ACIT, New Delhi V. M/s. Sharmila Furnishing Pvt. Ltd., Gurgaon

ITA 3078/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4319 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALITA KRISHNAMURTHYCA
• Keywords: Additional evidence
• Section: 271E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) (DELHI BENCH G : NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHHA, ACCOUNT MEMBER SHRI SHAMIM YAHHA, ACCOUNT MEMBER SHRI SHAMIM YAHHA, ACCOUNT MEMBER SHRI SHAMIM YAHHA, ACCOUNT MEMBER ITA NO.3078/DEL./2010 ITA NO.3078/DEL./2010 ITA NO.3078/DEL./2010 ITA NO.3078/DEL./2010 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006- -- -07) 07) 07) 07) ACIT, CIRCLE 8(1), ACIT, CIRCLE 8(1), ACIT, CIRCLE 8(1), ACIT, CIRCLE 8(1), VS. VS. VS. VS. M/S SHARMILEE FURNISHING M/S SHARMILEE FURNISHING M/S SHARMILEE FURNISHING M/S SHARMILEE FURNISHING PVT. LTD., PVT. LTD., PVT. LTD., PVT. LTD., NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. JMD REGENT PLAZA, GROUND FLOOR, JMD REGENT PLAZA, GROUND FLOOR, JMD REGENT PLAZA, GROUND FLOOR, JMD REGENT PLAZA, GROUND FLOOR, M.G. ROAD, GURGAON, M.G. ROAD, GURGAON, M.G. ROAD, GURGAON, M.G. ROAD, GURGAON, (PAN/GIR NO. : AAHCS5999J) (PAN/GIR NO. : AAHCS5999J) (PAN/GIR NO. : AAHCS5999J) (PAN/GIR NO. : AAHCS5999J) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SMT. LALITA KRISHNAMURTHY,CA ASSESSEE BY : SMT. LALITA KRISHNAMURTHY,CA ASSESSEE BY : SMT. LALITA KRISHNAMURTHY,CA ASSESSEE BY : SMT. LALITA KRISHNAMURTHY,CA REVENUE BY : SMT. SURJANI MOHANTY, DR REVENUE BY : SMT. SURJANI MOHANTY, DR REVENUE BY : SMT. SURJANI MOHANTY, DR REVENUE BY : SMT. SURJANI MOHANTY, DR ORDER ORDER ORDER ORDER PER A.D. JAIN: JM PER A.D. JAIN: JM PER A.D. JAIN: JM PER A.D. JAIN: JM THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2006-0 7, CONTENDING THAT THE CIT(A) HAS ERRED IN CANCELING TH E PENALTY OF `25,92,615 IMPOSED ON THE ASSESSEE U/S 271E OF THE I.T.AC T, 1961. 2. THE FACTS ARE THAT THE AO COMPUTED THE TOTAL INCO ME OF THE ASSESSEE AT `2,36,42,637, AS AGAINST RETURNED INCOME OF ` 25,87,136. THE CIT(A) GAVE THE ASSESSEE RELIEF OF `98,88,238. PEN ALTY OF AN AMOUNT OF `25,92,615 WAS IMPOSED ON THE ASSESSEE U/S 271E OF THE ACT. WHILE DOING SO, IT WAS OBSERVED THAT THE TAX AUD IT REPORT FILED BY THE ASSESSEE REFLECTED PAYMENT OF `25,92,615 IN CONTRAV ENTION OF THE PROVISIONS OF SECTION 269SS/269T OF THE ACT, I.E,, PAY MENT OTHERWISE THAN BY ACCOUNT CHEQUES/BANK DRAFTS; AND THAT THE ASSESSE E HAD NOT OFFERED ANY EXPLANATION. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE CIT(A) DELE TED THE PENALTY. 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. I.T.A. NO.3078/DEL./10 (A.Y. : 2006-07) 2 5. LD.DR HAS CONTENDED THAT WHILE WRONGLY DELETING T HE PENALTY, THE CIT(A) FAILED TO CONSIDER THAT AS PER THE PROVISIONS OF SECTION 269T OF THE ACT. IF A PERSON REPAYS ANY LOAN OR DEPOSIT OTHER WISE THAN BY ACCOUNT PAYEE CHEQUE OR BANK DRAFT, HE SHALL BE LIAB LE TO PAY BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT OF THE LOAN OR DE POSIT SO REPAID; THAT IN THE PRESENT CASE, SINCE THE PAYMENT WAS NOT MAD E AS PER THE SAID PROVISIONS OF SECTION 269T OF THE ACT, THE PENALTY HAD BEEN RIGHTLY LEVIED. 6. LD.COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS STR ONGLY RELIED ON THE IMPUGNED ORDER. A COPY OF LETTER DAT ED 16.11.09 ISSUED BY THE CIT(A) TO THE AO HAS BEEN FILED. THIS LETTER READS AS FOLLOWS: GOVERNMENT OF INDIA OFFICE OF THE COMMISSIONER OF INCOME-TAX (A)-XI 195B 195-B, C R BUILDING, I P ESTATE, NEW DEIHI PHONE: 2337:8505 /FAX 2~37 0363 -------------------------------------;;------------ --------------------------------------- NO CIT(A)-XI/DEL/ 46/09-10/ 777 DATE: 16/11/09 TO THE JOINT CIT, RANGE-B, C.R. BUILDING, NEW DELHI-LID 002. SUB: SHARMILEE FURNISHING P. LTD ~ AY 06-07 - ORDER U/S 271E - FURNISHING OF ADDITIONAL EVIDENCE U/R 46A MA TTER REG- AT THE APPEAL STAGE, THE LD AR OF THE APPELLANT HAS M ADE A WRITTEN SUBMISSION VIDE NO.500 DATED 05/11/09 (COPY EN CLOSED). 2. IN THIS CASE, ORDER U/S 271E WAS PASSED ON THE GROUND THAT THE REPAYMENT WAS MADE IN VIOLATION OF SECTION 269T OF TH E ACT. BEFORE ME THE LD AR HAS GIVEN A DIFFERENT VERSION STATING THAT N ONE OF SUCH TRANSACTION WILL COME UNDER THE SWEEP OF SECTION 269T. THE COPY OF ORDER SHEET DATED 16/11/09 IS ALSO ENCLOSED FOR YOUR PE RUSAL. 3. YOU ARE REQUESTED TO SPECIFY OBJECTIONS, IF ANY, A ND ALSO OFFER YOUR COMMENTS ON MERIT ON THE SUBMISSION MADE BY TH'E L D AR. . I.T.A. NO.3078/DEL./10 (A.Y. : 2006-07) 3 4. YOUR REPORT III THIS REGARD MAY BE SUBMITTED WITH IN 21 DAYS FROM THE RECEIPT OF THIS LETTER. SD/- (SAMIR MUKHOPADHYAY) CIT(A)-XI, NEW DELHI ENCL: AS ABOVE. MEMO NO. CIT(A)-XI/DEL/ 46/09-10/ 778 DATE: 16/11/09 COPY FORWARDED TO THE M/S PRINCIPAL OFFICERS, MIS SNAR MILEE FURNISHING P LTD., GROUND FLOOR, JMD REGENT PLAZA. M G ROAD, GURGAON(HARYANA) WITH A REQUEST TO COOPERATE WITH TH E DEPARTMENT BY FURNISHING DETAILS AS AND WHEN ASKED FOR BY THE DEPARTM ENT. : SD/- CIT(A)-XI, NEW DELHI. LD.COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT T HE AO DID NOT OFFER ANY COMMENTS BEFORE THE CIT(A). 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. THE CIT(A), IT IS SEEN, HAS DELETED THE PENAL TY, OBSERVING THAT SINCE THERE WAS NO REPAYMENT BY THE ASSESSEE, OF ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE, THE PROVI SIONS OF SECTION 269T OF THE ACT HAD NOT BEEN VIOLATED AND SO, THE I MPOSITION OF PENALTY WAS NOT CALLED FOR. 8. THE CIT(A) HAS TAKEN INTO THE ACCOUNT THE FACTS TH AT THE PAYMENT OF `1,50,000 BY SHARMILEE CHOPRA TO THE ASSESSEE WAS THR OUGH HER JOINT BANK ACCOUNT WITH HER HUSBAND, GAURAV CHOPRA; THAT QUA THE PAYMENT MADE BY SHRI GAURAV CHOPRA, THERE WAS AN OPE NING BALANCE OF `1,77,112 IN THE COMPANYS BOOKS; THAT REGARDING T HE BALANCE AMOUNT OF `4,00,000, THE ENTIRE AMOUNT HAD BEEN TRA NSFERRED BY WAY OF DRAFT FROM THE BANK ACCOUNT OF THE ASSESSEE ON BEHAL F OF SHRI GAURAV CHOPRA (DEBITED TO THE ACCOUNT OF GAURAV CHO PRA); THAT THE I.T.A. NO.3078/DEL./10 (A.Y. : 2006-07) 4 ASSESSEE HAD INCURRED BANK CHARGES OF `350 EACH ON SIX OC CASIONS; THAT SO FAR AS REGARDS THE REPAYMENT, THE ASSESSEE TRANSFER RED `932751.68 EACH TO SMT. SHARMILEE CHOPRA AND SHRI G AURAV CHOPRA BY WAY OF JOURNAL ENTRY; THAT M/S ELECTIC LIVING WAS A F IRM COMPRISING SHRI GAURAV CHOPRA AND HIS WIFE SMT. SHARMILEE CHOPRA THA T THIS FIRM STOOD CLOSED W.E.F. 1.12.03; THAT THERE WAS A CREDIT BALANC E OF `18,65,503 IN THE BOOKS OF THE ASSESSEE COMPANY, WHICH WAS TRANSFERRED T O THE ACCOUNTS OF GAURAV CHOPRA AND SHRAMILEE CHOPRA; THAT THE RETURN OF THE FIRM WAS FILED FOR THE FIRST TIME FOR ASSESSMENT YEAR 2004-05; THAT THE MONEY WAS KEPT IN THE ACCOUNTS OF THE FIRM AND ON LY IN THE RELEVANT ASSESSMENT YEAR, THE BALANCE WAS TRANSFERRED TO THE CREDIT OF THE PARTNERS OF M/S ELECTIC LIVING; THAT THESE PERSONS H APPENED TO BE THE TWO DIRECTORS OF THE ASSESSEE COMPANY; THAT SHRI GAU RAV CHOPRA AND SMT. SHARMILEE CHOPRA MAINTAINED BANK ACCOUNT NO.8331 WITH THE FEDERAL BANK; THAT THE ASSESSEE COMPANY WAS ALSO MAIN TAINING AN ACCOUNT NO.41315 (CUSTOMER ID), WITH THE SAME BANK; T HAT `1,50,000 WAS TRANSFERRED FROM THE JOINT ACCOUNT OF THESE TWO PE RSONS TO THE BANK ACCOUNT OF THE ASSESSEE COMPANY ON 15.12.05, AGAIN ST CHEQUE NO.233715; THAT THERE WAS AN OPENING BALANCE OF `1,7 7,112 IN THE BOOKS OF THE ASSESSEE COMPANY IN R/O GAURAV CHORPA; THAT FOUR CHEQUES, I.E., CHEQUE NO.448461 DATED 29.3.06, NO.44 8462 DATED 29.3.06, NO.448465 DATED 29.3.06 AND NO.448466 DATE D 29.3.06, WERE ISSUED BY THE ASSESSEE; THAT THESE WERE THE LIABILITY OF G AURAV CHOPRA IN FOUR COMPANIES; AND THAT THE ASSESSEE COMPANY HAD PAI D THE LIABILITY ON BEHALF OF GAURAV CHOPRA TO SUCH PARTIES THOROUGH BANKING CHANNELS. 9. THE CIT(A), AS NOTED ABOVE, ASKED THE AO FOR HIS CO MMENTS. THE AO, HOWEVER, DID NOT OFFER ANY COMMENTS BEFORE THE C IT(A). IT WAS THEREUPON THAT THE CIT(A), FINDING THAT ALL THE TRA NSACTIONS HAD BEEN MADE THROUGH BANK ACCOUNTS, OBSERVED THAT THERE WAS NO VIOLATION OF I.T.A. NO.3078/DEL./10 (A.Y. : 2006-07) 5 THE PROVISIONS OF SECTION 269T OF THE ACT AND THAT SO, NO PENALTY U/S 271E OF THE ACT WAS IMPOSABLE. 10. THE ABOVE FACTUAL FINDINGS RECORDED BY THE CIT(A ) REMAIN CONTROVERTED. THEREFORE, FINDING NO ERROR THEREIN, THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GRIEVANCE RAISED BY THE D EPARTMENT IS REJECTED. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON20.4.2011. SD/- SD/- (SHAMIM YAHYA) (A.D.JAIN) ACCOUNTANT MEBER JUDICIAL MEMBER DELHI, DATED : APRIL 20, 2011 SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT, 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT