DCIT, Circle-3(2), New Delhi V. Trans Asia Packaging Ltd.(Amalgamated with M/s Asian Consolidated Inds.Ltd), Rewari

ITA 4557/DEL/2017

AI Insights

The case involves appeals by the Revenue against the CIT(A)'s decision which had deleted penalties imposed on Trans Asia Packaging Ltd. (TAPL) for alleged violations under Sections 269SS and 269T of the Income Tax Act, 1961, concerning the assessment year 1993-94. TAPL, which had been amalgamated with Asian Consolidated Industries Ltd. (ACIL) and ceased to exist as a separate entity, was accused of receiving loans and deposits in contravention of Section 269SS. The CIT(A) found that the transactions in question were between two units of a single entity and thus not in violation of the said section. The Tribunal agreed with the CIT(A)'s reasoning and dismissed the Revenue's appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121687 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-03-2023
• Assessment Year: 1993-1994
• Appeal Filed On: 09-07-2017
• Other Referred Cases: CIT vs. Indus Surveyors and Loss Assessors Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.As. No.4552 & 4557/DEL/2017 Assessment Years 1993-94 DCIT Circle-3(2) New Delhi v. Trans Asia Packaging Ltd. (Amalgamation with M/s. Asian Consolidated Inds. Ltd.) Rewari TAN/PAN: AAACA5887A (Appellant) (Respondent) Appellant by: None Respondent by: Ms. Meenakshi Dohre, Sr.DR Date of hearing: 28 03 2023 Date of pronouncement: 23 05 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he ca pt i o n e d a pp e a l s h a v e be e n f i l e d by t he R e v e nue a g a i n st t he or d e r s o f t he Co mm i s si on e r o f I n co me T a x (A pp eal s) - I, N e w D el h i (‘ CI T (A ) ’ i n sh o r t ) b ot h da te d 07 . 04. 2 01 7 a r is i n g fr o m t h e pe n a l ty o rd er b ot h d at e d 29 . 09. 2 01 6 p as s ed b y t he Ass es s i n g O ffi c e r (A O ) und er S e c t i o ns 2 71 E a nd 27 1 D o f t h e I nc o m e T a x A c t , 19 6 1 (t h e A c t) co nc e r ni n g A sses s me n t Y e ar s (A Y s) 1 993 -9 4. 2. T he a p pe a l h a v e b e e n fi l e d b y th e R e v en u e ag a i n st t h e re ve r sa l o f p e n a l t y o f R s. 87 , 6 7, 56 2 / - i mp os e d un d e r S ec t i on 2 7 1 D o f t h e A c t by t h e A ss es si ng O f fi c er . T he A ss e s si n g O f fi c er i n t he c o u r se o f a ss es s m e n t p r oc e e d i n gs for A sse ss m en t Y e a r 1 9 9 3- 94 i n q u e s t i o n ob s er ve d t ha t t he a sse ss e e h a s r ec e i ve d c e r t a i n l oans an d de po sit s i n c on t r a v e n t i on o f t h e pr ov i s i o n o f S e c t i o n 2 69 S S o f t h e A ct I.T.A No.4552 & 4557/Del/2017 2 a gg r e g a t i ng t o R s . 87, 6 7, 56 2/ -. T he a ss e s se e ha s c hal l e n g e d t he a ct i o n o f t he A s s e ssi n g O f fi c e r b e f o re t h e C I T( A ) an d c o n t e n d e d t ha t t he r e i s no v i o l a t i on o f S e c t i on 2 6 9 SS o f t h e A ct a s w ro n g l y a ll e g e d i n t h e p e na l t y o rd e r . I t w a s s ub mi t te d b e f or e t he C IT (A ) t h a t M /s . T ra ns A si a P a ck a gi ng L t d . ( TA P L ) w a s a m a l g a m a te d w i t h A si a Co n s ol i da t e d In du st r ie s L t d. ( A CI L ) w . e. f. 01 . 04. 1 99 2 a n d ha d be c o m e u ni t o f t h e a ss es s e e -c o m pa ny . Co n se qu e n t t o a m a l g a ma t io n TA P L l os t it s i d e n t i t y a n d c e a se d t o e xi s t by v i r tue o f o r d e r o f t h e H on’ bl e P u n j a b & H ar ya na H i gh Co u rt . T A P L i s t hu s ca n n o t b e c on si de r e d as se p a r a t e e n t i t y a s c o n t e mp la t e d un de r S e c t i o n 2 6 9S S o f t h e A ct a n d c o n seq ue nt l y t he t r a n s a c t io n b e t w e e n T A P L an d t he a ma l g a ma t ed a sse s se e c o m pa ny c a n a t m os t be c o n si d er e d a s t ra ns a c t i o n be t w e e n t w o u ni t s o f a s i ng l e en ti t y and n o t t r a n sa c t i o n w it h tw o di st i n ct u n it s. 3. C o ns i d e r i n g t he p e cu l i a r fa c t u a l m a t r i x in t h e pre s en t c a s e , t he CI T ( A ) fo u n d m er it i n th e p l ea o f t he a s se ss e e t ow ar d s l a c k o f i n fr i n g e me n t o f Se c t i o n 26 9 S S a n d th us d e l et e d t he p e n a l t y i mp o se d by t he A s se ss in g O ff ic e r. T he r el e v a nt op er at i ve para gr a p h o f t h e or d e r o f t h e C IT (A ) i s r ep ro d uc e d h e r e un de r : “ I h av e c o ns i de r e d t he s u b m i s s i o n of t h e ap pe l l a nt a nd o bs e r v a t i on o f t h e A d d l . C I T m a d e i n t he pe n al t y o r d e r . I h av e al s o g o ne t h r o u g h t he c o pi e s of a c c ou nt s s u b m it t e d b y t h e a ppe l l a n t b e f o r e t h e A O a s w e l l a s b e f or e m e . It i s s e e n t h a t t hi s is a r u nn i n g a n d c u r r e n t ac c o u n t w i t h M / s . A s i a n C o ns o l i da t e d I n du s tr i e s L t d. O n g o in g t h r o ug h t h e ac c o un t s , i t i s s e e n t h a t t h e r e is a d e bi t b al a nc e i n t h e n am e o f A C I L i n t h e b oo k s of TA P L o f Rs . 2, 3 1, 59 , 40 9 / - A g ai n s t t he s a i d de b i t b a l an c e , a n a m o un t o f R s . 1, 00 , 00 0 / - w a s r e c e i v e d b y t he a pp e l l an t i n l i e u o f t h e de b i t ba l an c e on 0 7 . 04 . 1 9 92 . S i m i l a r l y , o n 0 9 . 04 . 19 9 2, t he a m o un t o f R s . 10 , 00 0 / - w a s r e c e i v e d i n c a s h in l i e u o f t he s a l e s m a d e an d a g ain s t t he d e bi t b a la n c e . Th e tr an s a c ti o n r e c o r d e d o n 0 2 . 0 5 . 1 9 9 2 o f R s . 20 , 00 0 / - a n d o n 0 5. 0 5. 1 9 92 o f R s . 3 0 , 0 0 0/ - w i th M / s A s i a n C o ns o l i d a t e d I n d u s t r i e s Lt d . ar e a g ai n s t t he s a l e s m a d e a nd pa y me n t a g ai n s t t he d e bi t b al a nc e . Th e a m ou nt r e c e i v e d o n 0 7. 05 . 19 9 2 t o t h e ap p e l l a nt i s a ga i ns t t h e e x p e ns e s o f R s . 1, 0 0, 0 0 0/ - . S i m i l a r ly , t h e a m o u nt I.T.A No.4552 & 4557/Del/2017 3 r e c e i v e d o n 0 3. 0 6 . 19 92 of R s . 2 0, 0 0 0/ - a nd R s . 5 , 00 0/- a n d o n 0 7 . 0 7 . 1 9 9 2 o f R s . 1 , 50 , 0 0 0 / - a r e a g a i n s t t h e de b i t ba l an c e s . A l l t he p a y m e nt s ha v e b e e n r e c e i v e d ag a i ns t t he de b i t b al a nc e s a n d s a l e s m ad e t o M / s A s i a n C o ns ol i d at e d I n du s t r i e s L t d. S i m il a r l y , t he a m o un t t r a n s f e r r e d o n 26 . 0 3 . 1 9 9 3 o f R s . 1, 7 5 , 0 0 0/ - i s ag a i n s t t he e a r l i e r d e bi t b a l a nc e t o t he a pp e l l an t o n a c c o u nt of s a le s m a de . T he r e i s n o r e c e i p t o f l oa n o r d e p o s i t s . It i s a l s o s e e n t h a t th e r e i s n o t r a n s a c t i o n b e t w e e n th e a p p e ll a n t c o m p an y an d M /s A s i an C o ns o l i da t e d In du s t r i e s Lt d . o f R s . 5 2 , 4 9 , 9 2 0/ - w hi ch A O ha s c o ns i de r e d a s l oa n r e c e iv e d b y t he a pp e l l an t f r om As i a n C o ns o l i da t e d I n d u s t r i e s L t d . i n v i ol a t i o n of S e c t i on 2 69 SS o f t he A c t . T he a p pe l l a n t h as n o t d on e s u c h t r a n s a c ti o n w it h M /s A s i a n C o ns o l i da t e d In d u s t r i e s Lt d. i n f a c t i t w a s a t r a n sa c t i o n b e t w e e n M / s A s i a n C o ns o l i da t e d I n du s t r i e s L td a n d M / s A s i an C l o s u r e s L t d . b y w a y o f j o ur n a l v ou c he r e n t r y . Th e A dd l . C I T h as w r o n gl y t r e a t e d t h i s t r an s a c t i on be t w e e n t he a p p e l l an t c o m pa n y an d M / s A s ia n C o ns o l i d a t e d I nd u s t r i e s Lt d . S i m i l ar l y , t h e lo a n of R s . 4 4 , 6 5 0 / - an d R s . 3 2 , 9 9 2/ - al l e ge d t o ha v e b e e n r ec e i v e d f r o m M / s B a bb a r In du s t r i a l Tr a di n g C o r p o r a t i on w e r e i n fac t e nt e r e d i n t o be t w e e n t he A s i a n C o n s ol i d at e d I nd u s t r i e s Lt d . a n d M s A s i a n C l os ur e s Lt d . a n d n o t w i th t h e a pp e l l an t c o m p an y . It i s al s o s e e n t h at A O w h i l e p a s s i n g t he o r de r h as t r e a t e d o ne t r ans a c t i on of R s . 1 , 7 5 , 0 0 0/ - as R s . 1 7, 5 0, 0 0 0/ - w h i c h is a f a c t u a l e r r o r . I n v i e w o f t he a bo v e f a c t s , i t i s h e l d t h at t r a ns act i on s b e tw e e n M / s T r an s A s i a P a c k a g i n g Lt d . a n d M/ s A s i a n C o n s ol i d at ed I nd u s t r i e s L t d . w e r e t h e t r an s a c ti o n s w it h t w o u ni t s o f s i n gl e e n t i ty a s M / s T r an s A s i a P a c k a g i n g Lt d . l o s t i t s i d e n t i t y a nd c e as e d t o e x i s t w . e . f . 0 1. 0 4 . 1 9 92 a s t h e s a id e n t it y h a s a m al g a m at ed w i t h M s A s ia n C o n s o l i da t e d In du s t r i e s Lt d . i n v i e w of or de r o f H o n' bl e P u n j a b & H a r y an a H i g h C o u r t , t h e r e f or e , t h e t r a ns act i o ns c an n ot b e c on s i d e r e d a s l oa n o r d e po s i t w i t h t w o di f f e r e n t e n t i t ie s . I n t h i s r e g a r d , t he r a t io o f t h e H o n 'bl e D e l hi H i gh C o ur t de c i s i o n i n t he c a s e of C I T V s . I nd u S u r v e y or s a n d Lo s s A s s e s s o r s Pv t . L t d. i s s qu a r e l y a p p l i c ab l e i n th e c a s e of a p pe l l a n t . E v e n o t he r w i s e , a s di s c u s s e d a b o v e , t h e t r a ns ac t i o ns e nt e r e d i n t o b e t w e e n T r a n s A s i a P a c k ag i n g Lt d . w it h M / s A s i an C on s o l id a t e d I n d u s t r i e s Lt d . ar e i n th e na t u r e of r e c e i pt o f p a ym e nt s a g ai n s t t he s al e s a nd d e bi t ba l a nc e s . T he s e r e c e i p t s of m on e y ar e i n t he n at u r e o f c u r r e n t ac c o u nt a nd s am e c a n n ot b e h e l d t o b e a s l o an o r d e po s i t a s c o nt e m p l a t e d us 26 9 S S an d 26 9T of t h e A ct . T he r e c e i p t o f p a y m e n t s b e t w e e n M / s Tr an s A s i a P ac ka gi n g L t d . a n d M / s A s i an C o n s o l i da t e d In du s t r i e s Lt d . w e r e i n t he n a t ur e of c u r r e n t ac c o u n t tr a n s a c t io n s a s t h e r e w a s n o r e c e i pt o f l oa n o r d e po s i t . H e nc e , s uc h t r a ns a c t i o n s c a n n o t be t r e at e d as r e c e ipt of l o an or d e p o s i t s . A c c o r d i ng l y , t h e p e na l t y l e v i e d by A dd l . C I T u / s 2 7 1 D o f R s . 8 7 , 67 , 56 2 /- i s d e l e t e d . I.T.A No.4552 & 4557/Del/2017 4 7 . G r ou n d N o s . 9 a n d 1 0 a r e g e ne r a l i n n at u r e , t h e re f or e , n o s pe c i f i c , ad j ud i c a t i o n i s r e qu i r e d on t he s e gr o u nd s. 8 . I n t h e r e s u l t , ap pe a l i s a l lo w e d. ” 4. A g gri e v e d by t he r e l i e f g r a nt ed b y t h e CI T ( A ), the R e v e n ue i s i n a p pe a l b e f o r e t h e T ri bu na l. 5. W h e n t h e m a t t e r w a s c a l le d fo r he a r i n g , no ne ap pe ar e d f or t h e a ss es se e . Th e ma tt e r w a s a cc or d i n g l y p ro c e e de d e x - pa rt e. 6. T he l d. S r. D R for t h e R e v e n u e re l ie d u po n th e p en a lt y o r d e r . 7. W e h a v e pe ru se d t h e pe na l t y o rd e r p a sse d un de r Se c t i on 27 1D a nd t he fi r st ap pe l la t e o r de r t he r e o n an d p e r u s ed th e c a se r e c o r d s w it h t he a s si st a n ce o f t h e l d . S r. D R fo r t h e Re v e nue . T h e i n fr i n g e me n t o f p r ov i si o n o f S e ct i o n 2 69 S S an d e ns ui n g p e n a l t y un d e r S e c t i on 2 71 D i s i n q u e st i o n. 8. O n p e r u sa l o f t he ca s e r e c o r d s, i t a p pe a r s th at t h e as se sse e - c o mp a ny T A PL w a s a li m i t e d c o m p a n y e ng a g e d i n ma n u fa c t u r i n g o f t in c o nt ai ne r s a n d ca n s e t c. B y vi rt ue o f o rd e r o f H o n ’b l e P un j a b a nd H a r ya na H i g h C ou r t , t he a s se s see c o m pa ny w a s mer g e d / a ma l g a ma t ed w i th A sia n C on so l i d a te d C o m p a n y L t d. w .e . f. 01 . 0 4. 1 9 9 2 a nd f r o m t ha t da t e , b e c a m e u n i t o f a ma l ga m a t e d c o mp a ny, i. e . , A si a n Co ns ol i d a t e d I nd u st ri es L t d . A l iq ui da t i o n pe t it i o n i n t he c as e o f a ma l g a ma t e d c o m pa ny , i. e . , A CI L w a s fi l e d by c e r t ai n c re di t o rs a nd an o rd e r w a s pa s se d by t he H o n ’ b le P un j a b a nd H a r ya n a H i g h C o u r t f or w i nd in g o f t he c o m p a ny and a l iq ui da t o r w as a p p o in te d w . e. f. 07 . 0 1. 1 99 9 . In t h i s b a c k d ro p, t he CI T ( A ) f o un d t h a t t h e t r an sa ct i o n be t w ee n t h e T A P L an d A C I L ha s t o be r e g ar de d a s t ra n sa c t io n b e t w e en t w o u n i t s o f t he sa me c o mp a ny du e t o m e r ge r a n d t h us t ra n sa c t io ns b e tw e e n th e t w o I.T.A No.4552 & 4557/Del/2017 5 c o mp a ni es a r e o ut o f a m bi t o f S ec t i o n 26 9 S S of t he A c t an d h e n c e no p e na lt y c a n b e i mp os e d u n de r S e c t i o n 27 1D o f t h e A c t . 9. W i t h o ut a ny f u rt h e r d e l i n e a ti o n, w e fi n d th a t t he fi n d in gs gi v e n b y t he C I T ( A ) w hi le de l e t i ng t h e pe na l t y w i t hs t a nd t he t e s t o f re a so ns a n d d oe s n ot c al l fo r a n y mo d i fi c a t i o n o r int e r fe r en c e . Th us, w e se e no m e ri t in t h e c a se o f t he R e v e nu e . 10 . I n t h e re s ul t , th e a p p e a l o f th e R e v e n u e i s di smi ss e d e x -p a rt e. 11 . F o r t h e si mi l a r re a so n s, p e na l t y i m p o sed un d er S e c t i on 2 7 1 E fo r de fa ul t t o w ar ds r ep ay me nt i n t e r ms o f S e ct i o n 269 T o f t h e A c t i s a ls o w i th ou t m e ri t i n t h e li gh t o f t he re a s on in g p rov i de d b y t he CI T ( A ). We t h us se e n o m e r i t i n i mp os i t i o n o f pe na lty u nd er S ec t i o n 27 1 E o f t h e A c t fo r s i m i l ar re a s on s a s c ha ll e n g e d in I T A N o. 45 5 2/ D e l /2 01 7 A sse s s me nt Y e a r 19 93 - 94 . We t h u s de cl i ne t o i nt er fe r e w i th t h e o rd e r o f t h e CI T( A ). 12 . I n t h e re s ul t , th e a p p e a l o f th e R e v e n u e i s di smi ss e d e x -p a rt e. 13 . I n t he r e s ul t , b ot h t he ca p t i on ed a p p ea l s o f t he R e v e n u e a r e di s m i ss e d e x - p a rt e. Order pronounced in the open Court on 23/05/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /05/2023 Prabhat