The Premier Medical Supplies & Stores, Kolkata V. A.C.I.T Cir - 11,kolkata, Kolkata

ITA 458/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100136 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASHISH ROY J
• Assessee Lawyers: SANJIB KR DAS SHARMA
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 458 / KOL / 2013 ASSESSMENT YEAR :2000-01 THE PREMIER MEDICAL SUPPLIES & STORES, PROP. PREMIER DISTRIBUTORS (CAL) PVT. LTD. MERCANTILE BUILDINGS, 9, LALBAZAR STREET, B BLOCK, KOLKATA 700 001 [ PAN NO. AABCT 0594 L ] V/S . ACIT, CIRCLE-11, AAYAKAR BHAVAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SANJIB KR. DAS SHARMA, AR /BY RESPONDENT SHRI DEBASHISH ROY, JCIT-DR /DATE OF HEARING 10-11-2015 /DATE OF PRONOUNCEMENT 27-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA IN APPEAL NO.443/ XI/CIR-11/09-10 DATED 21.12.2012. ASSESSMENT WAS FRAMED BY ACIT, CI RCLE-11, KOLKATA U/S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2005 FOR ASSESSMENT YEAR 2000-01. PENALTY WAS LEVIED BY THE ADDL. COMMISSIONER OF INCOME-TAX U/S 271D OF TH E ACT VIDE HIS ORDER DATED 30.08.2006. ITA NO.458/KOL/2013 A.Y. 2000-01 THE PREMIER MEDICAL SUPPLIES & STORES V. ACIT, CI R-11, KOL. PAGE 2 2. ONLY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOSED BY ASSESSING OFFICER U/S 271D OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE-COMPANY H AS TAKEN A LOAN FROM SMT.LAXMI PARUI FOR AN AMOUNT OF RS.60,000/- IN CAS H AND THIS TRANSACTION ACCEPTING THE LOAN IN CASH IS AGAINST THE PROVISION OF SEC. 269SS OF THE ACT. THE AO WHILE FRAMING THE ASSESSMENT HAS INITIATED T HE PENALTY PROCEEDINGS U/S. 271D OF THE ACT WHICH WAS SUBSEQUENTLY CONFIRM ED VIDE ORDER DATED 30.08.2006 FOR LEVYING THE PENALTY OF 60,000/-. HOWEVER THE ASSESSEE HAS DEMONSTRATED THAT PERSON WHO HAD GIVEN THE LOAN HAV E NO BANK ACCOUNT AND THERE WAS AN URGENT NEED OF MONEY TO MEET THE BUSIN ESS REQUIREMENT OF ASSESSEE. ASSESSEE ALSO EXPLAINED THAT THE PARTY GO T THE FUND OF 60,000/- BY ENCASHMENT OF NSC. HOWEVER, THE AO HAS DISREGARDED THE CLAIM OF ASSESSEE STATING THAT THE INTENTION OF THE LAW IS TO SEE THA T THE MONEY HAS BEEN ACCEPTED IN CASH OR NOT. IN THE INSTANT CASE, ASSES SEE TOOK THE LOAN IN CASH AND AO ALSO FOUND NO DIRECT EVIDENCE THAT LOAN MONE Y WAS RECEIVED BY THE ASSESSEE OUT OF NSC ENCASHMENT. IN VIEW OF THE ABOV E, THE PENALTY WAS CONFIRMED U/S 271D OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF AO BY OB SERVING AS UNDER:- 3. I HAVE CONSIDERED THE FINDING OF THE A.O IN HIS ORDER DT. 30.06.2008 AND THE WRITTEN SUBMISSION MADE BY THE AR DURING THE APPELLATE PROC EEDINGS. APPEAL ON GROUND NO. 1 IS AGAINST THE IMPOSITION OF PENALTY OF RS.60000/ - U/S 271D OF THE IT ACT 1961. THE FACT OF THE CASE IS THAT THE ASSESSEE COMPANY TOOK LOAN FROM ONE SMT. LAXMI PARUI OF RS.60,000/- IN CASH. THE AO DETECTED THIS FACT DURI NG THE ASSESSMENT PROCEEDING AND AS HE WAS NOT SATISFIED WITH THE EXPLANATION OF FERED BY THE ASSESSEE HE INITIATED THE PENALTY PROCEEDING. DURING THE PENALTY PROCEEDI NG THE AR SUBMITTED THAT THE PERSON FROM WHO LOAN WAS TAKEN HAD NO BANK ACCOUNT. IT WAS FURTHER SUBMITTED THAT THE LOAN WAS TAKEN IN CASH AS THE ASSESSEE COMPANY REQUIRED THE MONEY URGENTLY FOR ITS BUSINESS PURPOSES. DURING THE PENALTY PROCE EDING BEFORE THE ADDL. CIT, ALTHOUGH THE AR HAD SUBMITTED THAT THE MONEY WAS RE QUIRED VERY URGENTLY BUT NO SUCH URGENCY WAS BROUGHT TO THE NOTICE OF THE ADDL. CIT, RANGE-II, KOLKATA. FURTHER, IT WAS POINTED OUT BEFORE THE ADDL. CIT, RANGE-II, KOL KATA THAT THE MONEY WITH THE LADY WAS THAT WHICH SHE HAD RECEIVED AS ENCASHMENT OF HE R NSC. THE ADDL CIT HAS GIVEN THE FINDING THAT SINCE THE LADY DID NOT HAVE ANY BA NK ACCOUNT SO IT COULD NOT BE PROVED BEYOND DOUBT NOR THERE WAS ANY EVIDENCE THAT THE MONEY MRS. LAXI PARUI HAD GIVEN AS LOAN WAS OF NSC ENCASHMENT. THEREFORE, THE ADDL. CIT, RANGE-II, KOLKATA LEVIED PENALTY OF RS.60,000/- U/S. 271D OF THE I.T. ACT, 961. DURING THE APPELLATE PROCEEDING THE AR SUBMITTED THE SAME SET OF FACTS T HAT HE HAD SUBMITTED BEFORE THE ADDL. CIT, RANGE-II, KOLKATA. THE AR ALSO RELIED ON THE HON'BLE ANDRA PRADESH HIGH COURTS ORDER IN THE CASE OF NATIONAL SURGICAL CORP . VS. CIT [42 ITR 1667) (AP). IN MY ITA NO.458/KOL/2013 A.Y. 2000-01 THE PREMIER MEDICAL SUPPLIES & STORES V. ACIT, CI R-11, KOL. PAGE 3 OPINION THE RATIO DECIDED BY THE HON'BLE HIGH COURT IN THIS CASE IS NOT APPLICABLE HERE. ALTHOUGH THE AR HAS SUBMITTED THAT THE MONEY WAS URGENTLY REQUIRED FOR THE BUSINESS BUT NEITHER BEFORE THE ADDL. CIT, RANGE-II , KOLKATA NOR BEFORE ME DURING THE APPELLATE PROCEEDING. THE AR COULD BRING ANYTHING O N RECORD SHOWING THE NATURE OF URGENCY OF THE BUSINESS. BY SIMPLY SAYING THAT MONE Y WAS URGENTLY REQUIRED FOR THE BUSINESS IS NOT SUFFICIENT WITHOUT BRINGING ANYTHIN G IN SUPPORT OF THIS ARGUMENT SHOWING URGENCY FOR THE SAME. HENCE, ASSESSEES ARG UMENT OF THIS URGENCY ELEMENT IS NOT ACCEPTABLE, THUS, ASSESSEES APPEAL ON GROUN D NO. 1 IS DISMISSED. AGGRIEVED, ASSESSEE PREFERRED SECOND APPEAL BEFORE US ON THE FOLLOWING GROUND OF APPEAL:- 1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOSED BY T HE LD. AO U/S 271D 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN NOT ACCEPTING AND NOT APPRECIATING THE FAC TS OF THE INSTANT CASE AND FAILED TO GIVE CREDENCE TO THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM. SHRI SANJIB KR. DASSARMA, LD. AUTHORIZED REPRESENTA TIVE APPEARING ON BEHALF OF ASSESSEE AND SHRI DEBASHISH ROY, LD. DEPARTMENTA L REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 4. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW. BEFORE US LD. AR SUBMITTED THAT THERE WAS URGENT NE ED OF FUND IN ITS DAY-TO- DAY WORKING OF BUSINESS AND THE PARTY FROM WHOM THE LOAN WAS ACCEPTED IN CASH HAD NO BANK ACCOUNT. THEREFORE, THERE WAS NO O PTION AVAILABLE TO THE ASSESSEE EXCEPT TO TAKE LOAN IN CASH. FINALLY, LD. AR PRAYED TO DROP THE PENALTY PROCEEDINGS IMPOSED BY AO AND CONFIRMED BY LD. CIT(A). FROM THE ABOVE DISCUSSION, WE FIND THAT ASSESSEE TOOK A LOAN OF 60,000/- AND THERE IS A CLEAR-CUT VIOLATION OF PROVISIONS OF SEC. 269SS O F THE ACT. HOWEVER, WE FIND THE PURPOSE OF LEGISLATURE TO INCORPORATE THE PROVI SIONS OF SEC.269SS UNDER THE ACT THAT THE REVENUE HAD FACED GENUINE DIFFICUL TY IN BRINGING TO THE TAX NET UNACCOUNTED CASH FOUND IN THE COURSE OF SEARCHES CA RRIED OUT AS IT IS INVARIABLY EXPLAINED BY THE TAXPAYERS AS REPRESENTI NG LOANS TAKEN FROM OR DEPOSITS MADE BY VARIOUS PERSONS. UNACCOUNTED INCOM E IS ALSO BROUGHT INTO ITA NO.458/KOL/2013 A.Y. 2000-01 THE PREMIER MEDICAL SUPPLIES & STORES V. ACIT, CI R-11, KOL. PAGE 4 THE BOOKS OF ACCOUNTS IN THE FORM OF SUCH LOANS OR DEPOSITS, AND TAXPAYERS ARE ALSO ABLE TO GET CONFIRMATORY LETTERS FROM SUCH PER SONS IN SUPPORT OF THEIR EXPLANATION. IN ORDER TO COUNTER THIS DEVICE, THIS PROHIBITION WAS SOUGHT TO BE INTRODUCED. NOW IN THE INSTANT CASE WE FIND FROM THE ORDERS OF AUTHORITIES BELOW THAT NONE OF THE AUTHORITIES BELOW HAS QUESTIONED/DOUBTED ABO UT THE SOURCES OF FUND AND IN THIS CASE, THE PARTY CLAIMED TO HAVE PAID TH IS LOAN AMOUNT OUT OF THE ENCASHMENT OF NSC. THE ORDERS OF AUTHORITIES BELOW DO NOT SPEAK ANYTHING ADVERSE ABOUT THE ENCASHMENT OF NSC. THEREFORE, WE ARE IN THE OPINION THAT THE SOURCE OF LOAN TAKEN BY ASSESSEE IS FROM THE GE NUINE SOURCE. IN VIEW OF THE ABOVE, WE ARE INCLINED TO DELETE THE PENALTY IM POSED BY AO AND CONFIRMED BY LD. CIT(A). 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 27/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 27 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-THE PREMIER MEDICAL SUPPLIES & STORES, M ERCANTILE BUILDINGS, 9, LALBAZAR STR EET, BBLOCK, KOLKATA-700 001 2. /RESPONDENT- ACIT, CIRCLE-11, AAYAKAR BHAVAN, P-7, CHOWRINGHEE SQ. KOL-69 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,