ALISHAAN DREAM HOUSE P LTD., Jaipur V. ADDL. CIT, Jaipur

ITA 332/JPR/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1961 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 332/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. M/S. AALISHAAN DREAM HOUSE PVT. LTD., A-15, INDRA PALACE, MALVIYA NAGAR, JAIPUR. CUKE VS. THE ADDL. CIT, RANGE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAECA 9512 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 03/11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS ASSESSEES APPEAL CHALLENGING IMPOSITION O F PENALTY UNDER SECTION 271D ON FOLLOWING GROUNDS :- I) PENALTY WAS NOT INITIATED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS. II) THE AMOUNT IN QUESTION BEING SHARE APPLICATION MONE Y AGAINST WHICH SHARES WERE ALLOTTED CANNOT BE HELD TO BE A D EPOSIT IN TERMS OF SECTION 269SS AND PENALTY U/S 271D CANNOT BE IMP OSED. 2. GROUND NO. (I) ABOUT INITIATION OF PENALTY IS NO T PRESSED HENCE DISMISSED. 2 ITA NO. 332/JP/2013 A.Y. 2007-08. M/S. AALISHAAN DREAM HOUSE P. LTD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D RECEIVED SHARE APPLICATION MONEY OVER A PERIOD OF TIME FOR ALLOTMENT OF SHARES FROM ABOVE PARTIES WITHOUT ANY TIME FRAME TOWARDS RETURN/REFUND OF MONEY IN CASE O F NON-ALLOTMENT OF SHARES EITHER FULLY OR PARTLY WITHOUT INTEREST AND LATER ON COMPA NY HAD ALLOTTED SHARES TO THREE PERSONS AS SUCH IT IS NEITHER DEPOSIT NOR LOAN, THU S PROVISION OF SECTION 269SS AND 269T ARE NOT APPLICABLE. ASSESSEE WAS UNDER BONAFIDE BEL IEF THAT THE MONEY RECEIVED IS ONLY FOR THE PURPOSE OF ALLOTMENT OF SHARES, THUS NEITHE R LOAN NOR DEPOSIT WITHIN THE AMBIT OF SECTION 269SS AS SUCH PENALTY U/S 271D AND 271E COUL D NOT BE LEVIED. LD. ADDITIONAL COMMISSIONER OF INCOME TAX RANGE-6 HAS NEITHER CONS IDERED NOR GIVEN ANY FINDING ON THE POINT AS TO HOW THE EXPLANATION GIVEN BY THE AS SESSEE IS NOT GENUINE/REASONABLE EXPLANATION, THUS NOT ACCEPTABLE. AS SUCH IMPOSITIO N OF PENALTY UNDER THE AFORESAID PROVISION WITHOUT CONSIDERING THE EXPLANATION OF TH E ASSESSEE IS BAD IN LAW AND ORDER APPEALED AGAINST IS LIABLE TO BE QUASHED AND SET AS IDE ON THIS SCORE ALONE MORE PARTICULARLY WHEN IT IS SETTLED LAW THAT PENALTY UN DER THE AFORESAID SECTION IS NOT AUTOMATIC. 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND S THAT THE MONEY PAID BY THE SHARE APPLICANTS FOR ALLOTMENT OF SHARES CANNOT BE REGARDED AS LOANS/DEPOSITS OR ADVANCES. RELIANCE IS PLACED ON THE FOLLOWING JUDGM ENTS :- CIT VS. KHAIRATI LAL & CO. (2005) 144 TAXMAN 178 (P & H) CIT VS. KAILASH CHANDRA DEEPAK KUMAR (2009) 317 ITR 351 (ALL.) SHRI LAXMINARAIN SHARMA VS. ADDL. CIT (ITA NO. 59/JP/02) 3 ITA NO. 332/JP/2013 A.Y. 2007-08. M/S. AALISHAAN DREAM HOUSE P. LTD. CIT VS. RUGMINI RAM RAGAV SPINNERS PVT. LTD. (2008) 304 ITR 417 (MAD.) VLS FOODS (P) LTD. VS. ADDL. CIT 128 TTJ 1. ITO VS. AVADH RUBBER LTD. (2010) 8 TAXMANN.COM 57 (KOL.ITAT) OSRAM INDIA PVT. LTD. CIT (DEL F) 51 DTR 309. IT IS FURTHER CONTENDED THAT PENALTY SHOULD NOT BE LEVIED MERELY BECAUSE IT WAS LAWFUL TO DO SO. RELIANCE IS PLACED ON HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC). 5. THE LD. D/R RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CATENA OF JUDGMENTS CITED ABOVE MAKE IT CLEAR THAT THE SHARE APPLICATION MONEY CANNOT BE TREATED AS LOAN/DEPOSIT OR ADVANCE AS CONTEMPLAT ED BY SECTION 269SS. RESPECTFULLY FOLLOWING THESE JUDGMENTS IT IS HELD THAT THE AMOUN T IN QUESTION BEING NOT IN THE NATURE OF LOAN, DEPOSIT OR ADVANCE, NEITHER PROVISIONS OF SECTION 269SS NOR PENAL PROCEEDINGS UNDER SECTION 271D ARE ATTRACTED. THE PENALTY IS D ELETED. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/11/2015. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03/11/ 2015 DAS/ 4 ITA NO. 332/JP/2013 A.Y. 2007-08. M/S. AALISHAAN DREAM HOUSE P. LTD. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. AALISHAAN DREAM HOUSE PVT. LTD. , JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL. CIT, RANGE-6, JAIPUR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.332/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 332/JP/2013 A.Y. 2007-08. M/S. AALISHAAN DREAM HOUSE P. LTD.