Bhaskar & Co., Chaganacherry V. ACIT, Thiruvalla

ITA 620/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61563 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: C B M WARRIER

Judgement Text

1 ITA NO. 620/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 620/COCH/2010 (ASSESSMENT YEAR 2006-07) M/S BHASKAR & CO VS ADDL COMMISSIONER OF INCOME-T AX BPCL DEALERS, THENGANA THIRUVALLA RANGE, THIRU VALLA PERUMPANACHY, CHANGANACHERRY PAN : AAGFB4562N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CBM WARRIER RESPONDENT BY : SHRI ABHIMANYU SINGH YADAV DATE OF HEARING : 19-07-2012 DATE OF PRONOUNCEMENT : 27-07-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM DATED 14-09-2010 CONFI RMING THE PENALTY LEVIED BY THE ADDL C.I.T. U/S 271D OF THE ACT FOR ASSESSME NT YEAR 2006-07. 2. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271D O N THE GROUND THAT THE ASSESSEE HAS RECEIVED MONEY EXCEEDING RS.20,000. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE HAS IN FACT RECEIVED THE MONEY; HOWEVER, I T WAS FOR SUFFICIENT CAUSE. 2 ITA NO. 620/COCH/2010 REFERRING TO THE PAPER BOOK, THE LD.REPRESENTATIVE S UBMITTED THAT THE ASSESSEE NEEDED MONEY URGENTLY FOR OBTAINING DEMAND DRAFT, T HEREFORE, THE ASSESSEE HAD TO NECESSARILY BORROW FUNDS FROM RELATIVES AND FRIE NDS FOR OBTAINING DEMAND DRAFT. REFERRING TO PAGE 1 OF THE PAPER BOOK, THE L D.REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS TABULATED THE CASH AVAILABLE AT HAND, THE AMOUNT REQUIRED FOR OBTAINING THE DEMAND DRAFT AND THE BALANCE MONE Y TO BE BORROWED FROM FRIENDS AND RELATIVES. ACCORDING TO THE LD.REPRESE NTATIVE, THE ASSESSEE HAS ALSO FILED THE COPIES OF THE CASH BOOK WHICH SHOWS THAT T HE CASH WAS BORROWED URGENTLY FOR THE PURPOSE OF OBTAINING DEMAND DRAFT. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE MONEY WAS BORROWED FOR BUSIN ESS NECESSITY. THEREFORE, THERE IS NO QUESTION OF LEVY OF PENALTY U/S 271D. WE HAVE HEARD SHRI ABHIMANYU SINGH YADAV, THE LD.DR ALSO. 3. ON GOING THROUGH THE ORDER OF THE ADDL COMMISSIO NER LEVYING THE PENALTY IT APPEARS THAT THE ASSESSEE HAS FILED AN EXPLANATI ON THROUGH HIS REPRESENTATIVE ON 25-03-2008. ACCORDING TO THE ASSESSEE, THE LOANS FROM CLOSE RELATIVES AND FRIENDS WERE OBTAINED TO MEET THE URGENT NEEDS OF G ENUINE BUSINESS TRANSACTION. THEREFORE, THERE CANNOT BE ANY LEVY OF PENALTY. TH IS EXPLANATION OF THE ASSESSEE WAS NOT CONSIDERED BY THE ADDL.COMMISSIONER WHILE L EVYING THE PENALTY. THE COMMISSIONER OF INCOME-TAX(A) ALSO HAS NOT CONSIDERE D THE EXPLANATION FILED BY THE ASSESSEE BEFORE THE ADDL COMMISSIONER AT THE TI ME OF LEVYING PENALTY. THIS TRIBUNAL IS OF THE OPINION THAT THE EXPLANATION OF THE ASSESSEE THAT FOR URGENT BUSINESS NEEDS THE MONEY WAS BORROWED NEEDS TO BE E XAMINED BEFORE TAKING A DECISION WHETHER THE MONEY WAS BORROWED FOR SUFFICI ENT REASON OR NOT. SINCE THE EXPLANATION OF THE ASSESSEE WAS NOT CONSIDERED BY T HE LOWER AUTHORITIES, THIS TRIBUNAL IS OF THE OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ORIGINAL AUTHORITY, WHO LEVIED THE PENALTY. ACCORD INGLY, THE ORDERS OF LOWER 3 ITA NO. 620/COCH/2010 AUTHORITIES ARE SET ASIDE AND THE ISSUE OF PENALTY IS REMITTED BACK TO THE FILE OF THE ADDL COMMISSIONER OF INCOME-TAX. THE ADDL COMMI SSIONER OF INCOME-TAX SHALL RE-EXAMINE THE ISSUE IN THE LIGHT OF EXPLANATI ON OF THE ASSESSEE THAT THE MONEY WAS BORROWED FOR URGENT BUSINESS NEEDS AND TH EN DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY TO THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH JULY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 27 TH JULY, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH