DCIT, New Delhi V. M/s VIP Forex Pvt. Ltd., New Delhi

ITA 509/DEL/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3364 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-08-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SH.G.D.AGRAWAL, HON BLE PRESIDENT AND SH.K.N.CHARY, JUDICIAL MEMBER ITA NO. 509 / DEL/20 11 ( ASSESSMENT YEAR: 20 04 - 05 ) O O R D E ORDE R PER K.N. CHARY , JUDICIAL MEMBER AGGRIEVED BY THE ORDER DATED 12.11.2010 IN APPEAL NO. 79/2009 - 10 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XIX, NEW DELHI [IN SHORT HEREINAFTER CALLED AS THE CIT(A) ] , T HE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE DELETION OF THE PEN ALTY LEVIED UNDER SECTION 271D READ WITH SECTION 269SS, STATING THAT SUCH DELETION IS THE RESULT OF IGNORING THE DECISION OF HON BLE JHARKHAND HIGH COURT IN THE CASE OF M/S BHALOTIA ENGINEERING PRIVATE WORKS VS. CIT 275 ITR 279 WHEREUNDER THE SHARE DCIT CIRCLE 17(1), C.R. BUILDING NEW DELHI VS VIP FOREX PVT. LTD. 4/35, MAJESTIC PLACE, W.E.A., SARASWATI MARG, KAROL BAGH NEW DELHI PAN:AABCV6909M (APPELLANT) (RESPONDENT) DEPARTMENT BY SH. AMIT JAIN, SR. DR RESPONDENT BY SH. SUNIL ARORA & SH. AKASH CHUGH, CA DATE OF HEARING 16 . 11 .2017 DATE OF PRONOUNCEMENT 20 . 11 .2017 2 APPLICA TION MONEY WAS ALSO CONSIDERED AS PART TAKING THE CHARACTER AS DEPOSIT. 2. FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE THAT ON 16.6.2003 ONE MR. RAJESH THAKUR AND HIS BROTHER RAJENDRA THAKUR WERE FOUND PO SSESSING A CASH OF RS. 30,00,00 0/ - AND BASING O N SUCH FACT NOTICE UNDER SECTION 153(C) WAS ISSUED. SUCH MONEY OF RS. 30,00,000/ - WAS ADDED AS INCOME IN THE HANDS OF RAJENDRA THAKUR. HOWEVER, THE ASSESSEE CLAIMED THE SEIZED AMOUNT STATING THAT IT WAS GIVEN BY THEM AS ADVANCE TO RAJENDRA THAKUR FOR PURCHASE OF PROPERTY AT JALANDHAR. ON A CONSI DERATION OF A MATERIAL BEFORE HIM THE ASSESSING OFFICER ADDED THE SAID AMOUNT OF RS. 30,00,000/ - IN THE INCOME OF THE ASSESSEE AND SIMULTANEOUSLY INITIATED PENALTY PROCEEDINGS. DURING THE PENALTY PROCEEDINGS , ON BEING QUESTIONED , IT WAS REPLIED ON BEHALF OF THE ASSESSEE THAT THE AMOUNTS WERE RECEIVED BY WAY OF SHARE APPLICATION MONEY IN ADVANCE AND NOT LOAN OR DEPOSIT. BY WAY OF ORDER DATED 29.6.2009, THE ASSESSING OFFICER LEVIED A PENALTY OF RS. 30,00,000/ - UNDER SECTION 271D OF THE ACT. 3. IN APPEAL LEARNED CIT(A) DELETED THE SAME ON THE GROUND THAT THERE IS NO FINDING THAT THE AMOUNT OF RS. 30,00,000/ - WAS RECEIVED AS LOAN OR DEP OSIT IN CASH TO INVOKE THE PROVISION UNDER SECTI ON 269 SS READ WITH SECTION 271 D OF THE ACT. HENCE THE REVENUE IS IN APPEAL BEFORE US. 4. LEARNED DR PLACED A RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WHEREAS AT THE OUTSET IT IS THE ARGUMENT OF THE LEARNED AR THAT , IN THE APPEAL AGAINST THE QUANTUM ADDITION PREFERRED BY THE ASSESSEE , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , ON 3 EXAMINATION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE , REACHED A FINDING THAT THE AMOUNT OF RS. 30,00,000/ - WAS GIVEN BY THE ASSESSEE FOR PUR CHASE OF PROPERTY IN JALANDHAR . LD. CIT(A) ALSO CONSIDER ED THE OBSERVATIONS MADE BY THE LEARNED CIT(A) IN THE APPEAL PREFERRED BY SH. RAJESH KUMAR . AFTER THE CONSIDERING THE SAME, IN THE CASE ON HAND , LEARNED CIT(A) - 3 DELHI DELETED THE QUANTUM ADDITION. SECOND LIMB OF ARGUMENTS OF THE LEARNED COUNSEL IS THAT THE AO RELIED UPON THE DECISION OF JHARKHAND HIGH COURT IN THE CASE OF M/S BHALOTIA ENGINEERING WORKS PVT . LTD VS. CIT 275 ITR 279 . THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. I.P. INDIA PVT LTD. 2011 16 TAXMANN.COM 407 (DELHI) NOTED THE ABOVE DECISION BUT WHILE REFERRING TO THE DECISION REPORTED IN DIT (EXEMPTION) V. ACME EDUCATIONAL SOCIETY [2010] 326 ITR 146 IT WAS HELD THAT A LOAN GRANTS TEMPORARY USE OF MONEY, OR TEMPORARY ACCOMMODATION, AND THAT THE ESSENCE OF A DEPOSIT IS THAT THERE MUST BE A LIABILITY TO RETURN IT TO THE PARTY BY WHOM OR ON WHOSE BEHALF IT HAS BEEN MADE, ON FULFILLMENT OF CERTAIN CONDITIONS. WHILE PLACING RELIANCE ON THESE TWO DECI SIONS, VIZ., I.P. INDIA PVT LTD (SUPRA) AND ACME EDUCATIONAL SOCIETY (SUPRA), LEARNED AR PRAYED TO DISMISS THE APPEAL PREFERRED BY THE REVENUE. 4. HAVING HEARD THE ARGUMENTS ON THE EITHER SIDE, WE HAVE PERUSED THE MATERIALS AND PAPERS ON RECORD. LEARNED AO PLACED RELIANCE ON THE DECISION OF BHALOTIA ENGINEERING WORKS PVT. LTD. (SUPRA) TO CONCLUDE THAT THE SHARE APPLICATION MONEY PARTAKES THE CHARACTER OF DEPOSIT. HOWEVER, IN VIEW OF THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF I.P. I NDIA PVT. LTD. CASE AND WHILE RESPECTFULLY FOLLOWING THE SAME WE HOLD THAT THE RECEIPT OF 4 SHARE APPLICATION MONEY FOR ALLOTMENT OF SHARES CANNOT BE TREATED AS RECEIPT OF LOAN OR DEPOSIT AND AS A CONSEQUENCE THEREOF PROVISIONS UNDER SECTION 299SS AND SECTIO N 2741D HAVE NO APPLICATION TO THE FACTS OF THE CASE. WITH THIS VIEW OF THE MATTER, WE DO NOT FIND ANY ILLEGALITY OR IRREGULARITY IN THE CONCLUSION REAC H ED BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER AND THERE IS NO NEED TO INTERFERE WITH THE SAME . WE ACCO RDINGLY HOLD THAT THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERITS AND IS LIABLE TO BE DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20TH , 2017 . SD/ - SD/ - (G.D.AGRAWAL) (K.N.CHARY) PRESIDENT JUDICIAL MEMBER DATE: - 20 TH NOV , 2017 SH COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 16 .1 1 .2017 PS 2. DRAFT PLACED BEFORE AUTHOR 16 .1 1 .2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .1 1 .2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .1 1 .2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.