The ITO, Ward-3(1), JAMNAGAR V. Smt. Darshanaben Piyushbhai Vora, JAMNAGAR

ITA 471/RJT/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6699 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND N SONTAKKE
• Assessee Lawyers: ARVIND GOKANI
• Keywords: Gift; Retrospective amendment; Reasonable cause; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.471/RJT/14 (ASSESSMENT YEAR:2010-11) ITO, WARD-3(1), JAMNAGAR APPELLANT VS. SMT. DARSHANABEN PIYUSHBHAI VORA 303, ABHISHEK APARTMENT, B/H. DKV COLLEGE, DIST : JAMNAGAR RESPONDENT PAN: ABCPV4864G /BY REVENUE : SHRI ARVIND N. SONTAKKE, SR.D.R. /BY ASSESSEE : SHRI ARVIND GOKANI, A.R. /DATE OF HEARING : 16.02.2017 /DATE OF PRONOUNCEMENT : 27.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11 A RISES AGAINST THE CIT(A), JAMNAGAR DATED 21.05.2014, IN APPEAL NOS. C IT(A)/JAM/128 & 127/13-14/289, DELETING PENALTIES OF RS.7.10LACS EA CH AS IMPOSED BY THE ITA NO. 471/RJT/2014 (ITO VS. SMT. DARSHANABEN P. V ORA) A.Y. 2010-11 - 2 - ASSESSING OFFICER IN PROCEEDINGS U/S. 271D AND 271E OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES. CASE FILE PERUSED. 2. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTS ASSESSING OFFICERS ACTION IN IMPOSING THE IMPUGNED PENALTIES OF RS.7.1LAC EACH AS IMPOSED ON ACCOUNT OF AVAILING CASH LOANS AT ASSES SEES INSTANCE AS WELL AS ITS RE-PAYMENT BY INVOKING SECTION 271D AND 271E OF THE ACT. LEARNED AUTHORIZED REPRESENTATIVE DRAWS OUR ATTENTION TOWAR DS CBDT CIRCULAR NO. 21/2015 DATED 10.12.2015 PRESCRIBING MINIMUM LIMIT OF TAX EFFECT FOR FILING APPEAL BEFORE THIS TRIBUNAL TO BE OF RS.10LACS. HE THEN STATES THAT THE ASSESSING OFFICER HAD IMPOSED THE TWO IMPUGNED PENA LTIES IN QUESTION ON 26.09.2013 BY WAY OF SEPARATE ORDERS. THE ASSESSEE PREFERRED SEPARATE APPEALS BEFORE THE CIT(A). LEARNED CIT(A) THEREAFT ER DELETED THE TWO PENALTIES AFTER HOLDING THAT THE CASH LOAN IN QUEST ION WAS IN FACT A GIFT RECEIVED FROM ASSESSEES FATHER IN-LAW AS UNDER: 6.5 THE FACTS OF THIS CASE ARE ALSO ON THE-SIMILAR LINES. ASSESSEE IS A LIVING IN JOINT FAMILY WITH HIS FATHER IN LAW WHO HAS PASS ED AWAY. HER FATHER IN LAW HAS GIVEN A GIFT TO HER OF RS 7,10,000/- IN TWO INS TALLMENTS FROM CASH ON HAND AVAILABLE IN HIS BOOKS OF ACCOUNTS THE ENTRIES ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS WELL AS THE DONOR FA THER IN LAW AND BOTH ARE ASSESSED, TO TAX. BASED ON THESE FACTS THE GENUINEN ESS OF THE TRANSACTION IS ACCEPTED BY AO. AS THE GIFT WAS IN CASH .AND ITS RE PAYMENT WAS ALSO IN CASE PENALTY WAS LEVIED. FOR THE WHOLE TRANSACTION ASSES SEE AS WELL AS HER RELATIVES HAVE CONFIRMED THE TRANSACTION AND FACTS AND CIRCUMSTANCES, IN WHICH I THE ORIGINAL GIFT WAS RETURNED. THE ASSESSE E WAS ALSO UNDER THE BELIEF THAT GIFT ARE NOT LOAN AND DEPOSITS. DUE TO FAMILY DISPUTE THE GIFT WAS RETUNED BY THE APPELLANT WHICH WAS IN. FACT RETURNE D BY THE' APPELLANT AFTER ITA NO. 471/RJT/2014 (ITO VS. SMT. DARSHANABEN P. V ORA) A.Y. 2010-11 - 3 - WITHDRAWING MONEY FROM HER BANK ACCOUNT. THERE WERE CONFIRMING ENTRIES IN THE BOOKS OF THE ASSESSEE AS WELL AS SHRI NAGIND AS VORA THAT THIS AMOUNT AT THE TIME OF GIVING IT TO ASSESSEE WAS GIFT AND L ATER ON THE GIFT WAS RETURNED DUE TO FAMILY DISPUTES. AS THE AMOUNT OF GIFT WAS T O BE RETURNED IN A SHORT SPAN OF TIME BECAUSE OF CIRCUMSTANCES BEYOND THE CO NTROL OF THE ASSESSEE IT BECAME A SHORT TERM LOAN. THIS CONFIRMATION WAS GIV EN TO THE ASSESSING OFFICER. HENCE THE BELIEF OF THE APPELLANT THAT WHE N THE AMOUNT WAS ACCEPTED IN CASH IT WAS A GIFT FROM HER CLOSE RELATIVE I.E. FATHER IN LAW. AT THE TIME OF ACCEPTANCE IT WAS NOT AT ALL A LOAN OR DEPOSIT BUT A GIFT. ASSESSEE IS ALSO UNDER THE BELIEF THAT IN CASE OF GIFT FROM CLOSE RE LATIVE IT CAN BE ACCEPTED IN CASH AND THERE IS NO BAR ON THAT. BECAUSE OF UNUSUA L FAMILY DISPUTES THE AMOUNT OF GIFT WAS REQUIRED TO REPAID THEREFORE THE RE IS REASONABLE CAUSE OF THE REPAYMENT OF MONEY IN THIS CASE, IT WAS ALSO HE LD BY THE HON. GUJARAT HIGH COURT THAT IF TRANSACTION IS BETWEEN CLOSE FAM ILY RELATIVE THE PROVISION OF SECTION 269 S AND 269T DOES NOT APPLY. THEREFORE BASED ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND RATIO OF HON. GUJARA T HIGH COURT IN CASE OF CIT V NATWARLAL PAREKH 303 ITR 5 (GUJ) AND AS WELL AS HONOURABLE MADRAS HIGH COURT IN CIT V M YESHODHA 31 TAXMANN.COM 153, I AM OF THE OPINION THAT THIS TRANSACTION OF ACCEPTING GIFT WHICH WAS / TERMED AS SHORT TERM LOAN BY AO BETWEEN TWO CLOSE RELATIVES AND WHO ARE/ ASSE SSED TO TAX IS NOT HIT BY THE PROVISION OF SECTION 269SS AND 269 T OF THE ACT AS THE TRANSACTIONS ARE NOT OF LOAN A OR DEPOSIT AS ENVISAGED IN THOSE SECTIONS. FURTHER, EVEN OTHERWISE THERE IS A REASONABLE CAUSE FOR ENTERING IN TO THESE TRANSACTION IN CASH. THEREFORE IN THESE CIRCUMSTANCES PENALTY U/S 271D AND 271E CANNOT BE LEVIED. THEREFORE I HEREBY CANCEL THE PENALTY OF RS.7,10,000/- LEVIED U/S 271D FOR ACCEPTING THE AMOUNT IN CASH AS WELL AS RS 7,10,000/-U/S 271E FOR REPAYING, THE SAME AMOUNT IN CASH. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS. IT HAS ALREADY COME ON RECORD THAT THE ASSESSEE IS IN FACT A DONEE TO HAVE RECEIVED GIFT FROM HIS FATHER-IN-LAW QUA THE AMOUNT IN QUESTION WHICH WAS LATTER ON RETURN IN SHORT SPAN OF TIME. LEARNED DE PARTMENTAL REPRESENTATIVE FAILS TO REBUT THIS CRUCIAL FINDING. WE THUS SEE N O REASON TO INTERFERE WITH THE LEARNED CIT(A)S CONCLUSION UNDER CHALLENGE. WE FU RTHER FIND FORCE IN ASSESSEES CONTENTION THAT THIS REVENUES APPEAL IS NOT MAINTAINABLE IN CHALLENGING THE CIT(A)S ORDER DELETING THE TWO PEN ALTIES IN AS MANY SEPARATE APPEALS ARISING FROM ASSESSING OFFICERS DIFFERENT ORDERS. THAT BEING THE ITA NO. 471/RJT/2014 (ITO VS. SMT. DARSHANABEN P. V ORA) A.Y. 2010-11 - 4 - CASE, THIS REVENUES APPEAL IS VERY WELL HIT BY BOA RDS CIRCULAR (SUPRA) HAVING RETROSPECTIVE EFFECT ON PENDING APPEAL AS WE LL. WE THUS DISMISS THE INSTANT APPEAL ON MERITS AS WELL AS TO BE HAVING LO W TAX EFFECT THEN THAT PRESCRIBED. 4. THIS REVENUES APPEAL IS DISMISSED ACCORDINGLY. [PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 27/02/2017 TRUE COPY S.K.SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT