PRIMO REALTORS P. LTD, MUMBAI V. ADDL CIT 5(2), MUMBAI

ITA 3304/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54941 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Reasonable cause
• Section: 273B; 143(3); 5(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI B RAMAKOTAIAH, ACCOUNTANT MEMBER I T A NOS: 3304/MUM/2010 AND 3305/MUM/2010 (ASSESSMENT YEAR: 2006-2007) PRIMO REALTORS PVT. LTD., MUMBAI APPELLANT (PAN: AAACP8483H) VS ADDITIONAL COMMISSIONER OF INCOME TAX 5(2) RESPON DENT MUMBAI ASSESSEE BY: MR BHUPENDRA SHAH REVENUE BY: MR SK SINGH DATE OF HEARING: 11 TH AUGUST 2011 DATE OF PRONOUNCEMENT: 26 TH AUGUST 2011 O R D E R R V EASWAR, PRESIDENT: THESE ARE TWO APPEALS FILED BY THE ASSESSEE, BOTH RELATING TO THE ASSESSMENT YEAR 2006-07. ITA NO: 3304/MUM/2010 IS AN APPEAL AGAINST THE LEVY OF PENALTY OF ` 7,50,458/- UNDER SECTION 271D OF THE INCOME TAX ACT, 1961, WHICH PROVIDES TH AT IF A PERSON TAKES OR ACCEPTS ANY LOAN OR DEPOSIT IN CONTRAVENTI ON OF THE PROVISIONS OF SECTION 269SS, HE SHALL BE LIABLE TO PAY A PENALTY OF A SUM EQUAL TO THE AMOUNT OF THE LOAN OR DEPOSIT SO T AKEN OR ACCEPTED. ITA NO: 3305/MUM/2010 IS AN APPEAL AGAIN ST THE PENALTY OF ` 5,17,940/- IMPOSED UNDER SECTION 271E FOR CONTRAVENTION OF THE PROVISIONS OF SECTION 269T, WH ICH PROVIDES THAT ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 2 ANY PERSON REPAYING A LOAN OR DEPOSIT REFERRED TO I N SECTION 269T OTHERWISE THAN IN ACCORDANCE WITH THE PROVISIONS OF THAT SECTION SHALL BE LIABLE TO PAY PENALTY OF A SUM EQUAL TO TH E AMOUNT OF THE LOAN OR DEPOSIT SO REPAID. 2. THE BRIEF FACTS GIVING RISE TO THE APPEALS MAY B E NOTED. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN TH E BUSINESS AS BUILDERS AND DEVELOPERS. IN THE COURSE OF THE ASSE SSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAD TAKEN LOANS FROM SHRI KISHORE PAREKH, ONE OF THE DIRECTORS, IN TWO INSTALMENTS OF ` 15,000/- AND ` 30,458/-, AGGREGATING TO ` 45,458/- AND FROM SMT RUBY DHRUV AGGREGATING TO ` 4,30,000/- IN INSTALMENTS OF ` 15,000/-, ` 15,000/- AND ` 4,00,000/-. THESE WERE CASH LOANS. THE ASSESSING OFFICER THEREFORE TOOK THE VIEW THAT THERE WAS A CONTRAVENT ION OF SECTION 269SS OF THE ACT, WHICH PROVIDES THAT NO PERSON SHA LL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OT HERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT , IF THE LOAN OR DEPOSIT EXCEEDS IN THE AGGREGATE THE SUM OF ` 20,000/-. HE THEREFORE CALLED UPON THE ASSESSEE TO SHOW CAUSE WH Y ACTION CANNOT BE TAKEN FOR IMPOSING PENALTY UNDER SECTION 271D OF THE ACT. THE ASSESSEE SUBMITTED THAT THE CASH LOANS WERE REF LECTED IN THE LEDGER ACCOUNTS OF THE DIRECTORS AND THAT IN THE CA SE OF SMT RUBY DHRUV, IT WAS A CURRENT ACCOUNT IN WHICH THE NET AG GREGATE CASH LOAN WAS ` 2,12,060/- TAKING INTO ACCOUNT BOTH THE RECEIPTS AN D THE PAYMENTS. IT WAS POINTED OUT THAT ALL THE TRANSACT IONS ARE GENUINE AND WERE NECESSITATED DUE TO URGENT BUSINESS REQUIR EMENTS AND ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 3 THAT THE DIRECTORS HAD ALSO CONFIRMED THE TRANSACTI ONS. IT WAS SUBMITTED THAT TRANSACTIONS BETWEEN A COMPANY AND I TS DIRECTORS OR SHAREHOLDERS CANNOT BE CONSIDERED AS VIOLATING SECT ION 269SS OR SECTION 269T AND IF AT ALL, THERE WAS ONLY A TECHNI CAL OR VENIAL BREACH. RELIANCE WAS PLACED ON THE CIRCULAR ISSUED BY THE CBDT ON 6 TH SEPTEMBER 1984 (CIRCULAR NO:387), ACCORDING TO WHI CH THE PROVISIONS WERE INTRODUCED ONLY TO PREVENT UNACCOUN TED CASH TRANSACTIONS AND IF THE CASH TRANSACTIONS ARE DULY ACCOUNTED, THEN THERE WOULD BE NO SCOPE TO INVOKE THE STATUTORY PRO VISIONS. 3. THE ASSESSING OFFICER REJECTED THE ABOVE SUBMISS IONS. HE FURTHER NOTED THAT DURING THE YEAR THE ASSESSEE HAD REPAID ` 6,85,000/- IN CASH TO SMT RUBY DHRUV, WHICH ACCORDI NG TO HIM WAS IN CONTRAVENTION OF SECTION 269T OF THE ACT. HE TH EREFORE CALLED UPON THE ASSESSEE TO SHOW CAUSE WHY PENALTY SHOULD NOT BE IMPOSED UNDER SECTION 271E OF THE ACT. IT WOULD AP PEAR THAT THE SAME EXPLANATION WHICH THE ASSESSEE GAVE IN RESPECT OF THE PROCEEDINGS INITIATED UNDER SECTION 271D WAS FURNIS HED IN RESPECT OF THE CONTRAVENTION OF SECTION 269T ALSO. THE ASS ESSING OFFICER DID NOT ACCEPT THE ASSESSEES EXPLANATION AND BY OR DERS DATED 26 TH JUNE 2009 IMPOSED THE IMPUGNED PENALTIES. 4. THE ASSESSEE APPEALED TO THE CIT(A) AND FILED DE TAILED SUBMISSIONS DATED 12 TH APRIL 2001 WHICH, ACCORDING TO THE CIT(A), ARE MERELY REPETITION OF THE SUBMISSIONS MADE BEFOR E THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT AND PENALTY PROCEEDINGS. SEVERAL AUTHORITIES WERE ALSO CITED BEFORE THE CIT( A) IN SUPPORT OF ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 4 THE CONTENTION THAT NO PENALTY WAS IMPOSABLE IN THE CIRCUMSTANCES OF THE CASE. 5. THE CIT(A) REJECTED THE ASSESSEES EXPLANATION A ND SUBMISSIONS. HE REJECTED THE ASSESSEES CONTENTION THAT TAKING A LOAN OR DEPOSIT FROM A DIRECTOR / SHAREHOLDER OR RE PAYING THE SAME TO THE DIRECTOR / SHAREHOLDER WAS ONLY A VENIAL OR TECHNICAL BREACH. ACCORDING TO HIM, THE COMPANY IS A SEPARATE LEGAL E NTITY AND THERE WAS NO EXEMPTION PROVIDED IN THE SECTIONS FOR LOANS TAKEN FROM OR REPAID TO A DIRECTOR / SHAREHOLDER OF A COMPANY. H E FOUND THAT THE ASSESSEE HAD TAKEN CASH LOANS FROM SHRI KISHORE PAR EKH ON TWO OCCASIONS AND FROM SMT RUBY DHRUV ON 21 OCCASIONS. HE NOTED THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE AMOU NTS WERE NOT TAKEN AS LOANS SINCE THERE WAS NOTHING TO SHOW THAT THE ASSESSEE WAS NOT REQUIRED TO REPAY THEM TO SHRI KISHORE PARE KH OR SMT RUBY DHRUV. THE CLAIM THAT IT WAS ONLY A TECHNICAL OR V ENIAL BREACH WAS ALSO REJECTED BY THE CIT(A) ON THE GROUND THAT THER E WERE TOO MANY OCCASIONS IN WHICH THE ASSESSEE COMMITTED A BREACH OF THE SECTIONS AND THEREFORE IT CANNOT BE CALLED A TECHNI CAL OR VENIAL BREACH. AS REGARDS THE ASSESSEES CLAIM THAT IT WA S IN URGENT NEED OF FUNDS AND THEREFORE ACCEPTED THE AMOUNTS IN CASH , THE CIT(A) FOUND THAT THE ASSESSEE COULD NOT EXPLAIN WHAT THE URGENCIES WERE ON 23 OCCASIONS ON WHICH IT RECEIVED LOANS OR DEPOS ITS IN CASH. HE OBSERVED THAT THE ASSESSEE WAS UNABLE TO EXPLAIN TH E URGENCY EVEN ON ONE OCCASION. HE THEREFORE REJECTED THE BUSINES S URGENCY THEORY. AS REGARDS THE ASSESSEES CLAIM THAT THE T RANSACTIONS WERE GENUINE AND THEREFORE NO PENALTY CAN BE IMPOSED, TH E CIT(A) HELD ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 5 THAT IF THE TRANSACTIONS WERE NOT GENUINE THEY WOUL D HAVE BEEN ADDED UNDER SECTION 68 OF THE ACT AND IT IS ONLY BE CAUSE THE TRANSACTIONS ARE GENUINE THAT THEY ARE NOT ADDED IN THE ASSESSMENT UNDER SECTION 68, BUT THE GENUINENESS OF THE TRANSA CTIONS HAS NOTHING TO DO WITH THE APPLICABILITY OF SECTIONS 26 9SS AND 269T. FOR ALL THESE REASONS, THE CIT(A) DISMISSED BOTH TH E APPEALS FILED BY THE ASSESSEE. 6. IT MAY BE NOTED THAT IN THE APPEAL AGAINST THE L EVY OF PENALTY UNDER SECTION 271E (REPAYMENT OF THE LOANS IN CASH) , THE CIT(A) ALSO HELD THAT THE ASSESSEE COULD NOT GIVE ANY REAS ON AS TO WHAT WAS THE URGENCY IN MAKING REPAYMENTS OF THE LOANS I N CASH. 7. THUS THE PENALTIES WERE CONFIRMED BY THE CIT(A) AND THE ASSESSEES APPEALS WERE DISMISSED. 8. THE ASSESSEE IS IN FURTHER APPEALS BEFORE THE TR IBUNAL. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS REITERA TED THE SUBMISSIONS MADE BEFORE THE DEPARTMENTAL AUTHORITIE S AND HAS ALSO FILED A PAPER BOOK CONTAINING THE CASE LAW, BOARD C IRCULARS, ETC. WE HAVE CAREFULLY GONE THROUGH THE SAME AND CONSIDE RED THE RECORD AND THE SUBMISSIONS MADE BEFORE US. SECTION 273B PROVIDES FOR CASES WHERE PENALTY SHALL NOT BE IMPOS ED. ACCORDING TO THIS SECTION, PENALTY UNDER SECTION 271D OR SECT ION 271E SHALL NOT BE IMPOSED FOR ANY FAILURE REFERRED TO IN THOSE PRO VISIONS IF THE ASSESSEE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. THEREFORE, WHAT IS TO BE EXAMINED IS WHET HER THERE WAS REASONABLE CAUSE FOR ACCEPTING OR REPAYING THE LOAN S OR DEPOSITS IN CASH AND IF SO, WHETHER THE ASSESSEE HAS SUCCEEDED IN PROVING THE ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 6 EXISTENCE OF SUCH REASONABLE CAUSE. ON THE QUESTIO N OF REASONABLE CAUSE THERE IS NOTHING BEFORE US OR BEFO RE THE DEPARTMENTAL AUTHORITIES TO SHOW THE EXISTENCE OF T HE SAME. THE ASSESSEE HAS MERELY PLEADED THAT THERE WAS BUSINESS EXIGENCY OR URGENCY NECESSITATING THE TAKING AND REPAYMENT OF T HE MONIES IN CASH. ITS BROAD SUBMISSION IS THAT IN THE CONSTRUC TION INDUSTRY IT IS QUITE COMMON FOR THE PROPRIETORS OF THE BUSINESS OR THE DIRECTORS OF THE COMPANY TO INCUR