ITO, New Delhi V. M/s. Integrated Technolgy Ltd., New Delhi

ITA 5552/DEL/2011

• Counselvise Citation: 555220114 RSA 2011
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-02-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRADR
• Assessee Lawyers: V MOHAN
• Section: 273B; 143(3); 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENC H BEFORE SHRI R.P. TOLANI, JM & SHRI A.N. PAHUJA, AM ITA NO.5552/DEL/2011 ASSESSMENT YEAR: 1998-99 INCOME TAX OFFICER, WARD- 11(4), ROOM NO.324, C.R. BUILDING, NEW DELHI V/S. M/S INTEGRATED TECHNOLOGY LTD., C-24, DEFENCE COLONY, NEW DELHI [PAN NO.: AAACI 0782 J] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI V. MOHAN, AR REVENUE BY SHRI SALIL MISHRA,DR DATE OF HEARING 09-02-2012 DATE OF PRONOUNCEMENT 09-02-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 9 TH DECEMBER, 2011 BY THE REVENUE AGAINST AN ORDER DATED 12.10.2011 OF THE LD. CIT(A)-XV, NE W DELHI, RAISES THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETI NG THE PENALTY OF ` `17,95,200/- U/S 271D OF THE INCOME-TAX ACT, 1961 BY OBSERVING THAT MERE ACKNOWLEDGEMENT OF A DE BIT BY A BOOK ENTRY DOES NOT ATTRACT THE PROVISIONS OF SECTION 269SS BY RELYING ON THE DECISIONS IN THE CASES OF C IT VS. NOIDA TOLL BRIDGE CO. LTD. (262 ITR 260) (DELHI) AN D SUNFLOWER BUILDERS (P) LTD. VS. DCIT (1997) 61 ITD (PN) 227. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARIN G. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT , 1961 (HEREAFTER REFERRED TO AS THE ACT) VIDE ORDER DATED 14.03.2001, DETERMI NING INCOME OF ` ` 36,35,000/- AS AGAINST NIL INCOME RETURNED BY THE ASSESSEE. IN TER ALIA, AN AMOUNT OF ` `36,35,000/- WAS ADDED U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED UNSECURED ITA N OS.3007-4445 /DEL./2010 2 CREDITS. ON APPEAL, THE LD. CIT(A) UPHELD THE ADDIT ION. ON FURTHER APPEAL, THE ITAT RESTORED THE ISSUE BACK TO THE FILE OF THE AO FOR FRESH DECISION IN ACCORDANCE WITH LAW. IN TERMS OF THE DIRECTIONS OF THE ITAT, THE AO ,VIDE HIS ORDER DATED 30.12.2009 AGAIN ADDED AN AMOUNT OF ` ` 18,31,900/- U/S 68 OF THE ACT WHILE IN RESPECT OF REMAINING AMOUNT OF ` 17,95,200/-,THE AO CONCLUDED THAT THIS AMOUNT WAS NOT A TRADE CREDITOR BUT A LOAN CREDITOR THROUGH THE JOURNAL ENTRIES IN THE ASSESSEES BOOKS ON ACCOUNT OF PAYMENT MADE BY SHRI RAJEEV BALI TO FOUR PARTIES ON BEHALF OF THE ASSESSEE. SINCE THE PAYMEN TS WERE MADE OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR DRAFT, THE AO TREAT ED THE COMPANY IN DEFAULT IN TERMS OF PROVISIONS OF SECTION 269SS OF THE ACT AND ACCORDINGLY, REFERRED THE MATTER TO THE ADDL. CIT FOR INITIATING PENALTY PROC EEDINGS U/S 271D OF THE ACT. THE ADDL. CIT, ACCORDINGLY, INITIATED PENALTY PROC EEDINGS U/S 271D OF THE ACT VIDE LETTER DATED 07.01.2010. IN RESPONSE TO A SHO W CAUSE NOTICE DATED 6.5.2010 ISSUED BY THE ADDL. CIT, THE ASSESSEE SUBMITTED HIS REPLY VIDE LETTER DATED 12 TH MAY, 2010. AFTER CONSIDERING THE REPLY OF THE ASSE SSEE, THE ADDL. CIT IMPOSED A PENALTY OF ` ` 17,95,200/- ON THE GROUND THAT THE ASSESSEE ACCEPTE D THE AFORESAID LOAN OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCO UNT PAYEE BANK DRAFT, IN VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT. 3. ON APPEAL, THE LEARNED CIT(A) CANCELLED THE PEN ALTY HOLDING AS UNDER:- 8. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT, FINDINGS OF THE ASSESSING OFFICER AND THE FACTS ON RECORD AND H AVE ALSO PERUSED THE ORDER IMPOSING THE PENALTY U/S 271D. I T IS SEEN THAT THE AO IN HIS ORDER GAVE THE FOLLOWING FINDING WHIL E IMPOSING THE PENALTY. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE A ND GIVEN A CAREFUL THOUGHT. IT IS PERTINENT TO MENTION THAT S ECTION 269SS OF THE INCOME-TAX ACT HAS BEEN INSERTED BY THE FINANCE ACT, 1984 WITH EFFECT FROM 1.4.1984. THE BASIC INTENTION TO BRING THIS NEW SECTION WAS A COUNTER DEVICE BEING USED TO PUMP IN UNACCOUNTED MONEY INTO BOOKS OF ACCOUNTS IN FORM OF LOAN DEPOSI TS. THIS NEW SECTION DEBARRING PERSONS FROM TAKING OR DEPOSIT OT HERWISE THAN BY AN ACCOUNT PAYER CHEQUES OR DRAFT IF THE AMOUNT OF SUCH LOAN OR ITA N OS.3007-4445 /DEL./2010 3 DEPOSIT OR AGGREGATING AMOUNT IS `20,000/- OR MORE. THE PROHIBITION WILL, HOWEVER, NOT APPLY TO ANY LOAN OR DEPOSIT ACCEPTED FROM (I) GOVERNMENTS (II) ANY BANKING COMP ANY, POST OFFICE, SAVING BANK OR ANY CO-OPERATIVE BANK (III) CORPORATION (IV) GOVT. COMPANY (V) SUCH OTHER INSTITUTE NOTIFIED BY CENTRAL GOVT. THE ASSESSEES CASE DOES NOT COME UNDER ANY EXEMPTE D CATEGORY AS DISCUSSED ABOVE. IF THE ABOVE PROVISION IS NOT IMPLEMENTED STRICTLY, THEN, THE ASSOCIATED PERSONS WOULD LIKE T O ROTATE THEIR UNACCOUNTED MONEY BE PASSING JOURNAL ENTRIES IN THE BOOKS OF ACCOUNTS. 8.1 IN THE APPELLANTS CASE IT IS AN ADMITTED FACT THAT THE GENUINENESS OF PAYMENT OF ` ` 17,95,200/- MADE BY DIRECTORS MR. RAJIV BALI TO VARIOUS PARTIES ON ACCOUNT OF APP ELLANT IS NOT IN DOUBT. THE ONLY ISSUE IS THAT WHETHER MERE ACKNOWLEDGEMENT OF DEBT BY A BOOK ENTRY ATTRACTS TH E PROVISION OF SECTION 269SS OR NOT. IN MY VIEW THE FACTS OF THE APPELLANT CASE ARE SQUARELY COVERED BY THE DECI SION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . NOIDA TOLL BRIDGE CO. LTD. 262 ITR 260 (DELHI) WHEREIN THE COU RT UPHELD THE TRIBUNALS VIEW THAT THE PROVISIONS OF S ECTION 269 SS WERE NOT ATTRACTED TO A TRANSACTION WHERE LOAN O R DEBT IS ACKNOWLEDGED THROUGH THE JOURNAL ENTRIES IN THE BOO K OF ACCOUNTS. 8.2 FURTHER, THAT PROVISION OF SECTION 269SS ARE NO T APPLICABLE WITH RESPECT TO BOOK ENTRIES HAVE ALSO BEEN CLEARLY SPELLED OUT IN A DETAILED ORDER BY THE HONBLE MEMBERS OF I TAT PUNE BENCH IN THE CASE OF SUN FLOWER BUILDERS (P) LTD. V S. DCIT (1997) 61 ITD (PN) 227, WHEREIN THEY HELD THAT; THE BARE READING OF SECTION 269SS CLEARLY SHOWS THA T THE WORDS TAKE OR ACCEPT HAS BEEN USED WITH REFERENCE TO THE WORDS LOAN OR DEPOSIT RESPECTIVELY. THE REASON I S OBVIOUS. IN THE CASE OF LOAN, IT IS THE BORROWER WHO GOES TO THE LENDER FOR OBTAINING THE LOAN AND IN THE CAS E, OF DEPOSIT, IT IS THE DEPOSITOR WHO GOES TO THE PERSON WITH WHOM HE WANTS TO DEPOSIT THE MONEY. THIS IS THE RE ASON THAT THE LEGISLATURE HAS USED THE WORK TAKE WITH REFERENCE TO THE WORD LOAN AND USED THE WORD ACC EPT WITH REFERENCE TO THE WORDS LOAN OR DEPOSIT AS L OAN OR DEPOSIT OF ON MONEY. THIS CLEARLY SHOWS THAT THI S SECTION CAN BE APPLIED ONLY WHERE MONEY PASSES FROM ONE PERS ON TO ANOTHER BY WAY OF LOAN OR DEPOSIT. THIS PROVI SION CANNOT, THEREFORE, BE APPLIED WHERE THE MONEY DOES NOT ITA N OS.3007-4445 /DEL./2010 4 PASS FROM ONE PERSON TO ANOTHER BUT THE DEBT IS ACKNOWLEDGED BY PASSING ENTRY IN THE BOOKS OF ACCOU NTS. 8.3 THE AO IN HIS PENALTY ORDER HAS STATED THAT IF PENALTY PROVISIONS U/S 269 SS ARE NOT IMPLEMENTED STRICTLY THAN THE ASSOCIATED PERSONS WOULD LIKE TO ROTATE THEIR UNACC OUNTED MONEY BY PASSING JOURNAL ENTRIES IN THE BOOKS OF AC COUNTS. WITH REGARD TO THIS OBSERVATION OF THE ASSESSING OF FICER, IT IS STATED THAT THE PENAL PROVISIONS ARE TO BE CONSTRUE D STRICTLY AND NO PERSON CAN BE PENALIZED UNLESS THE DEFAULT F ALLS WITHIN THE FOUR CORNERS OF THE PENAL PROVISIONS. TH E INTERPRETATION SHOULD BE MADE TO MAKE THE PROVISION S WORKABLE CAN BE APPLIED ONLY TO THE PROVISIONS OTHE R THAN THE CHARGING SECTION AND PENAL PROVISIONS. WHEN THE PR OVISIONS ARE TO BE CONSTRUED STRICTLY, IT IS IMPERMISSIBLE F OR THE COURTS TO READ INTO THE TAXING PROVISIONS ANY WORDS WHICH ARE NOT THERE AND EXCLUDE THE WORDS WHICH ARE THERE. IF TH ERE IS ANY LACUNA LEFT BY THE LEGISLATURE WHILE ENACTING THE P ENAL PROVISIONS, IT IS ONLY FOR THE LEGISLATURE TO AMEND SUCH LAW. IT IS ALSO SETTLED PROVISION OF LAW THAT IF THE PENAL PROVISIONS ARE SUSCEPTIBLE OF TWO INTERPRETATIONS, THEN THE INTERP RETATION WHICH IS FAVOURABLE TO THE ASSESSEE SHOULD BE ADOPT ED. REFERENCE MAY BE MADE TO THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PROD UCTS LTD. (1973) 88 ITR 192 (SUPREME COURT). 8.4 HENCE IN VIEW OF THE ABOVE DISCUSSIONS, I HOLD THAT THERE IS NO VIOLATION OF PROVISIONS OF SECTION 269SS IN THE CASE WHERE THERE IS ACKNOWLEDGEMENT OF A DEBT BY A MERE BOOK E NTRY AND CONSEQUENTLY THE PENALTY CANNOT BE IMPOSED U/S 271D FOLLOWING THE DECISION IN THE CASE OF NOIDA TOLL BR IDGE (SUPRA) BY JURISDICTIONAL HIGH COURT. AS THE DECIS ION OF THE JURISDICTIONAL HIGH COURT IS BINDING AS HAS BEEN HE LD IN: A) 169 ITR 564 (AP) STATE OF AP VS. COMMERCIAL TAX OFFICER B) 221 ITR 739 (GUJ) AIR CONDITIONING SPECIALISTS P VT. LTD. VS. UNION OF INDIA C) 156 ITR 1 (BOM) I.T.O. VS. SIEMENS INDIA LTD. D) 220 ITR 459 (GUA) SHRI MAHABIR INDUSTRIES VS. CI T E) 143 ITR 120 (BOM) SIEMENS INDIA LTD. VS. I.T.O. THEREFORE, FOLLOWING THE ABOVE, THE PENALTY IMPOSED UNDER SECTION 271D STANDS DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAI NST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR WHILE CARRYING US THROUGH THE PENALTY ORDER SUPPORTED ITA N OS.3007-4445 /DEL./2010 5 THE FINDINGS OF THE ADDL. CIT WHILE THE LD. AR ON B EHALF OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. INDISPUTABLY, SHRI RAJEEV BALI, THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY HAD MADE PAYMENTS TO THE FOLLOWING FOUR PAR TIES FOR REPAIRS TO MACHINERY, INTERIOR WORK, ETC FOR THE COMPANY: [IN ` ] 1. M/S INTERIOR WORKS - `3,28,70 0/-(FOR ALUMINIUM SECTIONS, GLASS ETC.) 2. M/S V.H. ENGINEERS -`3,86,500/ -(FALSE CEILING/AIR CONDITIONING WORK) 3. M/S PROCON TURNKEY PROJECTS - `7,80,000/-(SUPP LY OF FIXED ASSETS) 4. M/S TRANS MARKETING (P) LTD. -`3,00,000 /-(REPAIR OF MACHINERY) TOTAL: 17,95,200 5.1 THE GENUINENESS OF THE AFORESAID PAYMENTS IS NOWHERE IN DOUBT. THE ASSESSEE COMPANY THROUGH THE JOURNAL EN TRIES IN THEIR BOOKS OF ACCOUNT ACKNOWLEDGED THE SAID DEBT ON ACCOUNT OF AFORESAID PAYMENTS MADE BY ITS MD. THE ISSUE BEFORE US AS TO WHETHER MERE A CKNOWLEDGEMENT OF DEBT BY A BOOK ENTRY ATTRACTS THE PROVISION OF SECTION 269S S OF THE ACT. BEFORE PROCEEDING FURTHER, WE MAY HAVE A LOOK AT THE RELE VANT PROVISIONS OF SEC. 269SS OF THE ACT, WHICH READ AS UNDER: ' NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984 , TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION RE FERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY A N ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF,- (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGRE GATE AMOUNT OF SUCH LOAN AND DEPOSIT; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR DEPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HA S FALLEN DUE OR NOT), THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID; OR ITA N OS.3007-4445 /DEL./2010 6 (C) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT RE FERRED TO IN CLAUSE (B), IS TWENTY THOUSAND RUPEES OR MORE: EXPLANATION: FOR THE PURPOSE OF THIS SECTION, (III) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MO NEY.' 5.2 THE AFORESAID PROVISIONS OF S. 269SS SAY TH AT IF THE STIPULATED AMOUNT OF LOAN OR DEPOSIT IS ACCEPTED OTHERWISE TH AN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, THERE IS A VIOLATION OF THE SAID PROVISIONS. BUT THE EXPLANATION APPENDED TO THE PROVISIONS OF S. 269SS OF THE ACT MAKES IT CLEAR THAT DEPOSIT OR LOA N MUST BE MADE THROUGH MONEY. THERE BEING NO TRANSFER OF MONEY IN THE CASE BEFORE US, IT CANNOT BE SAID THAT SUCH DEPOSIT OR LOAN COMES WITHIN THE MISCHIEF OF SEC. 269SS OF THE ACT. FOR VIOLATION OF S. 269SS OF THE ACT, IT IS NECESSARY T HAT THERE SHOULD BE TRANSFER OF MONEY, WHICH IS NOT IN THE INSTANT CASE. THEREFORE, IN OUR VIEW, THE CLAIM OF THE REVENUE THAT SINCE THE LOAN OR DEPOSIT IS NOT AS PE R MODE PRESCRIBED UNDER S. 269SS OF THE ACT, THERE IS VIOLATION OF THE SAID P ROVISIONS, CANNOT BE ACCEPTED. IT IS ALSO UNDISPUTED FACT THAT ALL THE TRANSACTIONS MENTIONED ABOVE WERE THROUGH BOOK ADJUSTMENT . THERE IS NOTHING ON RECORD TO IND ICATE THAT THE ASSESSEE HAD INDULGED IN ANY TAX PLANNING OR TAX EVASION NOR THE RE IS ANYTHING TO SUGGEST THAT BY MAKING THE BOOK ENTRIES THE ASSESSEE HAS MADE TH E ADJUSTMENT MALA FIDE. THERE IS NOTHING ON RECORD TO SHOW THAT THE AFORESA ID TRANSACTIONS WERE ATTACHED WITH CERTAIN CONDITIONS OR STIPULATIO N AS TO PERIOD OF REPAYMENT, RATE OF INTEREST, MANNER OF REPAYMENT, E TC. SO AS TO TREAT THE SAID TRANSACTIONS AS LOANS OR DEPOSITS. THE REV ENUE HAVE NOT PLACED BEFORE US ANY MATERIAL SUGGESTING THAT THE TRANSACTIONS WERE ACTUALLY IN THE NATURE OF LOANS OR DEPOSITS. IN TH ESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE TRANSACTIONS BEING NOT IN THE NATURE OF LOANS OR DEPOSITS, THE PROVISIONS OF SECTION 269SS OF THE ACT ARE NOT ATTRACTED. THE MEANING OF 'DEPOSIT ' AND ' LOAN ' HAS BEEN ITA N OS.3007-4445 /DEL./2010 7 EXPLAINED ON PAGE 8454 OF THE CHATURVEDI AND PITHI SARIA'S INCOME- TAX LAW. FIFTH EDITION, VOLUME 5, AS UNDER: ' 'DEPOSIT' AND 'LOAN'- THESE TWO ARE NOT IDENTICAL IN MEANING. - IT IS TRUE THAT BOTH IN THE CASE OF A LOAN AND IN THE CAS E OF A DEPOSIT THERE IS A RELATIONSHIP OF A DEBTOR AND A CREDITOR BETWEEN THE PARTY GIVING MONEY AND THE PARTY RECEIVING MONEY. BUT IN THE CASE OF A DEPOSIT, THE DELIVERY OF MONEY IS USUALLY AT THE IN STANCE OF THE GIVER AND IT IS FOR THE BENEFIT OF THE PERSON WHO DEPOSIT S THE MONEY - THE BENEFIT NORMALLY BEING EARNING OF INTEREST FROM A P ARTY WHO CUSTOMARILY ACCEPTS DEPOSITS. DEPOSITS COULD ALSO B E FOR SAFE- KEEPING OR AS A SECURITY FOR THE PERFORMANCE OF AN OBLIGATION UNDERTAKEN BY THE DEPOSITOR. IN THE CASE OF A LOAN, HOWEVER, IT IS THE BORROWER AT WHOSE INSTANCE AND FOR WHOSE NEEDS THE MONEY IS ADVANCED. THE BORROWING IS PRIMARILY FOR THE BENEFI T OF THE BORROWER ALTHOUGH THE PERSON WHO LENDS THE MONEY MAY ALSO ST AND TO GAIN THEREBY BY EARNING INTEREST ON THE AMOUNT LENT. ORD INARILY, THOUGH NOT ALWAYS, IN THE CASE OF A DEPOSIT, IT IS THE DEP OSITOR WHO IS THE PRIME MOVER WHILE IN THE CASE OF A LOAN, IT IS THE BORROWER WHO IS THE PRIME MOVER. THE OTHER AND MORE IMPORTANT DISTINCTI ON IS IN RELATION TO THE OBLIGATION TO RETURN THE AMOUNT SO RECEIVED. IN THE CASE OF A DEPOSIT WHICH IS PAYABLE ON DEMAND, THE DEPOSIT WOU LD BECOME PAYABLE WHEN A DEMAND IS MADE. IN THE CASE OF A LOA N, HOWEVER, THE OBLIGATION TO REPAY THE AMOUNT ARISES IMMEDIATE LY ON RECEIPT OF THE LOAN. IT IS POSSIBLE THAT IN CASE OF DEPOSITS W HICH ARE FOR A FIXED PERIOD OR LOANS WHICH ARE FOR A FIXED PERIOD, THE P OINT OF REPAYMENT MAY ARISE IN A DIFFERENT MANNER. BUT BY AND LARGE, THE TRANSACTION OF A LOAN AND THE TRANSACTION OF MAKING A DEPOSIT ARE NOT ALWAYS CONSIDERED IDENTICAL. ' 5.21 IN THE LIGHT OF AFORESAID DISTINCTION BETWEE N LOAN AND DEPOSIT, ESPECIALLY WHEN THERE IS NOTHING TO SUGGEST IN THE CASE UNDER CONSIDERATION THAT THE AFORESAID TRANSACTIONS ARE I N THE NATURE OF LOAN OR DEPOSIT, WE ARE OF THE OPINION THAT PROVISI ONS OF SEC. 269SS ARE NOT ATTRACTED IN THIS CASE. 5.3. WE MAY POINT OUT THAT THE PROVISIONS OF SECTION 269SS & 269T WERE BROUGHT IN THE STATUTE BOOK TO COUNTER T HE EVASION OF TAX IN CERTAIN CASES, AS CLEARLY STATED IN THE HEADING OF CHAPTER XXB OF THE ACT WHICH READS 'REQUIREMENT AS TO MODE OF ITA N OS.3007-4445 /DEL./2010 8 ACCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX'. THE LEGISLATIVE INT ENTION IN BRINGING SECTIONS 269SS & 269T IN THE ACT WAS TO AV OID CERTAIN CIRCUMSTANCES OF TAX EVASION, WHEREBY HUGE TRANSACT IONS ARE MADE OUTSIDE THE BOOKS OF ACCOUNT BY WAY OF CASH. AS FAR AS THE APPEAL BEFORE US IS CONCERNED, THERE IS NO CASE AGAINST TH E ASSESSEE THAT THESE TRANSACTIONS HAD ANYTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME. IN THE INSTANT CASE, AS IS A PPARENT FROM THE PENALTY ORDER, THERE WERE NUMBER OF TRANSACTIONS B ETWEEN THE ASSESSEE THROUGH ITS MD AND THE PARTIES REFERRED TO ABOVE. HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT V BHAGWATI PRASAD BAJORIA (HUF), 263 ITR 487 (GAUHATI) HELD THAT WHEN THERE IS AN IM MEDIATE NEED OF MONEY AND TO SATISFY THE IMMEDIATE REQUIREMENTS, THE PERSON APPROACHES THE MONEY-LENDER OR HIS FRIEND OR RELATIVE, WHO COULD LEND MONEY TO HIM TO SATISFY HIS IMMEDIATE REQUIREMENT, IN THOSE CIRCUMSTANCES IT CANNOT BE SA ID THAT THE TAXPAYER HAS ENTERED INTO A TRANSACTION TO AVOID THE PAYMENT OF TAX OR TO DEFRAUD THE REVENUE. IT WAS FURTHER HELD THAT THE ELEMENT OF MENSREA BEI NG NOT BORNE OUT FROM THE NATURE AND THE MANNER IN WHICH THE TRANSACTION WAS CARRIED OUT, THERE WAS NO JUSTIFICATION IN IMPOSING THE PENALTY U/S 271D OF THE ACT. 5.4 IN THE CASE OF M/S SUNFLOWER BUILDERS PVT. LTD. VS. DCIT, 61 ITD 227(PUNE), ACIT VS. GUJRAT AMBUJA PROTEINS LTD., 89 TTJ 324 (AHD.),ACIT VS. RUCHIKA CHEMICALS & INDUSTRIES PVT. LTD.,88 TTJ85(D EL),AND JAGVIJAY AUTO FINANCE PVT. LTD. VS. ACIT,52 ITD504(JAIPUR), THE I TAT HAVE CONSISTENTLY HELD THAT THE ACKNOWLEDGEMENT OF DEBT BY THE ASSESSEE-COMPAN Y BY PASSING A JOURNAL ENTRY IN ITS BOOKS OF ACCOUNT WOULD NOT COM E WITHIN THE AMBIT OF THE WORDS 'LOAN OR DEPOSIT' AS MENTIONED IN SECTION 269SS AND 269T OF THE ACT. SIMILAR VIEW WAS TAKEN IN THE CASE OF BOMBAY CONDUCTORS & ELECTR ICALS LTD. VS. DCIT,56 TTJ 580(AHD.). THIS DECISION OF THE ITAT HAS BEEN UPHEL D BY HONBLE HIGH COURT IN THE CASE OF CIT VS. BOMBAY CONDUCTORS & ELECTRICAL S LTD, 301 ITR 328(GUJ).A ITA N OS.3007-4445 /DEL./2010 9 SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDIC TIONAL HIGH COURT IN NOIDA TOLL BRIDGE CO. LTD.(SUPRA),FOLLOWED BY THE LD. CIT(A). 5.5 THE HONBLE APEX COURT, INTERPRETING THE P OWERS CONFERRED ON THE REVENUE UNDER SECTION 273B OF THE ACT IN ASST. DIRE CTOR OF INSPECTION (INVESTIGATION) V. KUM. A.B. SHANTHI [2002] 255 ITR 258 HELD THAT IF THERE WAS A GENUINE AND BONA FIDE TRANSACTION AND THE ASSESSEE COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT PAYEE CHEQUE OR DEMAND DRAFT FOR SOME BONA FIDE REASON, THE AUTHORITY VESTED WITH THE POWER TO IMPOSE PENAL TY HAS A DISCRETION NOT TO LEVY PENALTY . 5.6 IT IS WELL ESTABLISHED BY THE DECISION OF THE SUPREME COURT IN HINDUSTAN STEEL LTD. V. STATE OF ORISSA [1972] 83 I TR 26 THAT THE LIABILITY TO PAY PENALTY DOES NOT ARISE MERELY UPON PROOF OF DEFAULT IN COMPLYING WITH THE STATUTORY REQUIREMENTS AND AN OR DER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGA TION BEING THE RESULT OF A QUASI-CRIMINAL PROCEEDING, WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFI ANCE OF LAW OR WAS GUILTY OF CONDUCT, CONTUMACIOUS OR DISHONEST OR ACT ED IN CONSCIOUS DISREGARD OF ITS OBLIGATION, AND PENALTY WILL ALSO NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENAL TY SHOULD BE IMPOSED FOR FAILURE TO PERFORM THE STATUTORY OBLIGA TION, IT IS STATED, IS A MATTER OF DISCRETION OF THE AUTHORITY CONCERNED T O BE EXERCISED JUDICIALLY ON A CONSIDERATION OF ALL RELEVANT CIRCU MSTANCES AND EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY C OMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED. 6. IN VIEW OF THE FOREGOING, AND IN THE L IGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS, WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT . THEREFORE, BOTH IN LAW AS WELL AS ON FACTS, WE FIND THAT IMPO SITION OF PENALTY ITA N OS.3007-4445 /DEL./2010 10 UNDER SECTION 271 D OF THE ACT WAS NOT IN ORDER A ND THE LD. CIT(A) WAS JUSTIFIED IN CANCELLING THE PENALTY. IN VIEW THEREOF, GROUND NO.1 IS DISMISSED. 7. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE U S IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS DISMISSED. 8. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEFORE US. 9. IN THE RESULT, APPEAL IS DISMISSED. SD/- SD/- (R.P. TOLANI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. M/S INTEGRATED TECHNOLOGY LTD., C-24, DEFENCE CO LONY, NEW DELHI 2. INCOME TAX OFFICER,WARD- 11(4), ROOM NO.324,C.R. BUILDING, NEW DELHI 3. CIT(A)-XV, NEW DELHI. 4. CIT CONCERNED. 5. DR, ITAT,C BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT