M.Usha, CHENNAI V. JCIT, Pondicherry

ITA 549/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96447 (ITAT-CHENNAI)
• Duration Of Justice: 1 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: D
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR SH A S SRIRAMAN
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.549, 550, 551, 552, 553, 554, 555, 556, 557 & 558/MDS/2014 ( )( / ASSESSMENT YEARS : 2004-05 TO 2007-08 SMT. M. USHA, NO.263 & 265, J.N. STREET, PONDICHERRY 605 001. PAN : ADHPU 4793 L V. THE JOINT COMMISSIONER OF INCOME TAX, PONDICHERRY RANGE, PONDICHERRY. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH S. SRIDHAR, ADVOCATE SH. A.S. SRIRAMAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 1 / 2% / DATE OF HEARING : 05.11.2015 3') / 2% / DATE OF PRONOUNCEMENT : 27.11.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX 2 I.T.A. NOS.549 TO 558/MDS/14 (APPEALS)VI, CHENNAI, DATED 29.01.2014. SINCE COM MON ISSUE ARISES FOR CONSIDERATION IN ALL THESE APPEALS, WE H EARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS A SURVEY IN THE PREMISES OF ONE SHRI A. KANNAN, PROPRIETOR, VADAMALAYAN FINANCE, PONDICHERRY, ON 08 .09.2011. DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOUND THAT THE LOAN DEBTORS ARE ENTERED IN THE REGI STER CALLED KISTHI VASOOL LIST BOOK. ON THE BASIS OF KISTHI VASOOL L IST BOOK, THE ASSESSING OFFICER FOUND THAT THERE WAS A MENTION AB OUT USHA AMMAL FOR RECEIPT OF CASH EXCEEDING ` 20,000/- TO THE EXTENT OF ` 20,00,000/-. ACCORDING TO THE LD. COUNSEL, THE ASS ESSEE HAS NOT RECEIVED ANY MONEY FROM SHRI A. KANNAN OR M/S VADAM ALAYAN FINANCE. THE ASSESSING OFFICER INITIATED PROCEEDIN GS FOR LEVY OF PENALTY UNDER SECTIONS 271D AND 271E OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') FOR SO-CALLED RECEIPT OF LOAN IN CASH AND REPAYMENT OF LOAN IN CASH EXCEEDING ` 20,000/-. THE CHARTERED ACCOUNTANT OF THE ASSESSEE BY MISTAKE EXPLAINED BEF ORE THE ASSESSING OFFICER THAT THE MONEY WAS RECEIVED OUT O F BUSINESS COMPULSION. IN FACT, ACCORDING TO THE LD. COUNSEL, THE ASSESSEE IS 3 I.T.A. NOS.549 TO 558/MDS/14 NOT DOING ANY BUSINESS AT ALL. THEREFORE, THERE IS NO NECESSITY FOR THE ASSESSEE TO RECEIVE EITHER AS LOAN OR OTHERWISE FROM THE PROPRIETOR OF M/S VADAMALAYAN FINANCE. ON A QUERY FROM THE BENCH, IF THE ASSESSEE IS NOT DOING ANY BUSINESS, W HY THE ASSESSEE OBTAINED PAN, WHICH WAS REFERRED IN THE ORDERS OF T HE LOWER AUTHORITIES? THE LD.COUNSEL CLARIFIED THAT THE ASS ESSEE WAS A PARTNER IN A TEXTILE SHOP FEW YEARS AGO AND THE TEX TILE BUSINESS WAS CLOSED AND DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NO SOURCE OF INCOME AT ALL. THE ASSESSEE IS ALSO N OT DOING ANY BUSINESS. THEREFORE, THE EXPLANATION GIVEN BY THE CHARTERED ACCOUNTANT THAT THE MONEY WAS BORROWED FOR BUSINESS COMPULSION IS FACTUALLY NOT CORRECT. 3. REFERRING TO THE ORDERS OF THE CIT(APPEALS), THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE CIT(APPEALS) P ROCEEDED ON THE PRESUMPTION THAT THE ASSESSEES NAME, SIGNATURE, TH E AMOUNT RECEIVED / REPAID AND THE DATE OF RECEIPT FIGURED I N THE REGISTER MAINTAINED BY THE FINANCIER SHRI A. KANNAN. PRODUC ING A COPY OF THE SO-CALLED REGISTER, THE LD.COUNSEL SUBMITTED TH AT THIS IS THE REGISTER PRODUCED BEFORE THE REVENUE. THIS REGISTE R DOES NOT CONTAIN THE NAME OF ASSESSEE OR SIGNATURE. THEREFO RE, THE 4 I.T.A. NOS.549 TO 558/MDS/14 OBSERVATION MADE BY THE CIT(APPEALS) IS CONTRARY TO THE FACT ON RECORD. ACCORDING TO THE LD. COUNSEL, SINCE THE AS SESSEE HAS NOT RECEIVED ANY MONEY FROM THE FINANCIER SHRI A. KANNA N OR M/S VADAMALAYAN FINANCE, THERE CANNOT BE ANY LEVY OF PE NALTY UNDER SECTIONS 271D OR 271E OF THE ACT. 4. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOUND THAT THE A SSESSEE HAS RECEIVED ` 20,00,000/- FROM SHRI A. KANNAN, PROPRIETOR, M/S VADAMALAYAN FINANCE. BY LETTER DATED 09.01.2013, T HE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE LOA N WAS RECEIVED AND REPAID OUT OF BUSINESS COMPULSION. THEREFORE, THE PROVISIONS OF SECTION 273B WOULD BE APPLICABLE. HENCE, THE ASSES SEE REQUESTED THE ASSESSING OFFICER TO DROP THE PROCEEDINGS UNDER SECTIONS 271D AND 271E OF THE ACT. THE CLAIM MADE BY THE ASSESSE E NOW BEFORE THIS TRIBUNAL AND CIT(APPEALS) THAT NO MONEY WAS RE CEIVED FROM SHRI A. KANNAN, PROPRIETOR, M/S VADALAMAYAN FINANCE , IS CONTRARY TO THE STATEMENT MADE BY THE ASSESSEE IN THE LETTER DATED 09.01.2013. WHEN THE ASSESSEE CLAIMED THAT THE MON EY WAS BORROWED FOR BUSINESS COMPULSION, IT IS FOR THE ASS ESSEE TO EXPLAIN 5 I.T.A. NOS.549 TO 558/MDS/14 WHAT WAS THE ACTUAL COMPULSION WHICH MADE HER TO RE CEIVE THE MONEY IN CASH. IN THE ABSENCE OF ANY MATERIAL, THE CIT(APPEALS), ACCORDING TO THE LD. D.R., HAS RIGHTLY CONFIRMED TH E ADDITION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS A SURVEY OPERATION IN THE PREMISES OF SHRI A. K ANNAN, PROPRIETOR, M/S VADAMALAYAN FINANCE, PONDICHERRY. THE REVENUE AUTHORITIES FOUND KISTHI VASOOL LIST BOOK WHICH DIS CLOSED THE DETAILS OF VARIOUS PERSONS WHO RECEIVED LOAN FROM THE ASSES SEE AND REPAID THE SAME. THE ASSESSEE CLAIMED THAT SHE IS ONE OF THE BORROWERS WHO BORROWED MONEY FROM SHRI A. KANNAN AND REPAID T HE SAME IN CASH. FROM THE ORDERS OF THE LOWER AUTHORITIES IT APPEARS THAT THE ASSESSEE BY LETTER DATED 09.01.2013 EXPLAINED BEFOR E THE ASSESSING OFFICER THAT THE MONEY WAS BORROWED FOR B USINESS COMPULSION, THEREFORE, THERE CANNOT BE ANY LEVY OF PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT. IN FACT, THIS W AS THE ADMISSION MADE BY THE ASSESSEE. NOW THE LD.COUNSEL FOR THE A SSESSEE CLAIMS THAT THE ASSESSEE HAS NO BUSINESS AT ALL. T HEREFORE, IT NEEDS TO BE EXAMINED WHETHER THE ASSESSEE IN FACT CARRYIN G ON ANY BUSINESS WHICH NECESSITATED THE ASSESSEE TO BORROW MONEY FROM 6 I.T.A. NOS.549 TO 558/MDS/14 SHRI A. KANNAN. IN THE ABSENCE OF ANY BUSINESS, NA TURALLY THERE IS NO REASONABLE CAUSE FOR RECEIVING THE MONEY IN QUES TION. HOWEVER, PLACING RELIANCE ON THE KISTHI VASOOL LIST BOOK FOR RECEIPT AND REPAYMENT OF MONEY BY THE ASSESSEE EXCEEDING ` 20,000/-, THE CIT(APPEALS) OBSERVED IN HIS ORDER THAT THE ASSESSE ES NAME, SIGNATURE AND AMOUNT RECEIVED / REPAID ALONG WITH D ATE OF RECEIPT FIGURED IN THE REGISTER MAINTAINED BY THE FINANCIER SHRI A. KANNAN. HOWEVER, THE ASSESSEE DISPUTED THE SAME. THE LD.CO UNSEL FOR THE ASSESSEE, BY PRODUCING A COPY OF THE REGISTER, CLAI MED THAT THE ASSESSEES SIGNATURE IS NOT THERE. ACCORDING TO TH E LD. COUNSEL, WHAT IS MENTIONED IS SMT. USHA AMMAL. THERE IS NO REFERENCE IN THE REGISTER TO INDICATE THAT THE NAME OF USHA AMMA L FOUND THEREIN REFERS THE PRESENT ASSESSEE. THEREFORE, IT NEEDS T O BE VERIFIED WHETHER THERE WAS ANY SIGNATURE IN THE REGISTER AS OBSERVED BY THE CIT(APPEALS). SINCE THE DEPARTMENT HAS NOT PRODUCE D ORIGINAL REGISTER BEFORE THIS TRIBUNAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LI GHT OF THE MATERIAL AVAILABLE ON RECORD AND ALSO BRING ON RECORD WHETHE R THE ASSESSEE 7 I.T.A. NOS.549 TO 558/MDS/14 IS IN FACT CARRYING ON ANY BUSINESS. THE ASSESSING OFFICER SHALL EXAMINE WHETHER THE ASSESSEE IN FACT RECEIVED THE M ONEY AND REPAID TO SHRI A. KANNAN AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 27 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 27 TH NOVEMBER, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-VI, CHENNAI-34 4. 1 92 /CIT, PONDICHERRY 5. 7: -2 /DR 6. ( ; /GF.