ITO, Ludhiana V. Sh. Sunny Aggarwal, Ludhiana

ITA 446/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6536 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Reasonable cause; Tax effect
• Section: 273B; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 446/CHD/2017 ASSESSMENT Y EAR: 2007-08 THE ITO, VS. SHRI SUNNY AGGARWAL, WARD 6(3), 8-H, SARABHA NAGAR, LUDHIANA. LUDHIANA. PAN NO. AEUPA0513Q (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. CHANDER KANTA, SR.DR RESPONDENT BY : NONE DATE OF HEARING : 23.11.2017 DATE OF PRONOUNCEMENT : 12.12.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 02.12.2016 OF LD. CIT (APP EALS)-3 LUDHIANA PERTAINING TO 2007-08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE PENALTY OF RS.1 3,24,000/- LEVIED BY THE ASSESSING OFFICER U/S 27 ID OF THE INCOME TAX ACT 1961. II) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT APPRECIATING THAT THE AS SESSEE'S MOTHER HAS GIVEN MONEY TO THE ASSESSEE FROM THE IMPREST ACCOUNT OF M/S RAJ KAMAL MARBLES O F WHICH SHE IS THE PROPRIETOR AND THUS THE AMOUNT OF RS.13,24,000/- REPRESENTS THE ACCEPTANCE OF LOAN BY THE ASSESSEE IN VIOLATION OF PROVISIONS OF SECTION 269SS OF THE I.T. ACT. 1961 AND IS NOT A GIFT AS THE ASSESSEE COULD NOT GIVE THE OCCASION O F GIFT, DATES AND AMOUNTS OF GIFT. 2. NO ONE WAS PRESENT AT THE TIME OF HEARING. THE APP EAL WAS PASSED OVER. DESPITE THIS, THE ASSESSEE REMAINED UNREPRESENTE D. HOWEVER, SINCE THE PRESENT APPEAL CAN BE DECIDED ON THE BASIS OF MATER IAL AVAILABLE ON RECORD, IT WAS DEEMED APPROPRIATE TO PROCEED WITH THE P RESENT APPEAL EX- PARTE QUA THE ASSESSEE RESPONDENT ON MERIT AFTER HEARING LD. SR.DR. 3. THE LD. SR.DR RELIES UPON THE PENALTY ORDER. THE RECOR D SHOWS THAT IN THE FACTS OF THE PRESENT CASE, ASSESSEE RETURNED AN INCOME OF RS. 2,37,392/- AND THE ASSESSEE IN THE COURSE OF THE ASSESS MENT PROCEEDINGS WAS REQUIRED TO EXPLAIN THE CASH-FLOW STATEMENT WHEREIN C ASH RECEIPT OF RS. 13,24,000/- WAS REQUIRED TO BE EXPLAINED. THE ASSESSE E EXPLAINED THE SAME AS FROM IMPREST ACCOUNT OF HIS MOTHER SMT. NISHI AGG ARWAL. THE SAID CLAIM WAS SUPPORTED BY WAY OF A GIFT DEED. HOWEVER , THE EXPLANATION OF THE ASSESSEE IN THE PENALTY PROCEEDINGS U/S 271D WE RE NOT ACCEPTED, LEADING TO THE FILING OF THE APPEAL BEFORE THE CIT(A). ITA 446/CHD/2017 A.Y 2007-08 PAGE 2 OF 3 4. BEFORE THE CIT(A), EXPLANATION OFFERED BEFORE THE AO WAS REITERATED. INVITING ATTENTION TO SECTION 56(1)(VI) OF THE INCOME TAX ACT ,1961, IT WAS SUBMITTED THAT THE GIFT WAS FROM RELATIVE AS SUCH, THERE W AS NO VIOLATION OF SECTION 269SS AS THE MOTHER HAD SUPPORTED THE GIFT BY WAY OF A GIFT DEED. CONSIDERING THE EXPLANATION, THE CIT(A) QUASHED THE PENALTY HOLDING AS UNDER : 3.6 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S SUBMISS ION. IT IS CLEAR FROM THE FACTS OF THE CASE THAT DURING THE YEAR THE APPELLAN T HAS RECEIVED A GIFT OF RS. 13,24,000/- FROM HIS MOTHER TO IN WRITING EXECU TED GIFT DEED. I AM INCLINED TO AGREE WITH THE CONTENTION OF THE APPELLANT. APPAREN TLY, THE ASSESSING OFFICER HAS DOUBTED AND HELD THAT THE APPELLANT DELIBERATELY AN D CONSCIOUSLY HAD ACCEPTED A LOAN OF RS. 13,24,000/- IN CASH IN CONTRAVENTION TO PROVISION OF SECTION 269SS OF THE ACT. ACCORDINGLY, THE AO HELD THE APPELLANT IN DEFAULT AND IMPOSED OF PENALTY U/S 271D OF RS. 13,24,000/-.OF THE INCOME TAX ACT, 1961. IN VIEW OF THE DETAILED WRITTEN SUBMISSION FILED BY THE APPELLANT THERE IS NO DOUBT THAT THE APPELLANT HAS RECEIVED A GIFT FROM HIS MOTHER WHICH DOES NOT FALL UNDER ANY CIRCUMSTANCES TO THE LOAN THAT TO BE COVERED UNDER CONTRAVENTION OF SECTION 269SS OF THE ACT. 3.7 IN THIS REGARD, IT IS AN UNDISPUTED FACT THAT THE A PPELLANT HAS TAKEN A GIFT FROM HIS MOTHER SMT. NISHI AGGARWAL. IT IS OBSERVED FROM THE WRITTEN SUBMISSION FILED BY THE APPELLANT, AT THE TIME OF ASSESSMENT T HAT THE MOTHER OF THE APPELLANT HAS GIVEN THE EXPLANATION WITH REGARD TO THE GIFT E XTENDED BY HER TO HIS SON, HAS BEEN FROM THE AMOUNT IMPREST ACCOUNT RECEIVED FROM THE FIRM M/S RAJ MARBLE WHEREIN SHE WAS THE PROPRIETOR. THE APPELLANT HAS A LSO EXPLAINED THAT THE COPY OF ACCOUNT OF HIS MOTHER SMT. NISHI AGGARWAL IN THE THE BOOKS OF M/S RAJ MARBLE HAD BEEN FILED AT THE TIME OF ASSESSMENT PROCEEDINGS, W HEREIN REGULAR CASH WITHDRAWALS HAVE BEEN REFLECTED. THUS, THE TRANSACT ION IS WITHIN THE FAMILY MEMBERS. IT IS ALSO AN IMPORTANT FACT THAT AMOUNT W AS RECEIVED IN CASH FROM M/S RAJ MARBLE AND CREDITED IN THE ACCOUNT OF SMT. NISH I AGGARWAL. FURTHER, SINCE NO INTEREST IS GIVEN, THE ACCOUNT IS NOT IN THE NAT URE OF LOAN ACCOUNT. MOREOVER, THE SAID TRANSACTION IS WITHIN THE FAMILY MEMBERS. BOTH ARE INCOME TAX ASSESSES HAVING 'SEPARATE PAN. IT IS ALSO AN ADMITTED POSITI ON THAT THE CASH RECEIVED WAS DULY SHOWN IN COPY OF ACCOUNT OF SMT. NISHI AGGARWA L SUBMITTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THERE IS NO DOUBT ABOUT THE GENUINENESS OF THE SAID TRANSACTION. IN MY CONSIDER ED VIEW THE ASSESSING OFFICER WITHOUT BRINGING OUT THE FACTS OF NON-CREDIT WORTHI NESS OF SMT. NISHI AGGARWAL HAS CONSIDERED THE ENTIRE AMOUNT AS A LOAN WITHOUT ANY PROPER BASIS. IN MY CONSIDERED VIEW THE ASSESSING OFFICER HAS NOT BROUG HT OUT THE FACTS AND THE REASONS TO HOLD THE GIFT CLAIMED BY THE APPELLANT R ECEIVED FROM HIS MOTHER IS A LOAN. 3.7.1 RELIANCE IS ALSO PLACED ON THE FACTS OF THE CASE OF CIT VS. SUNIL KUMAR GOYAL 315 ITR 163, THE HONBLE PUNJAB & HARYANA HIGH COUR T HELD AS UNDER:- 'A FAMILY TRANSACTION, BETWEEN TWO INDEPENDENT ASSE SSEES, BASED ON AN ACT OF CASUALNESS, SPECIALLY IN A CASE WHERE THE DISCLOSUR E THEREOF IS CONTAINED IN THE COMPILATION OF ACCOUNTS AND WHICH HAS NO TAX EFFECT , IN OUR VIEW ESTABLISHES 'REASONABLE CAUSE' UNDER SECTION 273B OF THE ACT. S INCE THE RESPONDENT-ASSESSEE HAD SATISFACTORILY ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B OF THE ACT HE MUST BE DEEMED TO HAVE ESTABLISHED SUFFICIENT CAUSE FOR NOT INVOKING THE PENAL PROVISIONS (SECTIONS 271D AND 271E OF THE ACT) AGAINST HIM. 3.8 THE FACTS OF THE APPELLANT'S CASE, AS DISCUSSED ABOVE, ARE TO SOME EXTENT ARE SIMILAR TO FACTS OF THIS CASE. RESPECTFULLY, FOLLOW ING THE JUDGMENT OF THE HON'BIE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SUNIL KUMAR GOYAL REFERRED TO ABOVE, I HOLD THAT THE APPELLANT HAS SHOWN REASONAB LE EXPLANATION FOR THE NON CONTRAVENTION OF PROVISION OF SECTION 269SS. THE PE NALTY U/S 271D OF RS.13,24,000/-.OF THE INCOME TAX ACT, 1961 IS, THEREFORE, ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. ITA 446/CHD/2017 A.Y 2007-08 PAGE 3 OF 3 5. NO INFIRMITY IN THE AFORESAID FINDING OF THE CIT(A) HAS BEEN POINTED OUT BY THE REVENUE. IN THESE CIRCUMSTANCES, WHERE THE FACTS REMAIN UNASSAILED AND NO CONTRARY DECISION HAS BEEN CITED BY TH E SR.DR, SATISFIED BY THE FINDING DELIVERED BY THE CIT(A) IN THE IMPUGNED ORDER , THE SAME IS UPHELD. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.12. 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT/CHANDIGARH