Nanda Kumari, CHENNAI V. ITO, CHENNAI

ITA 3410/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4530 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: K HEMALATHA
• Keywords: Gift; Reasonable cause
• Section: 153A

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , J UDICIAL MEMBER ./ I.T.A.NO. 3410 /MDS/2016 / ASSESSMENT YEAR :20 08 - 09 MS. NANDA KUMARI, NEW NO. 41, KUTCHERY ROAD, MYLAPORE , CHENNAI 600 0 04 . [PAN: A AEPN4940Q ] VS. THE INCOME TAX OFFICER , NON CORPORATE WARD 1 ( 4 ) , CHENNAI 600 034 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS. K. HEMALATHA , C.A. / RESPONDENT BY : SHRI S HIVA SRINIVAS , J CIT / DATE OF HEARING : 0 2 . 0 3 .201 7 / DATE OF P RONOUNCEMENT : 26 . 0 5 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 2 , CHENNAI DATED 28 . 1 1 .201 6 RELEVANT TO THE ASSE SSMENT YEAR 20 08 - 09 PASSED UNDER SECTION 271D R.W.S. 274 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT) . 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT UNDER SECTION 153C R.W.S. 153A OF THE ACT WAS COMPLETED ON 30.03.3015. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS I.T.A. NO. 3410 /M/16 2 RECEIVED LOANS FROM CERTAIN CREDITORS IN CASH, AMOUNTING TO 3,00,000/ - . THUS, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS BY ISSUING NOTICE UNDER SECTION 271D R.W.S. 274 OF THE ACT AND DULY SERVED ON THE ASSESSEE ON 24.07.2015. SINCE THE ASSESSEE FAILED TO SUBSTANTIATE URGENT NECESSITY TO TAKE LOAN IN CASH FROM THE RELATIVES, THE ASSESSING OFFICER HAS OBSERVED THAT THE CASE OF THE ASSESSEE WOULD FALL UNDER THE PROVISIONS OF SECTION 269SS OF THE ACT AND WOULD NOT COME UNDER EXCEPTION CLAUSE OF SECTION 271D OF THE ACT AND HENCE, PENALTY OF .3,00,000/ - HA S BEEN LEVIED. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS WELL AS FACTS OF THE CASE AND FOLLOWING CASE LAW, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED UNDER SEC TION 271D OF THE ACT. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY REITERATING THE SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW, THE LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE PENALTY LEVIED UNDER SECTION 271D OF T HE ACT SHOULD BE DELETED SINCE THE ASSESSEE HAS ESTABLISHED REASONABLE CAUSE FOR TAKING LOAN IN CASH. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECOR D AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE THE ASSESSEE I.T.A. NO. 3410 /M/16 3 HAS TAKEN UNSECURED LOANS FROM THREE PARTIES AMOUNTING TO .3,00,000/ - IN CASH. AGAINST THE NOTICE UNDER SECTION 271D R.W.S. 274 OF THE ACT, BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS SUBMITTED THAT SHE RECEIVED AN ADVANCE OF .50,000/ - FROM SHRI NATESAN ON 01.04.2007 FOR SALE OF A PROPERTY. SINCE THE PROPERT Y SALE COULD NOT BE REGISTERED, THE ASSESSEE BORROWED .1,00,000/ - FROM KISHANLAL HUF ON 31.05.2007 FOR REPAYMENT. HOWEVER, THE SAME WAS NOT REPAID BUT, SHRI NATESAN GAVE ANOTHER .2,00,000/ - AS AN ADVANCE ON 31.12.2007. FINALLY, THIS ADVANCE OF .2,50,000 / - WAS REPAID BY BORROWING A SUM OF .2,50,000/ - FROM SHRI C. MADHANLAL AND SMT. KANCHANA BAI. THE ABOVE REPLY OFFERED BY THE ASSESSEE WAS NOT ACCEPTED BY THE AUTHORITIES BELOW. 6. FROM THE ABOVE REPLY, IT IS CLEAR THAT FIRST OF ALL THE ASSESSEE HAS NOT GIVEN ANY REASON FOR NOT MATERIALIZING THE SALE OF PROPERTY FOR WHICH SHE HAS RECEIVED ADVANCE OF .50,000/ - FROM SHRI NATESAN ON 01.04.2007. ONCE THE SALE OF THE PROPERTY WAS NOT MATERIALIZED, FOR WHAT REASON SHRI NATESAN HAS GIVEN ANOTHER ADVANCE OF .2 ,00,000/ - ON 31.12.2007. THE ASSESSEE HAS NOT COME WITH ANY DETAIL OF RECEIPT OF THE ABOVE ADVANCES FROM SHRI NATESAN. BY NO STRETCH OF IMAGINATION, NO ONE CAN BELIEVE THAT ANYBODY CAN TAKE LOAN OF .1,00,000/ - TO REPAY .50,000/ - AND SO ON. IF AT ALL TO B ELIEVE THE CONTENTIONS OF THE ASSESSEE, WHAT THE ASSESSEE DID WITH THOSE ADVANCES OF .50,000/ - + 2,00,000/ - STATED TO HAVE RECEIVED FROM SHRI NATESAN SO THAT THE ASSESSEE I.T.A. NO. 3410 /M/16 4 WAS PUT TO TAKE LOAN FOR REPAYMENT OF THE ABOVE AMOUNT. AS RIGHTLY NOTICED BY THE AU THORITIES BELOW, THE ASSESSEE HAS NO PRESSURE FROM SHRI NATESAN TO GET BACK THE MONEY. THE FIRST ADVANCE WAS GIVEN ON 01.04.2007 AND SECOND ADVANCE ON 31.12.2007. THE SAME WERE SETTLED ON 31.03.2008. WHEN SHRI NATESAN COULD WAIT FOR ONE WHOLE YEAR, I.E., F ROM 01.04.2007 TO 31.03.2008, IT IS NOT PALATABLE THAT HE WOULD NOT HAVE WAITED FOR ANOTHER 3 TO 4 DAYS, IF THE ASSESSEE HAD TO REPAY THE AMOUNT BY CHEQUE. IN VIEW OF THE ABOVE, IT COULD BE CLEARLY ESTABLISHED THAT NO SUCH EMERGENCY/URGENCY EXISTED FOR THE ASSESSEE TO TAKE LOAN IN CASH. SINCE THE ASSESSEE HAVING FAILED TO ESTABLISH SUCH MATERIAL EVIDENCE TO SHOW THAT THERE WAS URGENCY FOR THE ASSESSEE TO AVAIL OF LOAN IN CASH, THE AMOUNT TAKEN FROM THE RELATIVES CLEARLY FALL UNDER THE PROVISIONS OF SECTION 269SS OF THE ACT AND DEFINITELY WOULD NOT COME UNDER THE EXCEPTION CLAUSE OF SECTION 271D OF THE ACT. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ASSESSEE WAS UNDER BANKRUPTCY OR UNDER ANY EMERGENCY SITUATION; SHE BORROWED MONEY FROM THE RELATIVES TO MEET THE EXPENSES OR SO. IN THIS CASE, THE SITUATION OF THE ASSESSEE WAS TO REPAY THAT MONEY SHE ALREADY RECEIVED FROM THE SO CALLED SHRI NATESAN. TO REPAY THE MONEY OF .2,50,000/ - , WHICH WAS ALREADY RECEIVED BY THE ASSESSEE, WHAT WAS THE NECESSITY OF TAKING L OAN OF .3,00,000/ - , WAS NOT AT ALL EXPLAINED BY THE ASSESSEE EITHER BEFORE THE ADDL. CIT DURING THE COURSE OF PENALTY PROCEEDINGS OR BEFORE THE LD. CIT(A) DURING THE APPELLATE PROCEEDINGS OR EVEN BEFORE THE TRIBUNAL. I.T.A. NO. 3410 /M/16 5 6.1 THE DECISION IN THE CASE OF CIT V. SMT. M. YESODHA [2013] 3 5 1 ITR 265 (MAD) AS RELIED ON BY THE ASSESSEE HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE BECAUSE IN THAT CASE THE TRANSACTION WAS BETWEEN FATHER - IN - LAW AND DAUGHTER - IN - LAW AND THE GENUINENESS OF THE TRANSACTION WAS NOT D ISPUTED, IN WHICH, THE AMOUNT HAS BEEN PAID DIRECTLY BY THE FATHER - IN - LAW TO THE SELLER FOR THE PURCHASE OF HOUSE IN THE NAME OF THE ASSESSEE AND THAT NECESSARY FUNDS WERE PROVIDED BY THE ASSESSEE S FATHER - IN - LAW AS A CASH GIFT AND THE SAID CASH GIFT WAS T AKEN URGENTLY BY THE ASSESSEE TO GET THE PURCHASE DEED EXECUTED AND NO LOAN WAS TAKEN FROM HER FATHER - IN - LAW. IN THE PRESENT CASE, WE FIND THAT THERE WAS NO SUCH URGENT SITUATION OR REASONABLE CAUSE FOR THE ASSESSEE TO TAKE LOAN IN CASH. 6.2 MOREOVER, TH E CASE LAW RELIED ON BY THE LD. DR IN THE CASE OF NANDHI DHALL MILLS V. CIT [2015] 61 TAXMANN.COM 97 (MAD), WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE COMPANY ACCEPTED CASH LOAN IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE ACT, IN ABSENCE OF AN Y MATERIAL TO SHOW THAT THERE WAS URGENCY FOR ASSESSEE TO AVAIL OF LOAN IN CASH, SUCH TRANSACTION WOULD NOT COME UNDER EXCEPTION CLAUSE OF SECTION 271D OF THE ACT AND PENALTY LEVIED WAS JUSTIFIED, AND WE FIND THAT THE ABOVE CASE LAW IS SQUARELY APPLIES TO THE FACTS OF THE PRESENT CASE. I.T.A. NO. 3410 /M/16 6 6.3 UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND NO REASON TO INTERFERE WITH THE ORDER S OF THE LD. CIT(A) IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271D OF THE ACT AND DISMISS THE GROUND RAISED BY THE ASSESSEE. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED ON THE 26 TH MAY , 201 7 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 26 . 0 5 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.