EXPENSES IN CASH IN THE SITE, WHERE THERE IS CASH DEFICIENCY OR SHORTAGE, SO THAT THE BUSINESS A CTIVITY DOES NOT SUFFER AND THIS WOULD AMOUNT TO REASONABLE CAUSE. THERE IS NO DIFFICULTY IN ACCEPTING THIS PROPOSITION. HOWEVER, IT IS FOR THE ASSESSEE TO PROVE WITH EVIDENCE THAT THE EXPENSES W ERE INCURRED OR THE CASH WAS DEFRAYED BY THE DIRECTOR IN THE SIT E AND THAT THERE WAS CASH SHORTAGE OR DEFICIENCY IN THE SITE NECESSI TATING THE DIRECTOR TO COME TO THE RESCUE OF THE COMPANY. ON THIS ASPECT THERE IS PRECIOUS LITTLE BEFORE US AS EVIDENCE. TH E PAPER BOOK FILED BY THE ASSESSEE CONTAINS THE LOAN CONFIRMATION FROM SHRI KISHORE PAREKH AND SMT RUBY DHRUV (PAGES 76 TO 82). THIS B Y ITSELF DOES NOT PROVE THE EXISTENCE OF REASONABLE CAUSE; IT ONL Y PROVES THAT THE ASSESSEE RECEIVED FROM AND REPAID MONIES TO THE DIR ECTORS IN CASH. IN THE CASE OF SHRI KISHORE PAREKH THE AMOUNT OF ` 15,000/- WAS RECEIVED ON 16 TH APRIL 2005 AND THE AMOUNT OF ` 30,458/- WAS RECEIVED ON 31 ST MARCH 2006. IN THE CASE OF SMT RUBY DHRUV THE LOAN CONFIRMATION ONLY SHOWS THAT VARIOUS AMOUNTS I N CASH WERE RECEIVED FROM HER ON DIFFERENT DATES AND ON 9 TH OCTOBER 2005 AN AMOUNT OF ` 4,85,000/- WAS RECEIVED FROM HER IN CASH. THESE ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 7 CONFIRMATIONS PLACED AT PAGES 76 TO 82 OF THE PAPER BOOK ARE NOTHING BUT THE COPIES OF THE LEDGER ACCOUNTS OF TH E TWO DIRECTORS IN THE BOOKS OF THE ASSESSEE COMPANY. IT DOES NOT SHO W THAT THE ASSESSEE COMPANY WAS SHORT OF CASH AT THE SITE FOR INCURRING EXPENSES CONNECTED TO ITS BUSINESS AND THAT THE DIR ECTORS CONTRIBUTED THE CASH FROM THEIR PERSONAL SOURCES TO DEFRAY SUCH EXPENSES SO THAT THE BUSINESS OF THE COMPANY DID NO T SUFFER. IT IS ONLY THE CASH BOOK OF THE ASSESSEE COMPANY THAT CAN SHOW THAT THERE WAS SHORTAGE OF CASH ON THE DATES ON WHICH TH E ASSESSEE RECEIVED THE MONIES FROM THE DIRECTORS, WHICH IS A SINE QUA NON TO BE SHOWN BY THE ASSESSEE IN AN ATTEMPT TO PROVE THE EXISTENCE OF REASONABLE CAUSE. BUT WE HAVE NOT BEEN PROVIDED WI TH THE CASH BOOK OF THE ASSESSEE COMPANY. EVEN IF IT IS ASSUME D THAT DESPITE THE EXISTENCE OF SUFFICIENT CASH WITH THE ASSESSEE COMPANY IN ITS TILL, STILL THERE COULD BE SHORTAGE OF CASH AT THE CONSTR UCTION SITE, IT IS FOR THE ASSESSEE TO LEAD EVIDENCE AS TO WHERE WERE THE CONSTRUCTION SITES AND HOW THE DIRECTORS HAD HELPED THE ASSESSEE COMPANY BY DEFRAYING THE CASH TO THE ASSESSEE COMPANY SO THAT THE BUSINESS DOES NOT SUFFER. THERE IS ONLY A BROAD STATEMENT T HAT THE CASH WAS REQUIRED FOR URGENT BUSINESS REQUIREMENTS. AS POIN TED OUT BY THE CIT(A), THE ASSESSEE HAS TAKEN CASH FROM THE DIRECT ORS ON 23 OCCASIONS BUT THE ASSESSEE HAS NOT BEEN ABLE TO SHO W THE BUSINESS EXIGENCY OR URGENCY EVEN IN RESPECT OF ONE OF THEM. SINCE NO EVIDENCE HAS BEEN LED BY THE ASSESSEE TO E STABLISH THE EXISTENCE OF REASONABLE CAUSE, WE ARE UNABLE TO FIN D FAULT WITH THE ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 8 DECISION TAKEN BY THE DEPARTMENTAL AUTHORITIES TO L EVY THE IMPUGNED PENALTIES. 9. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE CASE LAW COMPILED IN THE PAPER BOO K AND THE RATIO LAID DOWN IN THOSE CASES. THE PURPOSE OF INTRODUCI NG SECTIONS 269SS AND 269T MAY BE TO UNEARTH BLACK MONEY AND TO PREVENT ASSESSEES, WHO ARE SEARCHED, FROM PLEADING THAT THE CASH FOUND DURING THE SEARCH BELONGED TO SOME OTHER PERSONS. HOWEVER, FOR THE PURPOSE OF CONTESTING THE PENALTIES IMPOSED FOR CONTRAVENTION OF THOSE SECTIONS, THE ONLY DEFENSE AVAILABLE UNDER SE CTION 273B IS TO PROVE THE EXISTENCE OF REASONABLE CAUSE. AS ALREAD Y NOTED, THE ASSESSEE HAS NOT SUCCEEDED IN PROVING REASONABLE CA USE. AS REGARDS THE ASSESSEES PLEA THAT BONA FIDE TRANSACT IONS ARE NOT LIABLE TO PENALTY SINCE NO UNACCOUNTED CASH IS INVO LVED, AGAIN THE ANSWER IS THE SAME. THIS ASPECT HAS BEEN DEALT WIT H BY THE CIT(A), WHICH WE HAVE ALREADY NOTED AND WE AGREE WITH HIM. AS REGARDS THE ARGUMENT THAT SUO MOTU ADVANCES FOR EXPENSES ARE NOT HIT BY THE PENALTY PROVISIONS, WE HAVE TO MERELY REPEAT TH AT IT HAS NOT BEEN ESTABLISHED BY THE ASSESSEE THAT THE DIRECTORS ADVANCED THE MONIES FOR THE SITE EXPENSES WHICH THE COMPANY COUL D NOT DEFRAY DUE TO SHORTAGE OF CASH. AS REGARDS THE CLAIM THAT TRANSACTIONS WITH RELATIVES OR SISTER CONCERNS OR DIRECTORS OR SHAREH OLDERS ARE NOT COVERED BY THESE SECTIONS, WE FIND THAT THIS IS NOT THE RATIO LAID DOWN IN THE CASES CITED BY THE ASSESSEE. IN THE CA SE OF CIT VS. PREETI FUELS & FLAMES (P) LTD. (2011) 330 ITR 129, THE CHHATTISGARH HIGH COURT HELD THAT MONEY DEPOSITED B Y A DIRECTOR IN ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 9 THE BANK ACCOUNT OF THE ASSESSEE COMPANY CANNOT BE CONSIDERED AS A DEPOSIT FOR THE PURPOSE OF SECTION 269SS BECAU SE THE COMPANIES (ACCEPTANCE OF DEPOSITS) RULES, 1975, EXE MPTS SUCH DEPOSIT FROM THE DEFINITION OF DEPOSIT FOR THE PU RPOSE OF THE COMPANIES ACT. THE FACTS IN THE CASE BEFORE US ARE NOT SIMILAR. THE JUDGMENT OF THE GUJARAT HIGH COURT IN CIT VS. S HREE AMBICA FLOUR MILLS CORPORATION (2008) 6 DTR (GUJ) 169 IS A LSO NOT APPLICABLE TO THE PRESENT CASE BECAUSE THERE THE TR IBUNAL DELETED THE PENALTY ON THE GROUND THAT TRANSACTIONS BETWEEN SISTER CONCERNS ARE NOT COVERED BY SECTION 269SS OR SECTION 269T. THIS DECISION OF THE TRIBUNAL WAS AFFIRMED BY THE GUJARAT HIGH COURT . IN THE CASE BEFORE US WE ARE NOT CONCERNED WITH TRANSACTIONS BE TWEEN SISTER CONCERNS. THE ASSESSEE IS A COMPANY AND THE MONIES WERE TAKEN FROM ITS DIRECTORS. THEY CANNOT BE CALLED THE SIST ER CONCERNS OF THE ASSESSEE COMPANY. THE JUDGMENT OF THE MADRAS HIGH COURT IN CIT VS. IDHAYAM PUBLICATIONS LTD. (2006) 285 ITR 221 (M AD) IS ALSO DISTINGUISHABLE ON FACTS. THIS JUDGMENT IS ON FACT S SIMILAR TO THE JUDGMENT OF THE CHHATTISGARH HIGH COURT (SUPRA). I N THE CASE BEFORE THE MADRAS HIGH COURT, THE ASSESSEE COMPANY RECEIVED MONIES IN CASH FROM ITS DIRECTOR IN THE RUNNING CUR RENT ACCOUNT IN WHICH THE DIRECTOR USED TO DEPOSIT AND WITHDRAW MON IES. THE MADRAS HIGH COURT NOTED THAT THE COMPANIES (ACCEPTA NCE OF DEPOSITS) RULES, 1975, EXCLUDES ANY AMOUNT RECEIVED FROM A DIRECTOR OR A SHAREHOLDER OF A PRIVATE LIMITED COMP ANY FROM THE DEFINITION OF DEPOSIT AND THEREFORE THE PROVISION S OF SECTION 269SS WERE NOT ATTRACTED. IN THE CASE BEFORE US, IT IS N OT THE ASSESSEES ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 10 CASE THAT THE AMOUNTS WERE RECEIVED AS DEPOSITS FRO M THE DIRECTORS; IT WAS THE ASSESSEES EXPLANATION BEFORE THE DEPARTMENTAL AUTHORITIES THAT THE MONIES WERE BORRO WED FOR URGENT BUSINESS REQUIREMENTS WHICH CAN ONLY MEAN THAT THEY WERE LOANS TAKEN ON TEMPORARY BASIS FOR DEFRAYING THE EXPENSES OF THE ASSESSEE COMPANY. THERE IS A DIFFERENCE BETWEEN A DEPOSIT AND A LOAN AND AMOUNTS TAKEN IN CASH FROM THE DIRECTORS F OR MEETING URGENT BUSINESS REQUIREMENTS CANNOT BE CONSIDERED A S A DEPOSIT. THEY CAN ONLY BE CONSIDERED AS LOANS THOUGH FOR TEM PORARY PERIODS. IT IS A DIFFERENT MATTER THAT THE ASSESSE E WAS UNABLE TO LEAD EVIDENCE TO SHOW THAT THE MONIES WERE REQUIRED FOR URGENT BUSINESS PURPOSES OF THE ASSESSEE COMPANY. IT IS N OT A MERE DEPOSIT AND WITHDRAWAL OF MONEY FROM THE CURRENT AC COUNT AS IN THE CASE BEFORE THE MADRAS HIGH COURT. THEREFORE, THIS JUDGMENT IS ALSO CLEARLY INAPPLICABLE. 10. SEVERAL DECISIONS HAVE BEEN COMPILED IN THE PAP ER BOOK REGARDING THE EXISTENCE OF BONA FIDE BELIEF AND REA SONABLE CAUSE. THE QUESTION OF BONA FIDE BELIEF WAS NEVER PLEADED BEFORE THE DEPARTMENTAL AUTHORITIES OR BEFORE US. AS REGARDS THE EXISTENCE OF REASONABLE CAUSE, THAT IS A QUESTION OF FACT TO BE ESTABLISHED BY THE ASSESSEE BY LEADING EVIDENCE, WHICH HAS NOT BEEN DO NE. THE QUESTION OF REASONABLE CAUSE WOULD DEPEND ON THE FA CTS OF EACH CASE. HEREIN THE ASSESSEE HAS FAILED TO LEAD EVIDE NCE SHOWING THE EXISTENCE OF REASONABLE CAUSE. 11. FOR THE ABOVE REASONS WE ARE UNABLE TO HOLD THA T THE DEPARTMENTAL AUTHORITIES WERE NOT JUSTIFIED IN IMPO SING THE ITA NO: 3304/MUM/2010 ITA NO: 3305/MUM/2010 11 IMPUGNED PENALTIES. WE CONFIRM THE SAME AND DISMIS S THE APPEALS FILED BY THE ASSESSEE WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST 2011. SD/- SD/- (B RAMAKOTAIAH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDE NT MUMBAI, DATED 26 TH AUGUST 2011 SALDANHA COPY TO: 1. PRIMO REALTORS PVT. LTD. DHEERAJ PLAZA, 4 TH FLOOR, HILL ROAD OPP. BANDRA POLICE STATION, BANDRA (WEST) MUMBAI 400 050 2. ADDL. CIT 5(2), MUMBAI 3. CIT-5, MUMBAI 4. CIT(A)-9, MUMBAI 5. DR C BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI