FINE PLATINUM (I) LTD, MUMBAI V. ADDL CIT 8(1), MUMBAI

ITA 4449/MUM/2012

• Counselvise Citation: 444919914 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISH J SHETH
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH , MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI R.S.SYAL , A M TA NO. 4449 / MUM / 20 1 2 ( ASSESSMENT YEAR : 200 9 - 10 ) M/S FINE PLATINUM (INDIA) LTD., PLOT NO. 62, SEEPZ - SEZ, ANDHERI (E) , MUMBAI - 400 096 VS. A D CIT - 8(1), MUMBAI PAN/GIR NO. : A AACF 4914 F ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. MANISH J. SHETH /REVENUE BY : ANURAG SHRIVASTAVA DATE OF HEARING : 5 TH AUGUST , 201 3 DATE OF PRONOUNCEMENT : 7 TH AUGUST , 2013 O R D E R P ER SHRI R.K.G UPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 4 - 5 - 2012 , PASSED BY THE LEARNED CIT ( A) - 16 , MUMBAI , RELATING TO ASSESSMENT YEAR 2009 - 10 . 2 . THE ASSESSEE IS OBJECTING IN CONFIRMING THE PEN ALTY OF RS. 3 LAKHS UNDER SECTION 271D OF THE ACT. 3 . DURING THE ASSESSMENT PROCEEDING, THE AO NOTICED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS. 3 LAKHS IN CASH FROM ONE OF ITS DIRECTOR. THE AO ISSUED NOTICED UNDER SECTION 271D. THE CONTENTION OF THE ASSESS EE WAS REJECTED AND ACCORDINGLY, HE LEVIED A PENALTY OF RS. 3 LAKHS. I TA N O. 4449 /20 1 2 2 4 . DETAILED SUBMISSIONS WERE FILED BEFORE THE CIT(A) . RELIANCE WAS PLACED ON VARIOUS CASE LAWS. HOWEVER, LEARNED CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. HENCE, HE CONFIRMED THE ORDER OF THE AO IN LEVYING THE PENALTY UNDER SECTION 271D . 5 . AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL. WE NOTED THAT THE REASONABLENESS FOR ACCEPTING THE LOAN IN CASH FROM ITS D IRECTOR WAS NOT CONSIDERED EITHER BY THE AO OR BY THE CIT(A) . I T IS NOTICED THAT THE LABOUR OF THE COMPANY WAS NOT ATTENDING THEIR DUTY AND THEY WERE MAKING AGITATIONS. CERTAIN EXPENDITURES WERE TO BE MADE URGENTLY AS THE WORKERS WERE RESORTING TO VIOLA TIONS AND TAKING INTO CONSIDERATION THE VIOLATION OF THE WORKERS, THE ASSESSEE MADE PAYMENT TO STAFF AND WORKERS OF RS. 2,34, 123/ - , PF CONTRIBUTION OF RS. 61,763/ - AND ESIC CONTRIBUTION 44,054/ - , RESPECTIVELY. FOR MAKING THESE PAYMENTS URGENTLY THE ASSESSEE ACQUIRED CASH LOAN FROM ONE OF THE DIRECTOR. KEEPING IN MIND THE URGENT NATURE OF THE PAYMENT DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THERE WAS A REASONABLE CAUSE FOR TAKING LOAN IN CASH AT RS. 3 LAKHS. VARIOUS CASE LAW RELIED UPON BY THE LEARNE D AR BEFORE THE CIT(A), WHICH ARE MENTIONED AT PAGE 4 OF THE ORDER OF THE CIT(A) ARE IN SUPPORT OF THE CASE OF THE ASSESSEE . WE FOUND THAT THE LEVY OF PENALTY UNDER SECTION 271D OF THE ACT WAS NOT JUSTIFIED AS THERE WAS A REASONABLE CAUSE IN ACCEPTING THE CASH LOAN. ONCE IT IS ESTABLISHED THAT THER E WAS A REASONABLE CAUSE THEN IN VIEW I TA N O. 4449 /20 1 2 3 OF THE PROVISIONS OF SECTION 273 OF THE ACT, THE PENALTY SHOULD NOT HAVE BEEN LEVIED. ACCORDINGLY, WE CANCEL THE LEVY OF PENALTY. 6 . RESULTANTLY , APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF AUG . 201 3 . SD/ - ( ) ( R.S.SYAL ) SD/ - ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 07/08/ 2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE C I T(A) , MUMBAI . 4. / C I T 5. / DR, ITAT, MUMBAI . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( /ASSTT. REGISTRAR) / ITAT, MUMBAI