R.BHOOMA ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE3(1), CHENNAI V. M/S. STAHL INDIA PVT.LTD , KANCHIPURAM

ITA 322/CHNY/2023

AI Insights

The case revolves around a penalty imposed by the Assessing Officer under section 271E of the Income Tax Act, which was later deleted by the CIT(A). The penalty was initially levied for an alleged violation of section 269T, which pertains to the mode of repayment of certain amounts. The revenue challenged the CIT(A)'s decision, arguing that the penalty should stand as the repayment was not made through account payee cheques or bank drafts. However, the CIT(A) found that the repayment was effectively a book entry adjustment against sales, with no actual movement of money. The Tribunal upheld the CIT(A)'s decision, referencing judicial precedents that support the view that such book entries do not constitute a violation of section 269T.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134272 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 13-03-2023
• Other Referred Cases: Pr. Commissioner of Income Tax Vs. Shakti Foundation (2019) 107 taxman.com 459
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271E

Judgement Text

आयकर अपीलीय अिधकरण “बी” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ी वी. द ु गा राव, ाियक सद! एवं माननीय ी मनोज कु मार अ&वाल ,लेखा सद! के सम)। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.322/Chny/2023 (िनधा रण वष / As sessment Year: 2013-14) ACIT Corporate Circle-3(1), Chennai. बनाम/ V s . M/s. Stahl India Private Ltd. 1A, Sargunar Salai,Chrompet, Chennai-600 044. था यी ले खा सं. /जी आ इ आ र सं. /PA N / G I R N o . AACCS- 3208-H (अपीलाथ /Appellant) : (!"थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri D.Hema Bhupal (JCIT) -Ld. Sr. DR !"थ कीओरसे/Respondent by : Shri Sriram Seshadhri (CA)- Ld. AR सुनवाईकीतारीख/Date of Hearing : 26-07-2023 घोषणाकीतारीख /Date of Pronouncement : 26-07-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by deletion of penalty u/s 271E for Rs.106.73 Lacs for Assessment Year (AY) 2013-14 by first appellate authority vide impugned order dated 16.01.2023, the revenue is in further appeal before us. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 16-01-2023 in the matter of impugned penalty levied by Ld. Assessing Officer [AO] u/s. 271E of the Act vide 2 ITA No.322/Chny/2023 order dated 28-02-2022. The grounds taken by the Revenue read as under: 1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2. The Ld. CIT(A) erred in holding that the penalty levied u/s.271FE does not sustain as there is no violation of section 269t of the IT Act 1961, in this case. 3. The Ld. CIT(A) ought to have appreciated the fact that the decision rendered in the case of Pr. Commissioner of Income Tax Vs. Shakti Foundation reported in (2019) 107 teaxman.com 459 has not been accepted by the Revenue and SLP has been filed before the Supreme Court, which has been admitted by the Supreme Court. Having heard rival submissions and after perusal of case records, the appeal is disposed-off as under. 2. The Ld. AO levied impugned penalty u/s 271E for violation of provisions of Sec.269T on the ground that the assessee repaid amount of Rs.106.73 Lacs to M/s Sri Manjubhasini Chemicals (P) Ltd. (SMCPL) otherwise than by way of account payee cheque or bank draft. 3. Upon further appeal, Ld. CIT(A) deleted the penalty on the ground that the amount payable to SMCPL was adjusted against amount receivable on sales made by assessee to SMCPL. The repayment to SMCPL was made by way of book entry and there was no movement of money in the form of cash or any other means. Therefore, the provisions of Sec.269T would not apply and the impugned penalty would not survive in terms of various judicial decisions. Aggrieved, the revenue is in further appeal before us. 4. We find that the basic facts are not in dispute. Upon perusal of tabulation made in para 6.2 and findings rendered in para 6.3 of the impugned order, it could be seen that the total outstanding against SMCPL has fully been adjusted by way of book entry against sales made 3 ITA No.322/Chny/2023 by assessee to that entity. There was no money transaction. Therefore, the ratio of judicial decisions including the decision of Hon’ble Rajasthan High Court in the case of Pr. CIT vs. Shakti Foundation (107 Taxmann.com 459) as well as other decisions of other High Courts would apply supporting the view taken by Ld. CIT(A). Hence, no interference is warranted in the same. 5. The appeal stand dismissed. Order pronounced on 26 th July, 2023. Sd/- Sd/- (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) ाियक सद!/JUDICIAL MEMBER लेखासद! / ACCOUNTANT MEMBER चे5ई Chennai; िदनांक Dated : 26-07-2023 DS आदेशकीTितिलिपअ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. !"थ /Respondent 3. आयकरआयु>/CIT 4. िवभागीय!ितिनिध/DR 5. गाडCफाईल/GF