ITO, UDAIPUR V. Shri Ritesh Bhantia, UDAIPUR

ITA 385/JODH/2014

• Counselvise Citation: 38523314 RSA 2014
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 385 /JODH/2014 (A.Y. 200 9 - 1 0 ) ITO, WARD - 1(4), UDAIPUR. VS. SHRI RITESH BHANTIA, 16, SHRI ARIHANT PLAZA, TORAN BAWARI, UDAIPUR . (APPELLANT) PAN NO. ACRPB 6603 M (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI MAHESH KUMAR - D.R. DATE OF HEARING : 1 9 / 0 9 /201 4 . DATE OF PRONOUNCEMENT : 01 / 1 0/201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE D EPARTMENT AGAINST THE ORDER DATED 30 /04 /201 4 OF L D . CIT(A), UDAIPUR . 2 THE ONLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DELETION OF PENALTY OF RS. 7 LAC LEVIED BY THE ASSESSING OFFICER U/S. 271D OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) . 2 3. FACTS RELATING TO THIS CASE, IN BRIEF, ARE THAT THE ASSESSING OFFICER WHILE SCRUTINIZING THE ASSESSMENT NOTICED THAT THE ASSESSEE ACCEPTED LOAN/DE P OSIT OF RS. 7 LAC FROM ONE SHRI SHANTILAL MEHTA ON 21/05/2008 IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT AND REFERRED THE MATTER TO THE JCIT, RANGE - 1, UDAIPUR . ON RECEIPT OF REFERENCE, JCIT UDAIPUR INITIATED THE PENALTY PROCEEDINGS BY ISSU ANCE OF PENALTY NOTICE U/S. 274 R.W.S. 271D OF THE ACT REQUIRING THE ASSESSEE TO SHOW - CAUSE AS TO WHY PENALTY U/S. 271D OF THE ACT SHOULD NOT BE IMPOSED . IN RESPONSE, THE ASSESSEE SUBMITTED AS UNDER: - 1. RITESH BHANTHIA, THE ASSESSEE IS OPERATING BANK ACCOUNT WITH ICICI BANK LTD. UDAIPUR AND HE ISSUED A CHEQUE NO.325161 DATED 21.05.2008 FOR SELF WITHDRAWAL OF RS.7,00,000/ - . BUT DUE TO SOME URGENT AN D UNAVOIDABLE WORK, HE COULD NOT PRESENT THE CHEQUE FOR WITHDRAWAL HIMSELF AND THE SAME WAS HANDED OVER TO HIS BUSINESS ASSOCIATE , SHRI SHANTILAL WITH THE REQUEST TO WITHDRAW THIS MONEY FROM THE BANK AND HAND OVER THE SAME TO THE ASSESSEE. SHRI SHANTILAL MEHTA ACCEDED HIS REQUEST AND WITHDREW THE MONEY OF THE ABOVE CHEQUE AND HANDED OVER THE SAME TO THE ASSES SEE ON THE SAME DATE. SUBSEQUENT TO THIS, THIS AMOUNT WAS DEPOSITED IN THE CASH BOOK OF THE ASSESSEE ON THE SAME DATE. IN SUPPORT OF THIS, THE ASSESSEE FILED COPY OF BANK STATEMENT AND COPY OF CASH BOOK OF THE ASSESSEE. FURTHER IT HAS BEEN MENTIONED BEFORE THE A.O. THAT SINCE SHRI SHANTILAL HAS PRESENTED THE CHEQUE AND WITHDREW THE MONEY, HIS NAME WAS MENTIONED IN THE BANK STATEMENT. 2. FURTHER, IT HAS BEEN SUBMITTED BEFORE THE A.O. THAT NEITHER IT WAS BEARER CASH TRANSACTION WHICH IS IN CONTRAVENTION OF SECT ION 269SS OF I.T. ACT,1961 NOR ANY TYPE OF LOAN OR DEPOSIT WAS TAKEN FROM SHRI SHANTILAL METHA AND THERE IS NO MENTION IN THE BOOKS OF ACCOUNT OF SHRI SHANTILAL MEHTA ABOUT THE LOAN. IN SUPPORT OF THIS, THE ASSESSEE FLED CONFIRMATION 3 FROM SHRI SHANTILAL ME HTA. THE ASSESSEE ALSO GAVE THE PAN OF SHRI SHANTILAL MEHTA. 3. THE CASH WITHDRAWAL FROM THE BANK ACCOUNT OF THE ASSESSEE BY SHRI SHANTILAL MEHTA MUST NOT DEALT AS LOAN/DEPOSIT BY SHRI SHANTILAL METHA. WHEN ANY OF THE AMOUNT WAS NEVER CREDITED IN OUR FINANCI AL BOOKS OF ACCOUNT FOR AND ON BEHALF OF SHANTILAL METHA TO WHOM YOU ARE SAYING LENDER OF MONEY, IT DOES NOT COVER UNDER THE DEFINITION OF LOAN OR DEPOSIT AND THEREFORE, PROVISIONS OF SECTION 269SS CANNOT BE MADE APPLICABLE. IN VIEW OF ABOVE SUBMISSION, IT WAS PLEADED BEFORE THE A.O. THAT THE PENALTY PROCEEDINGS INITIATED U/S.271D OF THE ACT MAY BE DROPPED. 4. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE. ACCORDING TO HIM, THE ASSESSEE HAD ACCEPTED CASH LOAN/ DEPOSIT OF RS. 7 LAC FROM SHRI SHANTILAL MEHTA ON 21/05/2008 AND THE ASSESSEES PLEA THAT SHRI SHANTILAL MEHTA HA D MERELY WITHDRAWN THE CHEQUE ON HIS BE HALF IS AN AFTERTHOUGHT . HE FURTHER OBSERVED THAT IF THE INTENTION OF THE ASSESSEE WAS TO WITHDRAW CASH FROM THE BANK THROUGH SHRI SHANTILAL MEHTA AND HAND IT OVER TO HIM THEN HE WOULD NOT HAVE ISSUED A CHEQUE IN THE NAME OF SHRI SHANTILAL MEHTA BUT WOULD HAVE ISSUED BEARER CHEQUE IN THE NAME OF SELF AS HE HAD BEEN DOING IN SEVERAL OCCASIONS . THE ASSESSING OFFICER HELD THAT THE ASSESSEE ISSUED A BEARER CHEQUE TO SHR I SHANTILAL MEHTA , WHO ENCASHED THE MONEY AND DEPOSITED THE CASH WITH THE ASSESSEE ON THE SAME DATE. THEREFORE, THE 4 ASSESSEE VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT WITHOUT ANY REASONABLE CAUSE AND ACCEPTED THE CASH DEPOSIT OF RS. 7 LAC FROM SHRI SHANTILAL MEHTA. ACCORDINGLY, PENALTY OF RS. 7 LAC WAS LEVIED U/S. 271D OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT CHEQUE NO. 325161 DATED 21/05/2008 AMOUNTING TO RS. 7 LAC WAS IS S U ED F OR SELF WITHDRAWAL FROM THE ICICI B ANK LTD. TO SHRI SHANTILAL MEHTA WHO IS THE BUSINESS ASSOCIATE OF THE ASSESSEE AND THE BANK STATEMENT IS SHOWING THAT SHRI SHANTILAL MEHTA HAD WITHDRAWN CASH AND HANDED OVER THIS CAS H TO THE ASSESSEE ON THE VERY SAME DATE. THIS AMOUNT WAS CREDITED IN THE FINANCIAL BOOKS OF ACCOUNTS I.E. THE CASH BOOK OF THE ASSESSEE AND THIS FACT WAS CONFIRMED BY SHRI SHANTILAL MEHTA. IT WAS FURTHER STATED THAT LD. JCIT HAD NOT CROSS - EXAMINED THE LENDER SHRI SHANTILA L MEHTA WHOSE CONFIRMATION ALONG WITH PAN WAS SUBMITTED WITH THE REPLY DATED 30/04/2012. IT WAS FURTHER STATED THAT THE JCIT HAD NOT EXAMINED THE FACTUAL POSITION OF THIS CASE THAT FROM WHERE MONEY HAD BEEN RECEIVED BY THE LENDER AND IF OWN MONEY WAS WITHDRAWN FROM THE BANK AND CREDITED IN THE CASH BOOK THEN WHERE THE LOANER AND LONEE WERE IN EXISTENCE. IT WAS SUBMITTED THAT THE TRANSFER OF MONEY BY WAY OF BANK 5 VOUCHER INSTEAD OF ACCOUNT PAYEE CHEQUE OR DRAFT DOES NOT ATTRACT PENALTY U/S. 271D OF THE ACT BECAUSE MONEY HAS BEEN TRANSFERRED THROUGH BANKING CHANNEL AND IN THIS CASE NEITHER THE ASSESSEE HAD TAKEN ANY LOAN OR DEPOSIT FROM SHRI SHANTILAL MEHTA NOR SHRI SHANTILAL MEHTA HAD GIVEN ANY MONEY OF HIS OWN TO THE ASSESSEE AND THAT MONEY WAS WITHDRAW N FROM THE ASSESSEE S BANK ACCOUNT AND HANDED OVER BY SHRI SHANTILAL MEHTA, SO IT WAS NOT A LOAN/DEPOSIT. IT WAS REQUESTED THAT THE PENALTY PROCEEDINGS INITIATED U/S. 271D OF THE ACT MAY BE CANCELLED. 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE PENALTY BY OBSERVING IN PARA 2.4 OF THE IMPUGNED ORDER AS UNDER: - 2.4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT ALONGWITH THE FINDINGS OF THE A.O. GIVEN IN THE PE NALTY ORDER UNDER APPEAL AND OTHER SUPPORTING MATERIALS PLACED ON RECORD. IT IS SEEN THAT THE OBSERVATION OF THE A.O. IN TREATING THE DEPOSITS OF RS.7 LAKHS AS LOAN/DEPOSITS TAKEN IN VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT AND SUBSEQUENT IMPOSI TION OF PENALTY U/S.271D OF THE ACT IS NOT SUSTAINABLE BECAUSE, THE PROVISIONS OF SECTION 269SS OF THE ACT PROHIBIT A PERSON FROM TAKING/ACCEPTING LOAN/DEPOSITS FROM THIRD PARTY OF AN AMOUNT OTHER THAN ACCOUNT PAYEE CHEQUES WITHOUT ANY REASONABLE CAUSE AND IF ANYBODY VIOLATE THIS , THEN SUCH PERSON IS LIABLE FOR PENALTY U/S.271 D OF THE ACT WHEREAS IN THE CASE OF THE APPELLANT, THE APPELLANT HAS WITHDRAWN AN AMOUNT OF RS.7 LAKHS THROUGH SHRI SHANTILAL MEHTA, A BUSINESS ASSOCIATE OF THE APPELLANT BY A BEARER CHEQUE FROM ACCOUNT NO.4505003283 OF THE APPELLANT HIMSELF MAINTAINED WITH THE IOCICI .BANK LTD. ON 21.05.2008 DUE TO SOME UNAVOIDABLE CIRCUMSTANCES AS EXPLAINED IN THE SUBMISSION AND THE SAME WAS DEPOSITED IN THE CASH BOOKS OF APPELLANT ON THE SAME DATE. THESE FACTS 6 HAVE NOT BEEN DISPUTED BY THE A.O. FROM THE FINDINGS OF THE A.O. IT APPEARS THAT THE A.O. TREATED THE AMOUNT OF RS.7 LAKHS AS DEPOSIT/LOAN FROM SHRI SHANTILAL MEHTA ONLY ON THE BASIS OF MENTIONING IN THE BANK STATEMENT OF THE APPELLANT AS CASH PAID SHANTILAL MEHTA. IF THIS WAS THE LOAN/DEPOSITS BY SHRI SHANTILAL MEHTA TO THE ASSESSEE THEN, IT SHOULD HAVE BEEN WITHDRAWN FROM THE BANK ACCOUNT OF SHRI SHANTILAL MEHTA AND NOT FROM THE BANK ACCOUNT OF THE APPELLANT. THE WITHDRAWAL OF THE AMOUNT OF RS. 7 LAKHS BY SHRI SHANTILAL MEHTA FROM THE BANK ACCOUNT OF THE APPELLANT THROUGH BEARER CHEQUE ISSUED BY THE APPELLANT WHICH HAS BEEN CONFIRME D BY SHRI SHANTILAL MEHTA IN THE CONFIRMATION FILED BEFORE THE A.O. AND A COPY OF WHICH HAS ALSO BEEN FILED DURING THE APPELLATE PROCEEDINGS. IT IS NOT A CASE OF THE A.O. THAT HE HAS EXAMINED THE BOOKS OF SHRI SHANTILAL MEHTA AND IT WAS FOUND THAT THERE WA S AN ENTRY ACCORDING TO WHICH SHRI SHANTILAL MEHTA HAS GIVEN LOAN TO THE APPELLANT, IT IS ALSO NOT A CASE OF THE A.O. THAT HE HAS EXAMINED SHRI SHANTILAL MEHTA AND DU RING THE COURSE OF EXAMINATION , HE LE, SHRI SHANTILAL MEHTA CONFIRMED THAT HE HAS GIVEN LO AN OF RS.7 LAKHS IN CASH TO THE APPEL LANT ON 21.5.2008. ADMITTEDLY, THE A.O . HAS NOT BROUGHT ANY I A ND OF MATERIAL/EVIDENCE ON RECORD TO ESTABLISH THAT THE DEPOSITS SHOWN IN CASH ON 21.05.2008 IS FROM A THIRD PARTY TAKEN BY THE APPELLANT IN VIOLATION OF PRO VISIONS OF SECTION 269SS OF THE ACT. RATHER THE NARRATION CLEARLY INDICATE T HAT THE DEPOSITS OF RS.7 LAKHS MADE ON 21.5.2008 IS THE AMOUNT WITHDRAWN FROM ICICII BANK ACCOUNT NO.4505003283 OF T HE APPELLANT HIMSELF MAINTAINED BY THE APPELLANT. F ROM THE FACTS OF THE CASE OF THE APPELLANT, IT IS SEEN THAT THE APPELLANT HAS NOT ACCEPTED ANY LOAN/DEPOSIT IN VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT AND THE DEPOSITS OF RS.7 LAKH SHOWN IN HIS CASH BOOK WAS HIS OWN MONEY WITHDRAWN FROM HIS BANK ACCOUNT AS MENTIONED SUPRA AND THEREFORE THE PROVISIONS OF SECTION 269SS CANNOT BE INVOKED IN THE CASE OF THE APPELLANT. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED BY THE APPELLANT IN HIS WRITTEN SUBMISSIONS, IT IS HE LD THAT THE APPELLANT HAS NOT MADE ANY VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT AND THEREFORE PENALTY U/S.271 D OF THE ACT IS NOT EXIGIBLE IN HIS CASE. THE PENALTY IMPOSED U/S.271D OF THE ACT AMOUNTING TO RS.7 LAKHS DESERVES TO BE CANCELLED AND I ORDER ACCORDINGLY. HENCE, BOTH THE GROUNDS TAKEN IN APPEAL ARE ALLOWED. NOW THE DEPARTMENT IS IN APPEAL. 7 7 . LEARNED D.R. REITERATED THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN THE PENALTY ORDER DATED 25/06/2012 AND STRONGLY SUPPORTED THE SAID ORDER. 8 . IN HIS RIVAL SUBMISSIONS, LEARNED COU N SEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE ISSUED A CHEQUE NO. 325161 DATED 21/05/20 08 AMOUNTING TO RS. 7 LAC FOR WITHDRAWAL OF C ASH FROM THE BANK, WHICH WAS MADE BY SHRI SHANTILAL MEHTA ONE OF THE BUSINESS ASSOCIATE OF THE ASSESSEE AND THE AMOUNT WAS CREDITED IN CASH BOOK OF THE ASSESSEE. IT IS NOTICED FROM THE BANK STATEMENT ( COPY OF WHICH IS PLACED AT PAGE NO.5 OF THE ASSESSEES PAPER BOOK ) THAT AN AMOUNT OF RS. 7 LAC HAS BEEN WITHDRAWN FROM THE ASSESSEES BANK ACCOUNT ON 21/05/2008 VIDE CHEQUE NO. 325161 AND FROM THE COPY OF CASH BOOK OF THE ASSESSEE PLACED AT PAGE NO. 6 OF THE ASSESSEES PAPER BOOK, IT IS NOTICED THAT THE SAME AMOUNT HAS BEEN SHOWN AS DEPOSIT IN THE CASH BOOK OF THE ASSESSEE ON THE SAME DAT E. FROM THE ABOVE STATED FACTS, IT IS CRYSTAL CLEAR THAT THE 8 AMOUNT WAS WITHDRAWN FROM THE ASSESSEES BANK ACCOUNT AND WAS CREDITED IN THE ASSESSEES CASH BOOK. SO IT CANNOT BE CONSIDERED AS A DEPOSIT FROM SHRI SHANTILAL MEHTA, WHO WITHDREW THE AMOUNT FROM THE ASSESSEES BANK ACCOUNT AND HANDED OVER IT TO THE ASSESSEE. MOREOVER, IT IS NOT A CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAD GIVEN LOAN OF RS. 7 LAC THROUGH C HEQUE NO. 325161 DATED 21/05/2008 TO SHRI SHANTILAL MEHTA, WHO IN TURN GAVE A LOAN OF RS. 7 LAC IN CASH TO THE ASSESSEE, RATHER THE FACTS ARE ALL TOGETHER DIFFERENT FROM THE PRESUMPTION OF THE ASSESSING OFFICER BECAUSE THE AMOUNT HAS BEEN WITHDRAWN FROM THE ASSESSEES BANK ACCOUNT AND IS DEPOSITED IN ASSESSEES CASH BOOK THROUGH ONE OF HIS BUSINESS ASSOCIATE TO WHOM DUTY WAS ASSIGNED BY HIM TO BRING CASH ON HIS BEHALF FROM THE BANK AND THAT DUTY WAS FULFILLED BY BRINGING THE AMOUNT FROM THE BANK WHICH WAS HANDED OVER TO THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THAT THE CASH DEPOSIT WAS TAKEN BY THE ASSESSEE AND THE PROVISIONS OF SECTION 269SS OF THE ACT WERE APPLICABLE PARTICULARLY WHEN THERE WAS NO SUCH ENTRY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND NO LOAN OR DEPOSIT WAS SHOWN IN THE NAME OF SHRI SHANTILAL MEHTA . IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT TH E BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE WERE NOT RELIABLE. WE THEREFORE, ARE OF THE CONSIDERED VIEW THAT THE PROVISIONS OF 9 SECTION 269SS OF THE ACT WERE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND PENALTY LEVIED BY THE ASSESSING OFFICER AMOUNTING TO RS. 7 LAC U/S. 271D OF THE ACT WAS RIGHTLY DELETED BY THE LD. CIT(A). IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 10 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRONOUNCED IN THE COURT ON 01 ST OCTOBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01 ST OCTOBER , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .