Tej Narayan Agarwal, Hyd, Hyderabad V. Addl.CIT, Range-8, Hyd, Hyderabad

ITA 563/HYD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6445 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-07-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARMADA
• Assessee Lawyers: K A SAI PRASAD

Judgement Text

ITA NOS 1378 OF 2015 AND 563 OF 2016 TEJ NARAYAN A GARWAL HYDERABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS.1378/HYD/2015 & 563/HYD/2016 (ASSESSMENT YEAR: 2010-11) SHRI TEJ NARAYAN AGARWAL HYDERABAD PAN: AFFPA0999G VS ADDL. CIT, RANGE-8 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.A. SAI PRASAD FOR REVENUE : SMT. M. NARMADA, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE ASSESSEES APPEALS FOR THE A.Y 2010-11 AGAINST THE ORDER OF THE CIT(A)-2, HYDERABAD DATED 25.01.2016 CONFIRMING THE LEVY OF PENALTY U/S 271D AND 271E OF THE IT ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL AGAINST THE LEVY OF PENALTY U/S 271E OF THE ACT: 1. THE ORDER OF THE LEARNED CIT (A) CONFIRMING THE PENALTY OF RS.6,29,000 LEVIED U/S 271E IS NOT CORRECT EITHER O N FACTS OR IN LAW AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF SECTION 269T WERE NOT APPLICABLE TO T HE AMOUNTS PAID IN CASH BY THE APPELLANT. 3. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE APPELLANTS CLAIM THAT THE AMOUNTS IN QUESTION A RE DATE OF HEARING: 17.07.2018 DATE OF PRONOUNCEMENT: 2 7 . 0 7 .2018 ITA NOS 1378 OF 2015 AND 563 OF 2016 TEJ NARAYAN A GARWAL HYDERABAD. PAGE 2 OF 5 NEITHER LOANS NOR ADVANCES AND HENCE THE LEVY OF PE NALTY U/S 271E IS UNJUSTIFIED. 4. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE CIRCUMSTANCES UNDER WHICH THE AMOUNTS WERE PAID IN CASH BY THE APPELLANT. 3. AGAINST THE ORDER OF THE CIT (A) CONFIRMING THE PENALTY U/S 271D, THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT (A) CONFIRMING THE PENALTY OF RS.6,29,000 LEVIED U/S 271D IS NOT CORRECT EITHE R ON FACTS OR IN LAW AND IN BOTH. 2. THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE FACT THAT PROPER OPPORTUNITY WAS NOT ACCORDED BEFORE LEVYING PENALTY U/S 271D OF THE I.T . ACT. 3. THE LEARNED CIT (A) IS NOT JUSTIFIED IN NOT APPR ECIATING THE CIRCUMSTANCES UNDER WHICH CASH LOANS WERE TAKEN BY THE APPELLANT . 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2010-11 ON 10.07.2010 ADMITTING TOTAL INCOME OF RS.4,49,790. T HE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S 14 3(3) WAS ISSUED TO THE ASSESSEE ON 24.08.2007. THE ASSESSEE APPEARE D AND FURNISHED THE DETAILS CALLED FOR AND THE ASSESSMENT WAS COMPLETED BY MAKING AN ADDITION OF RS.3,66,047 TOWARDS THE SH ORT TERM CAPITAL GAIN WHICH WAS SET OFF AGAINST THE CARRIED FORWARD LOSS. SUBSEQUENTLY, THE AO INITIATED THE PENALTY PROCEEDI NGS U/S 271D AND ALSO U/S 271E OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS RECEIVED LOANS IN CASH AND ALSO REPAID THE LOANS IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 269SS AND 26 9T OF THE ACT. THE ASSESSEE SUBMITTED THAT HIS FAMILY MEMBERS HAD INTENDED TO PURCHASE A PROPERTY AND THEREFORE, THEY ENTERED INT O AN ITA NOS 1378 OF 2015 AND 563 OF 2016 TEJ NARAYAN A GARWAL HYDERABAD. PAGE 3 OF 5 AGREEMENT OF SALE AND HAD REQUESTED THE ASSESSEE TO TAKE OUT A D.D AND CONSEQUENTLY HAD RECEIVED A SUM OF RS.6,29, 000 AND THE ASSESSEE HAD TAKEN OUT THE DD ACCORDINGLY. BUT, SIN CE THE TRANSACTION DID NOT GO THROUGH, THE DDS WERE CANCEL LED AND THE AMOUNTS WERE REPAID TO HIS CHILDREN, AND THEREFORE, THE TRANSACTION IS NOT A LOAN AND THE PENALTY IS NOT LE VIABLE. THE AO, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION A ND OBSERVED THAT THE TRANSACTION DOES NOT FALL IN ANY OF THE EX EMPTIONS LAID DOWN U/S 269SS AND 269(T) OF THE ACT AND THEREFORE, PENALTY IS LEVIABLE. HE, ACCORDINGLY LEVIED PENALTY U/S 271E A ND 271D OF THE ACT AGAINST WHICH THE ASSESSEE PREFERRED APPEALS BE FORE THE CIT (A). THE CIT (A) HOWEVER, CONFIRMED THE PENALTY LEV IED BY THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE EXPLA INING THE TRANSACTION, HAS REFERRED TO THE COPY OF THE AG REEMENT OF SALE DATED 26.08.2009, WHEREIN ALL THE PARTIES (WHO ARE ALLEGED TO HAVE GIVEN LOANS TO THE ASSESSEE I.E. THE SONS AND DAUGH TERS-IN-LAW OF THE ASSESSEE) HAVE ENTERED INTO AN AGREEMENT FOR PU RCHASE OF A PROPERTY AND HAVE ALSO PAID PART OF THE CONSIDERATI ON BY CHEQUES AND PART OF THE CONSIDERATION BY WAY OF CASH. HE HA S ALSO DRAWN OUR ATTENTION TO THE DD FOR AN AMOUNT OF RS.5,55,00 0 DRAWN IN FAVOUR OF STAMP DUTY COLLECTION ACCOUNT AND DD FOR AN AMOUNT OF RS.74,000 DRAWN IN FAVOUR OF CTO N S ROAD, AND THE PAY SLIPS TO SHOW THAT THE AMOUNTS WERE UTILIZED FOR PURCHASE OF THE DDS. HE HAS ALSO DRAWN OUR ATTENTION TO THE AXIS BANK A/C O F THE ASSESSEE WHEREIN THE TRANSACTION OF PURCHASE OF DDS AFTER THE DEPOSIT OF THE AMOUNT AND ALSO CANCELLATION OF THE DDS THEREAFTER ARE REFLECTED. ACCORDING TO THE LEARNED COUNSEL, TH E ABOVE ITA NOS 1378 OF 2015 AND 563 OF 2016 TEJ NARAYAN A GARWAL HYDERABAD. PAGE 4 OF 5 TRANSACTION CANNOT BE CONSIDERED AS A LOAN OR ADVAN CE REFERRED TO IN SECTION 269SS AND 269T OF THE ACT. HE SUBMITTED THAT THE DDS WERE PURCHASED BY THE ASSESSEE SINCE HE WAS A PREMI UM MEMBER OF THE AXIS BANK AND THE DD CHARGES WERE NOT PAYABL E FOR THE DDS PURCHASED BY HIM. HE SUBMITTED THAT IT WAS ONLY A TRANSACTION OF CONVENIENCE AND NOT A LOAN OR ADVANC E AS HELD BY THE AO AND THEREFORE, BOTH THE PENALTIES SHOULD BE DELETED. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE CIT (A). 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD FURNISHED ALL THE NECESSARY DETAILS OF THE TRANSACTION BEFORE THE CIT (A), BUT THE CIT (A) HAS FAILED TO CONSIDER THE DETAILS FILED BY THE ASSESSEE. ON EXAMINATION OF THE DOCUMENTS FILED BY THE ASSESSEE, WE ARE CONVINCED THAT THE AMOUNT RECEIVED AND REPAID BY TH E ASSESSEE SUBSEQUENTLY IS NOT A LOAN. THIS IS A TRANSACTION DONE ON BEHALF OF HIS CHILDREN TO ACCOMMODATE THAN IN OBTAINING DD S WITHOUT CHARGES AND CANNOT BE CONSIDERED AS TAKING OF LOAN OR REPAYMENT OF LOAN IN CASH. THE DECISIONS RELIED UPON BY THE L EARNED COUNSEL FOR THE ASSESSEE, I.E. CIT VS. DECCAN DESIGNS (INDI A) P LTD REPORTED IN 347 ITR 580 (MAD) AND ALSO IN THE CASE OF DIRECT OR OF INCOME TAX (EXEMPTION) VS. ALL INDIA DEAF AND DUMB SOCIETY REPORTED IN 283 ITR 113 (DEL) ARE TO THE EFFECT THAT WHERE THE TRANSACTIONS ARE GENUINE AND ENOUGH REASONS ARE OFFERED BY THE ASSES SEE TO JUSTIFY THE CASH TRANSACTION, THE PENALTY IS NOT LEVIABLE B OTH U/S 271D ITA NOS 1378 OF 2015 AND 563 OF 2016 TEJ NARAYAN A GARWAL HYDERABAD. PAGE 5 OF 5 AND 271E OF THE ACT. IN VIEW OF THE SAME, THE ASSES SEES APPEALS ARE ALLOWED. 8. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED JULY 2018. VINODAN/SPS COPY TO: 1 C/O CH. PARTHASARATHY & CO. 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA A VENUE, STREET NO.1, ASHOKNAGAR, HYDERABAD 500020 2 ADDL. CIT, RANGE - 8 HYDERABAD 3 CIT (A)-2, HYDERABAD 4 PR. CIT 2, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER