Rajesh Khanna, Mohali V. JCIT, Range, Panchkula

ITA 45/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4077 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 12-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: RAJESH KHANNA
• Keywords: Gift; Principle of natural justice; Reasonable cause; Agreed addition
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SHRI. SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.45/CHD/2018 ASSESSMENT YEAR: 2011-12 SHRI. RAJESH KHANNA VS. THE JCIT S/O LATE M.R. KHANNA PANCHKULA RANGE R/O H.NO. 773, SECTION 91, MOHALI PAN NO. AKOPK1364K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. RAJESH KHANNA REVENUE BY : SMT. CHANDRAKANTA DATE OF HEARING : 02/08/2018 DATE OF PRONOUNCEMENT : 07/08/2018 ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A), PANCHKULA DT. 14/11/2017. 2. THE ASSESSEE HAS FILED REVISED GROUNDS ON 06/03/ 2018 SUBSTITUTING THE ORIGINAL GROUNDS. THE GROUNDS ARE AS UNDER: 1. THAT REASONABLE CAUSES WERE EXISTING FOR CASH LOANS , AND WELL EXPLAINED AS URGENT DEPOSITS INTO BANK ACCOUNTS WERE REQUIRED IN ORDER TO AVOID DECLINE OF CHEQUES GIVEN TO PARTIES, WHICH WOULD HAVE RESULTED FINANCIAL AND MO RAL INTEGRITY LOSS TO THE APPLICANT. 2. JCIT DID NOT INTERPRET CORRECTLY ,THE GIVEN ANSWER BY THE APPELLANT, TO REACH TO THE FINAL VERDICT, OTHERWISE WOULD HAVE GIVEN RELIEF U/S273B, AS COMPELLING EVIDENCES WERE PRODUCED. MOREOVER ORDER WAS NOT SERVED WITHIN THE TIME LIMITATION AS IT WAS TIME BARRED. 3. CASH LOAN TRANSACTIONS WERE ACCEPTED TO BE GENUINE BY THE ITO DURING SCRUTINY AND WERE DEPOSTED INTO BANKING CHANNEL. AS PER REFERENC E FROM ALLAHABAD HIGH COURT 24-08- 2015 IN CASE OF DIMPLE YADAV, CASH MONEY ROUTED THR OUGH THE BANKING CHANNEL FOR PAYMENT AS WELL AS CASH LOAN TRANSACTION BEING GENU INE, DOES NOT FIT FOR PENALTY U/S 271 D READ WITH 269SS, IS CLEAR GROUND FOR QUASHING OF TH IS PENALITY . ANNEXURE 4. 4. WHEN THE APPELLATE AGREED FOR ADDITION OF RS 1,70,0 00/- AS INCOME, SUBJECT TO NO PENAL ACTION UNDER INCOME TAX ACT, 2061, DURING SCRUTINY, TO BUY PEACE OF MIND. WHEN THE AGREED ADDITION AFTER SCRUTINY WAS DEPOSITED BY THE APPELL ANT, SUBJECT TO NO PENAL ACTION IN FUTURE. 5. SATISFACTION OF ITO DURING SCRUTINY U/S 143(1) , WHEREIN NO DOUBT WAS RAISED ON AUTHENTICITY OF LOANS HAVING ACCEPTED AFFIDAVITS FR OM LENDERS AS SUCH PROVING THE FACT THAT NEED BASED LOANS FROM CLOSE RELATIVES WERE GENUINE, AND ACCEPTED AS SUCH. 6. HONESTY SHOULD NOT BE PUNISHED IN SUCH WAY. 2 HONEST SUBMISSION OF THE APPELLANT HAVING TAKEN CAS H AS LOAN FROM HIS BLOOD RELATIVES, DURING THE SCRUTINY PROCESS ,WHEREAS BY TERMING THE SAID A MOUNTS AS GIFTS DURING SCRUTINY, COULD HAVE SAVED HIM OF ALL BOTHERATION. BUT ACTED HONEST LY BY PUTTING TRUE STATEMENTS AND SUBMISSIONS DURING SCRUTINY BY TERMING LOAN AS LOAN , SHOWS THAT APPELLANT HAVE STRONG BELIEF IN LAW OF LAND AND JUSTICE. AS OBJECTIONABLE CASH LOANS AND TIMELY HELP ARE DIF FERENT ASPECTS AND NEEDS PRACTICAL EVALUATION, LAW IN THIS REGARD SHOULD NOT BE APPLIE D BLINDLY BASED MERELY ON TERMINOLOGY RATHER ESSENCE OF LAW, MUST BE MAINTAINED, OTHERWIS E TIMELY HELP AMONG CLOSE RELATIVES, WOULD SUBJECT TO THIS KIND OF PUNISHMENT, IS VIOLAT ION OF PRINCIPLES OF NATURAL JUSTICE. HENCE IT IS PRAYED TO GIVE KIND CONSIDERATION TO THE APPEAL OF QUASH THE PENALTY ORDER. 3. THE MOOT ISSUE TO BE DECIDED IS THAT WHETHER PRO VISIONS OF SECTION 271D READ WITH 269 SS ARE ATTRACTED IN THE CASE OF THE ASSESS EE OR NOT. SECTION 271D READS AS UNDER: 271D. (1) IF A PERSON TAKES OR ACCEPTS ANY LOAN OR DEPOSIT OR SPECIFIED SUM IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS, HE SHALL BE LIA BLE TO PAY, BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT OF THE LOAN OR DEPOSIT OR SPECIFIED S UM SO TAKEN OR ACCEPTED. (2) ANY PENALTY IMPOSABLE UNDER SUB-SECTION (1) SHA LL BE IMPOSED BY THE JOINT COMMISSIONER. IN THE ABOVE SECTION, SPECIFIED SUM MEANS ANY SUM OF MONEY RECEIVABLE, WHETHER AS ADVANCE OR OTHERWISE, IN RELATION TO TRANSFER OF AN IMMOVABLE PROPERTY, WHETHER OR NOT THE TRANSFER TAKES PLACE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S RECEIVED LOANS DURING THE ASSESSMENT YEAR WHICH HAVE BEEN DULY EXAMINED BY TH E ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. SUBSEQUENTLY, THE CASH LOAN S FROM HIS SISTER, SISTER- IN -LAW, AND FROM FATHER-IN-LAW HAVE BEEN TREATED AS IN VIOLATIO N TO SECTION 269SS OF THE INCOME TAX ACT,1961, AND THE JCIT LEVIED PENALTY UNDER SECTION 271D. THE SAME HAS BEEN CONFIRMED BY THE LD. CIT(A) ON THE GROUNDS THAT THE ASSESSEE HAS NOT SUBMITTED IN ITS REPLY THAT NO URGENCY HAVE BEEN PROVED BY THE ASSES SEE AND NO VALID REASON FOR ACCEPTING THE LOAN IN CASH HAS BEEN DEMONSTRATED BY THE ASSESSEE. 5. DURING THE HEARING BEFORE US, THE ASSESSEE IN PE RSON ARGUED THAT THE AMOUNTS HAVE BEEN RECEIVED FROM THE SISTER OF RS. 3,00,000/ - ON 18/05/2010 AND THE SAID AMOUNT WAS DEPOSITED IN THE BANK ON THE SAME DATE FOR THE CLEARANCE OF CHEQUES ISSUED BY HIM IN FAVOUR OF TWO PERSONS NAMELY SHRI. SURINDER SINGH AND SHRI CHARANJEET SINGH. HE SUBMITTED THAT THE CHEQUES WERE RETURNED OWING TO L ACK OF BALANCE IN THE BANK ACCOUNT AND WERE CLEARED ONLY AFTER DEPOSITING OF T HE CASH RECEIVED FROM THE SISTER. THE PHOTOCOPY OF THE BANK STATEMENTS HAS BEEN FILED BEFORE US. 5.1 REGARDING THE AMOUNT OF RS. 2,00,000/- RECEIVED FROM THE SISTER- IN- LAW ON 11/06/2010 WAS DEPOSITED AS THE CHEQUES ISSUED TO ONE MR. RAJ KUMAR, AND TWO MR. ASHISH MITTAL NEEDS URGENT CLEARANCE. HE HAS FILED THE RELEVANT BANK STATEMENT DEPICTING THE CLEARANCE OF THE CHEQUES, POST DEPOSI T OF THE CASH. 3 5.2 FURTHER REGARDING THE CASH DEPOSIT OF RS. 1,50, 000/- RECEIVED FROM FATHER-IN-LAW ON 15/12/2010 AFTER BANKING HOURS WHICH WAS DEPOSIT ED IN THE BANK ON 16/12/2010 WHICH WERE USED FOR CLEARANCE OF CHEQUE ISSUED IN F AVOUR OF ONE MR. SUKHPAL SINGH. THE RELEVANT BANK STATEMENT HAS ALSO BEEN FILED BEFORE US. IT WAS ALSO ARGUED BEFORE US THAT THE AMOUNTS RECEIVED WERE ALSO RETURNED TO THE SIST ER, SISTER-IN-LAW, FATHER-IN-LAW IN THE SAME FINANCIAL YEAR. THE SOURCES OF THE LOANS WERE NOT IN DISPUTE. THE AMOUNTS WERE RECEIVED TO FULFILL THE COMMITMENTS OF HONORING THE CHEQUES ISSUED FOR A PROPERTY DEAL AND ALSO FOR ONLINE PURCHASE OF AIR TICKETS. 6. LD. DR RELIED ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE ASSESSEE HAD PROVED COG ENTLY WITH SUFFICIENT DOCUMENTARY EVIDENCES, THE REASONABLE CAUSE FOR RECEIPT OF CASH LOANS BASED ON THE REQUIREMENT, UTILIZATION AND CONDUCT OF THE ASSESSEE ON RECEIPT OF CASH AS LOANS WHICH WERE RECEIVED TO FULFILL THE URGENT REQUIREMENT OF THE A SSESSEE IN CLEARING THE CHEQUES WHICH HAVE BEEN ALREADY ISSUED AND TO PURCHASE AIR TICKET S. SECTION 273B CLEARLY EXPLAINS THAT NO PENALTY SHALL BE IMPOSABLE ON THE PERSON FOR ANY FAILURE REFERRED IN THE SECTION 271D IF HE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. 8. HENCE, THE LD. CIT(A)S OBSERVATION THAT THE ASS ESSEE HAS NOT SUBMITTED WHAT WAS THE URGENCY OF RECEIPT OF CASH LOANS AND NO REA SONABLE CAUSE WAS SHOWN CANNOT BE ACCEPTED IN VIEW OF THE CLEAR DOCUMENTARY EVIDEN CES AND FACTS PROVING REASONABLE CAUSE BEFORE US. IN VIEW OF THE ABOVE, T HE PENALTY LEVIED IS LIABLE TO BE DELETED. 9. AS A RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07/08/2018 AG COPY TO: 1. THE APPELLANT, 2.THE RESPONDENT, 3.THE CIT,4. TH E CIT(A), 5.THE DR