ITO, New Delhi V. M/s Victor Cable Industries Ltd., New Delhi

ITA 529/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53110 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: N O N E
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 529(DEL)/2011 ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, VICTOR CABLE INDUSTRIES LTD., WARD 17(2), NEW DELHI. VS. B1/30, SAFDAR JUNG ENCLAVE, NEW DELHI. PAN: AAACV0488L (APPELLANT) (RESPONDENT) APPELLANT BY : DR. B.R.R. KUMAR, SR.DR RESPONDENT BY : N ONE DATE OF HEA RING : 03.11.2011 DATE OF PRO NOUNCEMENT : 11.11.2011 ORDER PER K.G. BANSAL : AM THE REVENUE HAS TAKEN UP THREE GROUNDS IN THE A PPEAL TO THE EFFECT THAT THE LD. CIT(APPEALS) ERRED IN DELETING THE PENALTY OF RS. 4,40,350/- IMPOSED BY THE ASSESSING OFFICER U/S 271D READ WIT H SECTION 269SS OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT) IN RESP ECT OF DEPOSITS RECEIVED IN CASH. THE FACTS HAVE BEEN NARRATED BY THE AO I N PARAGRAPH NO. 3 OF HIS ORDER, WHICH SHOWS THAT A SUM OF RS. 4,40,350/- WAS DEPOSITED IN THE BANK ACCOUNT ON VARIOUS DATES. IT WAS SUBMITTED THAT THE DEPOSITS WERE MADE FROM CASH AVAILABLE IN THE BOOKS AS CASH-IN-HAN D. THIS EXPLANATION WAS ITA NO. 529(DEL)/2011 2 NOT ACCEPTED. THEREFORE, THE AMOUNT WAS ADDED TO THE TOTAL INCOME U/S 68 OF THE ACT. PENALTY PROCEEDINGS WERE ALSO INI TIATED U/S 271D READ WITH SECTION 269SS, WHICH PROHIBITS ACCEPTING ANY LO AN OR DEPOSIT EXCEEDING RS. 20,000/- OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. THE EXPLANATION OF THE ASSE SSEE WAS THAT THE AMOUNTS HAD BEEN DEPOSITED FROM CASH-ON-HAND AND, THEREF ORE, THERE IS NO QUESTION OF ANY LOAN OR DEPOSIT ACCEPTED BY THE ASSESSEE. THE AO DID NOT ACCEPT THE EXPLANATION AND IMPOSED PENALTY OF RS.4,40,350/ -. THE LD. CIT(APPEALS) DELETED THE PENALTY ON THE GROUND THAT THE AMOUNT HAS BEEN ADDED TO THE INCOME BY INVOKING THE PROVISION CONTAINED IN SE CTION 68. THEREFORE, IT CANNOT BE SAID THAT THE AMOUNT REPRESENTS LOAN OR DEPOSIT. 2. BEFORE US, THE LD. DR SUBMITTED THAT THE AO H AS PROCEEDED AGAINST THE ASSESSEE UNDER BOTH THE SECTIONS I.E., 68 AND 271D. SINCE THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THE DEPO SITS WERE FROM CASH-ON- HAND, THE PENALTY HAS BEEN RIGHTLY LEVIED. NON E ATTENDED ON BEHALF OF THE ASSESSEE. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT SMALL SMALL AMO UNTS WERE DEPOSITED IN BANK ITA NO. 529(DEL)/2011 3 AND ONLY TWO ENTRIES OF RS. 1.00 LAKH AND RS. 1 ,03,000/- EXCEEDED THE SUM OF RS. 20,000/-. NO CASE HAS BEEN MADE OUT THAT ALL THE AMOUNTS WERE BORROWED FROM A SINGLE PERSON SO THAT THE AGGR EGATE BORROWINGS FROM THE SAME PERSON EXCEED RS. 20,000/-. THE FINDING IN THE ASSESSMENT ORDER IS THAT THE CREDITS IN THE BANK ACCOUNT REPRESENT U NACCOUNTED MONEY OF THE ASSESSEE DEPOSITED IN THE BANK. ACCORDINGLY, THI S AMOUNT HAS BEEN TAXED. IN THE LIGHT OF THIS FINDING, THERE COULD HAVE BE EN NO QUESTION OF FURTHER ASSUMING THAT THE MONEY WAS ACCEPTED AS LOAN OR ADVANCE FROM ANY OTHER PERSON. THE LEVY OF PENALTY U/S 271D HAS TO BE BASED UPON THE FACTUAL FINDING THAT MONEY HAS BEEN ACCEPTED AS LOAN OR ADVANCE IN CASH FROM ANOTHER PERSON. NO SUCH FINDING HAS BEEN GI VEN IN THE ASSESSMENT ORDER. IN FACT, THE FINDING IS THAT THE MONEY BE LONGS TO THE ASSESSEE ITSELF. IN SUCH A SITUATION, THERE IS NO QUESTION OF LEVY OF PENALTY U/S 271D. 4. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER 11/11/2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. VICTOR CABLE INDUSTRIES LTD., NEW DELHI. 2. ITO, WARD 17(2), NEW DELHI. 3. CIT 4. CIT(A) ITA NO. 529(DEL)/2011 4 5. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.