PANTHER FINCAP & MANGEMENT SERVICES LTD, MUMBAI V. ADDL CIT CEN CIR -6, MUMBAI

ITA 6081/MUM/2009

• Counselvise Citation: 608119914 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 6081/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. PANTHER FINCAP & MANAGEMENT ACIT, CENTRAL CIEC LE 40 SERVICES LTD. AAYAKAR BHAVAN, M.K. ROAD BHUPEN CHAMBES, GROUND FLOOR VS. MUMBAI 400020 9, DALAL STREET, FORT, MUMBAI PAN - AAACP 3045 APPELLANT RESPONDENT APPELLANT BY: SHRI RAJIV KHANDELWAL RESPONDENT BY: DR. P. DANIEL DATE OF HEARING: 19.09.2011 DATE OF PRONOUNCEMENT: 28.09.2011 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A), CENTRAL VII, MUMBAI DATED 25.08.2009 CONFIRMING THE PENALTY OF ` 30,64,571/- UNDER SECTION 271D OF THE I.T. ACT. 2. THE FACTS IN BRIEF ARE THAT THE A.O. NOTICED THAT T HE ASSESSEE HAD RECEIVED AN AMOUNT OF LOAN OF ` 30,64,571/- FROM M/S. NAKSHATRA SOFTWARE PVT. LTD. OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR DRAFT IN VIOLATION OF SECTION 269SS. ACCORDINGLY, A PENALTY OF ` 30,64,571/- UNDER SECTION 271D WAS LEVIED. THE ASSESSEES CONTENTION THAT THE ABOV E TRANSACTION OF LOAN WAS NOT IN CASH BUT THROUGH JOURNAL ENTRIES AND THEREFO RE PROVISIONS OF SECTION 269SS ARE NOT ATTRACTED WAS NOT ACCEPTED BY THE A.O . HE REFERRED TO THE JOINT PARLIAMENTARY COMMITTEES REPORT ON THE STOCK MARKET SCAM AND HELD THAT THE ASSESSEE AND THE ASSOCIATE GROUP ENTITIES IN CONNIVANCE WITH CERTAIN BANKERS AND FINANCIAL INSTITUTIONS WERE INDULGING I N LARGE SCALE MANIPULATION OF SHARE PRICES; THE ASSESSEE AND GROU P CONCERNS HAD EVADED INCIDENCE OF TAX IN VARIOUS HANDS. WITH REFERENCE T O THE ITAT DECISION ITA NO. 6081/MUM/2009 M/S. PANTHER FINCAP & MANAGEMENT SERVICES LTD. 2 CANCELLING THE PENALTY IN OTHER CASES THE A.O. HELD THAT THE DEPARTMENT HAD PREFERRED APPEAL BEFORE THE HON'BLE BOMBAY HIGH COU RT, WHICH WAS STILL PENDING. BEFORE THE CIT(A) THE LEARNED A.R. REITERA TED THE ARGUMENTS MADE BEFORE THE A.O.. 3. THE CIT(A), FOLLOWING THE ORDER IN ASSESSEE OWN CA SE IN EARLIER YEAR CONFIRMED THE PENALTY WITH OUT CONSIDERING THAT THE ITAT HAS ALREADY DELETED THE PENALTIES IN SIMILAR FACTS IN GROUP CASES, THE FACT OF WHICH STATED BY AO. 4. AT THE OUTSET IT WAS SUBMITTED THAT IN ASSESSEES O WN CASE IN A.Y. 2003-03 IN ITA NO. 539/MUM/2007 DATED 27.12.2007 TH E PENALTY LEVIED WAS CANCELLED. IN THAT CASE THE FINDINGS GIVEN IN I TA NO. 3166/MUM/2004 WERE CONSIDERED AND THE BENCH HELD AS UNDER: - THE FACTS AND CIRCUMSTANCES AND THE ARGUMENTS PLAC ED BEFORE US ARE IDENTICAL AS IN ITA NO. 3316/MUM/2004, ALREADY DISC USSED ABOVE. HERE ALSO PENALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER ON MAXIMUM BALANCE. ALL THE LOANS AND DEPOSITS ARE ONLY BY WAY OF PASSING JOURNAL ENTRIES AND THE ORIGINAL TRANSACTION IS, WITHOUT EX CEPTION THROUGH ACCOUNT-PAYEE CHEQUE/DRAFT. THE SCOPE AND EFFECT OF SECTION 269SS HAVE BEEN ELABORATED IN THE FOLLOWING PORTION OF TH E DEPARTMENT CIRCULAR NO. 387, DATED 6 TH JULY, 1984. SINCE THE ITAT FOLLOWED THE COORDINATE BENCH DECISI ON IN ASSESSEES OWN CASE IN EARLIER YEAR, WE RESPECTFULLY FOLLOWING THE ABOVE DECISIONS ON THE SAME REASONING THE PENALTY LEVIED UNDER SECTION 271 D OF THE ACT IS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2011. SD/- SD/- (B.R. MITTAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 28 TH SEPTEMBER 2011 ITA NO. 6081/MUM/2009 M/S. PANTHER FINCAP & MANAGEMENT SERVICES LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL - VII, MUMBAI 4. THE CIT CENTRAL - IV, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.