SH. RABINDER SINGH WANN, AMRITSAR V. INCOME TAX OFFICER, WARD - 5(3), AMRITSAR

ITA 552/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1057 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-02-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 24-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL
• Keywords: TDS
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO.552/ASR/2017 AS SESSMENT YEAR: 2008-09 RABINDER SINGH WANN, 5-GREEN ACRES, VILLAGE HEIR, VPO RAJASANSI, AIRPORT ROAD, AMRITSAR. [PAN: AABPW 3903F] VS. INCOME TAX OFFICER, WARD-5(3), AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PADAM BAHL (C.A. ) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 27.02.2019 DATE OF PRONOUNCEMENT: 15.03.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, AMRITSAR (' CIT(A)' FOR SHORT) DATED 05.06.2017, CONFIRMING THE LEVY OF PENALTY U/S. 271 (1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) BY THE ASSESSING OFFIC ER VIDE ORDER DATED 28.03.2016 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. THE ASSESSEE, A DOCTOR BY PROFESSION, FILED HIS RETURN OF INCOME FOR THE RELEVANT YEAR ON 29.07.2008 AT AN INCOME OF RS.2,86 ,520. THE SAME DID NOT INCLUDE INTEREST INCOME OF RS.79,800/- ALLOWED TO THE ASSES SEE BY SAHARA INDIA COMMERCIAL CORPORATION LTD., LUCKNOW (SAHARA FOR SHORT) DURI NG THE YEAR, DEDUCTING TAX THEREON AT RS.8,220, DULY REFLECTED IN FORM NO.26AS , WHICH (TAX DEDUCTED AT ITA NO. 552/ASR/2017 (AY 2008-09) RABINDER SINGH WANN V. ITO 2 SOURCE (TDS)) WAS THOUGH NOT CLAIMED CREDIT OF BY T HE ASSESSEE PER HIS RETURN OF INCOME. THE ASSESSING OFFICER (AO), UPON CONFIRMING THE INTEREST CREDIT TO THE ASSESSEE BY SAHARA, BROUGHT THE SAME TO TAX, ALSO I NITIATING PENALTY PROCEEDINGS U/S. 271(1)(C) VIDE ORDER U/S. 143(3) DATED 29.12.2010. THE ASSESSEE LOOSING IN FIRST APPEAL, DID NOT CARRY THE MATTER FURTHER, SO THAT T HE PENALTY PROCEEDINGS WERE PROCEEDED WITH. THE ASSESSEES CLAIM THAT AS TAX HA D ALREADY BEEN DEDUCTED AT SOURCE, IT COULD NOT BE REGARDED AS A CASE OF CONCE ALMENT OF PARTICULARS OF INCOME, DID NOT FIND FAVOUR WITH THE REVENUE, IN WHOSE VIEW THE DECISION IT CIT VS. ZOOM COMMUNICATIONS PVT. LTD. [2010] 327 ITR 510 (DEL) WAS CLEARLY APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER, THE F ACT THAT INTEREST HAD NOT BEEN PAID, BUT ONLY CREDITED TO THE ASSESSEES ACCOUNT, WOULD BE OF NO MOMENT. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. IT IS IMPORTANT, TO DECIDE THE ISSUE OF EXIGIBILITY TO PENALTY, ASCERTAIN THE NATURE OF THE CONTRACT ENTERED INTO BY THE ASSESSEE WITH SAHARA. THE SAME, IT MAY BE NOTED, IS NOT FOR AN INTEREST YIELDING DEPOSIT, I.E ., BY WAY OF AN INTEREST BEARING DEPOSIT. THE ASSESEE HAD IN FACT INVESTED RS. 2 LAC S WITH SAHARA FOR PURCHASE OF A PLOT OF LAND (IN AN APPROVED RESIDENTIAL COLONY IN OR AROUND AMRITSAR). AS IT APPEARS, THE PROJECT DID NOT MATERIALIZE, AND THE A MOUNT WAS REFUNDED BACK AFTER FOUR YEARS (REFER PARA 3, PAGE-1 OF THE ASSESSMENT ORDER). THE ASSESSEE WAS ISSUED TWO RECEIPTS OF RS.21,000/- EACH, DATED 31.3.2008, FOR PURCHASE OF AN IMMOVABLE PROPERTY (HOUSING/COMMERCIAL UNIT) AND/OR PRODUCTS OF SAHARA OR ITS BUSINESS ASSOCIATES AND/OR AVAIL SERVICES OF SAHARA OR ITS B USINESS ASSOCIATES, AS PER THE TERMS AND CONDITIONS OF THE COMPANY. THERE IS NO ME NTION OF ANY INTEREST IN THE SAID DEPOSIT RECEIPTS. NO ASSESSEE INTERESTED IN BU YING A HOUSING UNIT WOULD ENTER INTO SUCH A VAGUE CONTRACT. THERE IS, AS STATED, NO STIPULATION OF ANY RATE OF INTEREST, ITA NO. 552/ASR/2017 (AY 2008-09) RABINDER SINGH WANN V. ITO 3 MUCH LESS AT A FIXED RATE, THAT THE DEPOSIT AMOUNT SHALL CARRY, EVEN IF TILL THE TIME OF ALLOTMENT OF PLOT OR AVAILING OF SERVICE OR OTHER P RODUCTS WHATEVER THOSE PRODUCTS OR SERVICES MAY BE. THE SOURCE OF THE DEPOSIT AMOUN T/S, WHICH APPEARS TO BE AGAINST THE INITIAL DEPOSIT OF RS. 1 LAC EACH, IS N OT CLEAR. ON THE BACK SIDE OF THE RECEIPT/S APPEARS A CHART AS PER WHICH THE ADVANCE PAYMENT OF RS.20,000/- IS TO BE ADJUSTED (IN FOUR INSTALLMENTS OF RS.5,000/- EAC H) I.E., AT THE END OF 18, 24, 36, 48 MONTHS. FOR EXAMPLE, AFTER 18 MONTHS, RS.5,000/- SHALL BE STAND ADJUSTED AT A VALUE OF RS.5,855/- (CALLED CREDIT VALUE) AND SO ON. WHAT, THEN, EXPLAINS THE CREDIT OF RS.79,800/- TO THE ASSESSEES ACCOUNT (I.E., RS. 39,900 X 2) BY SAHARA ON 31.3.2008? FOR ALL WE KNOW, THE DEPOSIT (BY WAY OF TWO RECEIPTS OF RS. 21,000 EACH) IS ITSELF BY WAY OF INTEREST, I.E., ALONG WIT H RS. 79,800 (RS. 39,900 X 2), IN WHICH CASE THOUGH TAX OUGHT TO HAVE BEEN DEDUCTED T HERE-FROM AS WELL. THE IMPUGNED INTEREST AMOUNT WAS NOT ACTUALLY RECEI VED BY THE ASSESSEE, WHO HAD ONLY BARGAINED FOR A PLOT OF LAND OR A HOUS ING UNIT. EVEN IF SOME INTEREST WAS PROMISED FOR THE PERIOD TILL THE ALLOTMENT OF P LOT/HOUSING UNIT, THERE IS NO WRITTEN CONTRACT THEREFOR. EVEN OTHERWISE, THERE WA S NO CERTAINTY WITH REGARD TO THE RECEIPT OF INTEREST, WHICH, AS ALLOWED, APPEARS TO BE THE CUMULATIVE INTEREST FOR FOUR YEARS. UNDER THE CIRCUMSTANCES, THE ASSESSEE WAS JU STIFIED IN NOT RETURNING THE INTEREST AMOUNT, I.E., TILL THE ACTUAL RECEIPT THER EOF. NO CREDIT FOR TDS (RS.8,220), AS STATED BY THE LD. CIT(A), HAS BEEN CLAIMED BY THE A SSESSEE, WHICH IN FACT COULD NOT BE AS THE SAME IS ADMISSIBLE FOR THE YEAR IN WHICH THE CORRESPONDING INCOME IS ASSESSABLE (SEC.199 R/W R. 37BA). THE SAME WAS NOT RETURNED BY THE ASSESSEE. THERE CAN BE NO ACCRUAL OF INCOME UNLESS THERE IS A REASONABLE CERTAINTY AS TO THE REALIZATION THEREOF, EVEN IF IN FUTURE, AND A PROVI SION BY THE CORRESPONDING PARTY IN HIS BOOKS OF ACCOUNT DOES NOT, BY ITSELF, SIGNIFY T HAT CERTAINTY, FOR WHICH THE ENTIRETY OF FACTS AND CIRCUMSTANCES WOULD HAVE TO B E TAKEN INTO ACCOUNT. THE ASSESSEE, WHO CANNOT BE BOUND BY THE ENTRIES PASSED BY THE DEBTOR/DEPOSITEE IN ITS ITA NO. 552/ASR/2017 (AY 2008-09) RABINDER SINGH WANN V. ITO 4 BOOKS OF ACCOUNT, THUS HAD PLAUSIBLE A REASON FOR N OT RETURNING THE INTEREST INCOME. OF EQUAL IMPORTANCE, INASMUCH AS IT ESTABLISHES THE ASSESSEES BONA FIDES , VERY RELEVANT IN PENALTY PROCEEDINGS, IS THE FACT THAT T HE ASSESSEE RETURNED THIS INTEREST ON RECEIPT. NO PENALTY, IN MY VIEW, IS UNDER THE CIRCUMSTANCES, IMPOSABLE. NO EXAMINATION OF THE RATE AT WHICH THE PENALTY STANDS LEVIED, WHICH APPEARS TO BE HIGHER THAN THE MINIMUM RATE OF 100% OF THE TAX SOU GHT TO BE EVADED, IS, THEREFORE CALLED FOR. THE SAME IS ACCORDINGLY DIRECTED FOR DE LETION. I DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN CO URT ON MARCH 15, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 15.03.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: RABINDER SINGH WANN, 5-GREEN ACRES, VILLAGE HEIR, VPO RAJASANSI, AIRPORT ROAD, AMRITSAR. (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-5( 3), AMRITSAR (3) THE CIT(APPEALS)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER FILENAME: RABINDER SINGH WANN- 552-17 DIRECTORY: D:\DOCUMENT\SANJAY ARORA ORDER\GP - LEAV E TEMPLATE: C:\USERS\ETC PARMOD\APPDATA\ROAMING\MICROSOFT\TEMPLATES\NORMAL.D OT TITLE: IN THE INCOME TAX APPELLATE TRIBUNAL SUBJECT: AUTHOR: STUDENT KEYWORDS: COMMENTS: CREATION DATE: 3/11/2019 1:00:00 PM CHANGE NUMBER: 61 LAST SAVED ON: 3/18/2019 10:36:00 AM LAST SAVED BY: ETC PARMOD TOTAL EDITING TIME: 208 MINUTES LAST PRINTED ON: 3/18/2019 10:37:00 AM AS OF LAST COMPLETE PRINTING NUMBER OF PAGES: 6 (APPROX.) NUMBER OF WORDS: 1,147 (APPROX.) NUMBER OF CHARACTERS: 6,542 (APPROX.)