ACCOUNT IN NATURE AND NO INTEREST WAS BEING CHARGED FOR THE ABOVE TRANSACTION. THE DELETION OF PENALTY WAS JUSTIFIED . ITA NOS. 307 2 & 3073/AHD/2016 . A.Y. 2012-13 4 7. THE FACTS OF THE IMPUGNED APPEAL SHOW THAT SHRI BHU PENDRABHAI PATEL WAS ALSO AN EMPLOYEE OF THE ASSESSEE AND HIS SALARY WAS ALSO CREDITED IN THE SAME ACCOUNT WHERE THE IMPUGNED ACCEPTANCE/REPAYMENT OF CASH WAS FOUND AND IS AKIN TO CURRENT ACCOUNT. THE AMOUNT OF SHRI BHADRES H PATEL IS ALSO AKIN TO CURRENT ACCOUNT. CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE AND ITS BUSINESS EXIGENCIES, THE IMMEDIATE REQUIREMENT OF C ASH CANNOT BE RULED OUT. FURTHER, THE RELATIONSHIP OF THE PERSONS WITH THE A SSESSEE ALSO ESTABLISHES THE GENUINENESS OF THE TRANSACTION. CONSIDERING THE FAC TS IN TOTALITY, WE DO NOT FIND THIS TO BE A FIT CASE FOR THE LEVY OF PENALTY U/S. 271D & 271E OF THE ACT. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A ) AND DIRECT THE A.O. TO DELETE THE IMPUGNED PENALTY. BOTH THE APPEALS BY TH E ASSESSEE ARE ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 04- 201 8 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUN TANT MEMBER AHMEDABAD: DATED 19/04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD