LATE SMT. PUSHPA DEVI BAHETI, Ajmer V. ADD. CIT, Ajmer

ITA 441/JPR/2012

• Counselvise Citation: 44123114 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY SOMANI

Judgement Text

ITA NO. 441/JP/2012 LATE SMT. PUSHPA DEVI BAHETI VS. ADDL. CIT , RANGE - 1 AJMER 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 441/JP/2012 ASSESSMENT YEAR: 2006-07 PAN : AASPB 1666 R LATE SMT. PUSHPA DEVI BAHETI VS. THE ADDL. CIT THRU L/H SHRI RAJENDRA BAHETI RANGE-1 H.NO. 22, RAJHANS COLONY, KISHANGARH AJMER (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY SOMANI, CA DEPARTMENT BY: KAILASH MANGAL, JCIT DATE OF HEARING: 09-12-2014 DATE OF PRONOUNCEMENT: 31-12-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT (A), AJMER DATED 07-03-2012 WHEREIN THE L/H OF TH E ASSESSEE HAS RAISED FOLLOWING GROUNDS : THAT THE CONFIRMATION BY LD. CIT(A),AJMER OF PENA LTY OF RS. 1.00 LAC U/S 271D IS BAD IN LAW AND THE FACT OF THE CASE AS:- (1) THE AMOUNT OF RS. 1.00 LAC RECEIVED FROM SHRI B AL MUKUND AJMER WAS ADVANCED AGAINST PROPOSED SALE OF LAND OWNED BY APPELLANT AND THE APPELLANT HAS NOT TAKEN THIS AMOUNT AS LOAN OR DEPOSIT FROM THE PURCHASER OF HER LAND ITA NO. 441/JP/2012 LATE SMT. PUSHPA DEVI BAHETI VS. ADDL. CIT , RANGE - 1 AJMER 2 (2) THE APPELLANT HAS EXPIRED, PENALTY BE NOT LEVIE D ON HUMANITARIAN GROUNDS. 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE CONTENDED THAT THE DECEASED LADY HAD TAKEN AN ADVANCE OF RS. 1.00 LAC AGAINST SALE OF PROPERTY AMOUNTING TO RS. 4.85 LACS FROM ONE SHRI B AL MUKUND. SUBSEQUENTLY, THIS PROPERTY DEAL COULD NOT TAKE PLA CE AND THE VENDEE AGREED TO KEEP THE SAID 1 LAC WITH THE ASSESSEE'S AS A LOA N ON PAYMENT OF INTEREST. THE LD. AR SUBMITTED THAT PROPERTY ADVANCE HAS NOT BEEN DISPUTED BY THE LOWER AUTHORITIES WHICH IS APPARENT FROM THE FOLLOW ING PARAS OF THE LD. CIT(A). 4.2 ARGUMENT OF THE APPELLANT HAS BEEN CAREFULLY CONSIDERED BUT THE SAME IS NOT ACCEPTABLE. IT WAS C LAIMED BY THE APPELLANT THAT INITIALLY THE AMOUNT OF RS. 1.00 LAC WAS RECEIVED AS ADVANCE AGAINST SALE OF LAND BUT THE SA LE TRANSACTION DID NOT MATERIALIZE AND THIS AMOUNT OF RS. 1.00 LAC WAS CONVERTED AS LOAN. IN CASE, THE APPELLANT HAD R ETURNED THE AMOUNT AS SOON AS IT BECAME CLEAR THAT THE SALE AMO UNT CONTINUED TO REMAIN WITH THE APPELLANT FOR MORE THA N THREE YEARS. IN SUCH A SITUATION, THE AO HAS RIGHTLY CONC LUDED THAT THE AMOUNT NO LONGER REMAINS AN ADVANCE AND TAKES THE N ATURE OF A LOAN. THIS IS FURTHER CONFIRMED BY THE FACT THAT AP PELLANT RECEIVED ANOTHER SUM OF RS. 1.50 LACS FROM SHRI BAL MUKUND AJMER BY CHEQUE AS LOAN ON 26-02-2007 AND THE TOTAL AMOUNT OF RS. 2,63,500/- WHICH IS INCLUSIVE OF INTEREST OF RS . 13,500/- WAS REPAID THROUGH CHEQUE BY HER ON 18-03-2009. IN SUCH A SITUATION, THERE IS NOT AN IOTA OF DOUBT THAT THE A MOUNT OF RS. 1.00 LAC RECEIVED IN CASH WAS TREATED AS LOAN BY TH E APPELLANT. ITA NO. 441/JP/2012 LATE SMT. PUSHPA DEVI BAHETI VS. ADDL. CIT , RANGE - 1 AJMER 3 4.3 IN VIEW OF THESE FACTS, ADDL. CIT, RANGE-1, AJM ER HAS RIGHTLY CONCLUDED THAT APPELLANT VIOLATED THE P ROVISIONS OF SECTION 269SS. LEVY OF PENALTY OF RS. 1.00 LAC IS J USTIFIED IN SUCH A CASE AND THE SAME IS CONFIRMED. GROUND NO. 1 OF THE APPEAL IS THUS DISMISSED. THUS THE ASSESSEE HAS BEEN HELD LIABLE TO PENALTY O N A SUBSEQUENT EVENT OF CONVERSION OF PROPERTY ADVANCE INTO INTERE ST BEARING LOAN. LEVY OF PENALTY U/S 271D IS IMPOSABLE ON THE NATURE OF THE AMOUNT AT THE TIME IT IS RECEIVED AND NOT ON THE BASIS OF A SUBSEQUENT UNDER STANDING OF THE PARTIES. THERE IS NO STIPULATION IN THE LAW TO THE EFFECT TH AT IF AN ADVANCE WHICH IS NOT A LOAN IS SUBSEQUENTLY CONVERTED INTO A LOAN IS LIA BLE FOR PENALTY. THOUGH THE ADVANCE HAS BEEN HELD BY THE AUTHORITIES BELOW FOR PURCHASE OF PROPERTY AT THE RELEVANT TIME YET THE PENALTY HAS BEEN LEVIED W HICH IS NOT JUSTIFIED. 2.2 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE RECORD, IT CLEARLY EM ERGES THAT THE AMOUNT OF RS. 1.00 LAC WAS RECEIVED BY THE ASSESSEE AT THE RE LEVANT TIME AS AN ADVANCE AGAINST SALE OF PROPERTY AND WAS NOT IN THE NATURE OF CASH LOAN, WHICH IS NOT ATTRACTED BY SEC. 269SS . THIS BEING SO, THE RECEIP T IN THE HANDS OF THE ASSESSEE AT THE RELEVANT TIME DO NOT AMOUNT TO BE A LOAN. IN THIS EVENTUALITY, PENALTY U/S 271D IS NOT LEVIABLE. ANY SUBSEQUENT CH ANGE IN THE NATURE OF ITA NO. 441/JP/2012 LATE SMT. PUSHPA DEVI BAHETI VS. ADDL. CIT , RANGE - 1 AJMER 4 MUTUAL RIGHTS OF THE PARTY I.E. ITS CONVERSION INTO INTEREST BEARING LOAN DOES NOT AMOUNT TO CONTRAVENTION OF SEC. 269SS. IN THIS VIEW OF THE MATTER, THE PENALTY IMPOSED U/S 271D IS DELETED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31- 12-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 31 ST DEC 2014 *MISHRA COPY FORWARDED TO:- 1.LATE SMT. PUSHPA DEVI BAHETI, AJMER 2. THE ADDL. CIT, RANGE-1, AJMER 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 441/JP/2012) AR ITAT, JAIPUR