DCIT,Central Circle - 6, Hyderabad V. Sri. G. Sanjay Chowdary, Hyderabad

ITA 624/HYD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7623 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BALAI NAMAN JAIN
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.624, 625, 627 & 628/HYD/2014 ASSESSMENT YEARS: 2005-06 TO 2008-09 RESPECTIVELY DCIT CENTRAL CIRCLE-6 HYDERABAD VS. SRI G. SANJAY CHOWDARY HYDERABAD PAN NO.AVIPS 9257L (APPELLANT) (RESPONDENT) FOR REVENUE : MR. SOLGY JOSE T. KOTTARAM FOR ASSESSEE : MR. BALAI NAMAN JAIN DATE OF HEARING : 13.08.2014 DATE OF PRONOUNCEMENT : 20.08.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS BUNCH OF FOUR APPEALS FILED BY THE DEPARTMEN T IN CASE OF THE ASSESSEE ARE DIRECTED AGAINST THE OR DER OF CIT(A)-I HYDERABAD DATED 22.1.2014 CANCELLING THE P ENALTIES IMPOSED U/S 271D OF THE INCOME-TAX ACT, 1961 INTERA LIA FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09. SINCE COM MON FACTORS ARE INVOLVED, THESE APPEALS ARE BEING DISPO SED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. WH ILE FINALIZING THE ASSESSMENTS FOR THE YEARS UNDER APPE AL NOTICED THAT THE ASSESSEE HAS RECEIVED CASH LOANS OF RS.39, 03,600/-, RS.2,12,21,776/-, RS.1,74,85,397/- & RS.2,06,87,191 /- RESPECTIVELY FOR THE ASSESSMENT YEARS 2005-06 TO 20 08-09 FROM M/S. LAHARI GREEN PARK IN THE ACCOUNTING PERIOD CON CERNED, 2 ITA.NOS.624,625,627&628/HYD/2014 SRI G. SANJAY CHOWDARY, HYDERABAD WHICH WAS UTILIZED FOR PURCHASE OF LAND. ON APPEAL AGAINST THE ADDITIONS MADE IN THAT BEHALF BY THE A.O. IN THE QU ANTUM PROCEEDINGS U/S 68 OF THE ACT, THE CIT(A) DELETED T HE SAID ADDITIONS OBSERVING THAT AS PER THE RECEIPTS AND PA YMENTS STATEMENT FILED BY THE ASSESSEE HIMSELF CASH LOANS WERE TAKEN BY THE ASSESSEE FROM M/S. LAHARI GREEN PARK. HE HO WEVER OBSERVED THAT THERE WAS CONTRAVENTION OF THE PROVIS IONS OF SECTION 269SS OF THE ACT. ACCORDINGLY, PENALTY PRO CEEDINGS U/S 271D OF THE ACT WERE INITIATED BY THE A.O. 3. IN RESPONSE TO THE PENALTY NOTICE ISSUED BY THE A.O. IT WAS SUBMITTED THAT AS PER THE DECISION OF THE CIT(A ) IN THE QUANTUM PROCEEDINGS, THERE WAS NO CASH CREDIT U/S 6 8 AND THEREFORE NO VIOLATION OF SECTION 269SS OF THE ACT. IT WAS ALSO SUBMITTED THAT THE LAND WAS PURCHASED IN THE NAME O F THE ASSESSEE AND THE PAYMENT WAS MADE BY M/S. LAHARI GR EEN PARK. AT THE END OF THE YEAR, WHEN THE LAND WAS RE GISTERD, LAND A/C WAS DEBITED IN THE BOOKS OF M/S. LAHARI GREEN P ARK AND THE PARTYS A/C, IN WHOSE NAME THE SAME WAS PURCHAS ED, WAS CREDITED. IT WAS THEREFORE, ARGUED THAT NO CASH LO AN WAS RECEIVED SO AS TO SAY THAT THERE WAS ANY CONTRAVENT ION OF SEC.269SS. NOT CONVINCED WITH THE EXPLANATION OF T HE ASSESSEE, THE A.O. IMPOSED THE PENALTIES IN QUESTIO N U/S 271D OF THE ACT VIDE SEPARATE ORDERS DATED 29.5.2012 FOR ALL THE FOUR YEARS UNDER APPEAL. 4. ON APPEAL, THE CIT(A) CONSIDERING THE FACT THAT PENALTY IMPOSED U/S 271D OF THE ACT IN THE CASE OF SMT. G. VENKATALAKSHMI, MOTHER OF THE ASSESSEE AND ONE OF T HE LAHIRI GROUP CASES HAS COME UP FOR ADJUDICATION BEFORE THI S TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 9.11.2012 IN ITA NO.1135/HYD/2012, HAS CANCELED THE IMPUGNED PENALTI ES SUBJECT TO VERIFICATION BY THE A.O. IN THE FOLLOWIN G MANNER: 3 ITA.NOS.624,625,627&628/HYD/2014 SRI G. SANJAY CHOWDARY, HYDERABAD 6.1 SINCE FACTS ARE SIMILAR IN THE CASE OF APPELL ANT TO THAT OF SMT. G. VENKATALAKSHMI IN THE ASST. YEARS 2 004-05, 2006-07 & 2008-09, RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE JURISDICTIONAL INCOME-TAX APPELLATE TRIBUNA L IN THE CASE OF SMT. G. VENKATALAKSHMI FOR THE ASSESSMENT YEAR 2 005-06 AND ALSO ASSESSMENT YEAR 2003-04 STATED ABOVE, THE ASSESSING OFFICER IS DIRECTED TO VERIFY WHETHER IN THESE YEAR S ALSO THE APPELLANT HAD ACTUALLY RECEIVED CASH LOAN FROM M/S. LAHARI GREEN PARK OR THEY WERE MERE JOURNAL ENTRIES TO THA T EFFECT AND IF IT IS ULTIMATELY FOUND THAT NO CASH LOAN WAS ACTUAL LY RECEIVED BY THE APPELLANT IN THAT COURSE OF TRANSACTION AND THE Y WERE ONLY JOURNAL ENTRIES TO THAT EFFECT, THE PENALTY U/S 271 D LEVIED IN THESE YEARS ALSO SHALL STAND CANCELLED. THE GROUNDS TAKEN IN THESE APPEALS ARE THEREFORE DECIDED IN FAVOUR OF TH E APPELLANT, SUBJECT TO VERIFICATION ON THE LINES DIR ECTED BY THE HONBLE ITAT AS DISCUSSED ABOVE. 5. AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A), REVE NUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH PARTIES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE RELATI NG TO JUSTIFICATION FOR THE PENALTIES U/S 271D OF THE ACT IN IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE HAS COME UP BEF ORE THE TRIBUNAL IN THE CASE OF ASSESSEES MOTHER SMT. G. V ENKATA LAKSHMI AND ANOTHER (IN ITA NOS. 1808 TO 1810/HYD/1 3 & ITA NOS.1814 TO 1816/HYD/13 DATED 17.4.2014) BESIDES IN THE CASE RELIED UPON BY THE CIT(A) IN THE IMPUGNED ORDE R. IN ITS RECENT ORDER DATED 17.4.2014, COPY OF WHICH IS FILE D BEFORE US, THE COORDINATE BENCH OF THE TRIBUNAL HAS DECIDED TH E ISSUE IN THE FOLLOWING MANNER: 8. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AN D PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WE HAVE ALSO PERUSED THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO.394/HYD/13 DATED 12.7.2013 AS WE LL AS JUDGEMENT OF HONBLE A.P. HIGH COURT IN ITTA NO.12 OF 2014 CONFIRMING THE ORDER OF THE COORDINATE BENCH (SUPRA ). AS CAN BE SEEN FROM FACTS ON RECORD, IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS NOT TAKEN ANY CASH LOAN BUT I T IS MERELY AN ADJUSTMENT BY WAY OF JOURNAL ENTRIES. THE COORD INATE BENCH WHILE CONSIDERING IDENTICAL ISSUE IN ITA NO.394/HYD /13 AND IN ITA NO.1135/HYD/12 (SUPRA) DIRECTED THE ASSESSING O FFICER TO 4 ITA.NOS.624,625,627&628/HYD/2014 SRI G. SANJAY CHOWDARY, HYDERABAD VERIFY AND DELETE THE PENALTY IMPOSED U/S 271D OF T HE ACT IF IT IS FOUND TO BE MERELY AN ADJUSTMENT BY WAY OF JOURNAL ENTRY. THE AFORESAID ORDER OF THE COORDINATE BENCH WAS CONFIRM ED BY THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) HOLDING A S UNDER:- WE HAVE CHECKED UP THE RECORD FROM WHICH IT APPEARS THAT THE LEARNED TRIBUNAL HAS NOT DECIDED ANYTHING NEW IN THIS MATTER. RATHER, IT RELIED ON ITS OWN JUDGEMENT ON AN IDENTICAL ISSUE RENDERED IN A PREVI OUS CASE ON 9.11.2012. IT IS SAID THAT AGAINST THE SAI D ORDER, AN APPEAL HAS BEEN FILED. BUT, WE DO NOT FIND ANY DIFFICULTY TO DECIDE THE ISSUE AS A WHOLE AS THE RE LEVANT FINDINGS OF THE PREVIOUS JUDGEMENT HAVE BEEN EXTRAC TED AND THERE IS NO DISPUTE THAT THE SAME IS ACCURATE O R INCORRECT. HENCE, WE CAN SAFELY RELY ON THE SAME. WE HAVE READ THE REASONING RENDERED IN THE PREVIOUS JUDGEMENT. IT APPEARS THAT THE ASSESSEE CHALLENGED THE PENALTY PROCEEDINGS INITIATED U/S 271D OF THE INCOM E-TAX ACT, 1961 ON THE GROUND OF ILLEGAL BORROWINGS IN CONTRAVENTION OF SECTION 269SS OF THE ACT. THE LEA RNED TRIBUNAL ON AN EARLIER OCCASION FOUND THAT THERE IS NO PROOF OF RECEIPT OF SUCH LOAN FROM THE RECORDS AND THEY WERE ONLY FOUND TO BE JOURNAL ENTRIES. THE LEARNED TRIBUNAL, IN OUR VIEW, CORRECTLY OBSERVED THAT RELY ING ON AN ENTRY IN THE JOURNAL, NO PENALTY PROCEEDINGS CAN BE INITIATED. HENCE, IT WAS SENT FOR CLARIFICATION WH ETHER ACTUAL FLOW OF MONEY DID TAKE PLACE. THEREFORE, TH E MATTER WAS REMANDED AND NO DECISION WAS TAKEN ON MERIT. WE FIND THAT THE LEARNED TRIBUNAL HAS CORRECTLY DECIDED THE SAME. HENCE, WE DO NOT FIND ANY REASON TO ADMIT THIS MATTER FOR SETTING THE ISSUE. THE APPEAL IS DISMISSED. THEREFORE, THE CIT(A) HAVING FOLLOWED THE ORDER OF THE COORDINATE BENCH AND DIRECTED THE ASSESSING OFFICER TO VERIFY AND DELETE THE PENALTY IN CASE IT IS FOUND AS MERELY JOURNAL ENTRI ES AND NO CASH LOANS WAS TAKEN, THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) FOR ALL THE YEARS UNDER CONSIDERATION. 7. FACTS AND CIRCUMSTANCES OF THE CASE BEING IDENTI CAL, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT( A) WHICH IS IN CONSONANCE WITH THE EARLIER DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL DATED 9.11.2012. WE ACCORDINGLY UP HOLD THE 5 ITA.NOS.624,625,627&628/HYD/2014 SRI G. SANJAY CHOWDARY, HYDERABAD IMPUGNED ORDER OF THE CIT(A) AND REJECT THE GROUNDS OF THE REVENUE IN THESE APPEALS. 8. IN THE RESULT, ALL THE FOUR APPEALS OF THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH AUGUST, 2014. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAI AH) JUDICIAL MEMBER ACOUNTANT MEMBE R HYDERABAD, DATE 20 TH AUGUST, 2014 VG/SPS COPY TO : 1. THE DCIT (CENTRAL CIRCLE-6), HYDERABAD 2. SRI G. SANJAY CHOWDARY, PLOT NO.723/A,ROAD NO.37 , JUBILEE HILLS, HYDERABAD 3. THE CIT(CENTRAL), HYDERABAD 4. THE CIT(A)-I, HYDERABAD 5. D.R. ITAT, B BENCH, HYDERABAD.