Dy. CIT,Cent. Cir., Aurangabad V. M/s. Rudrance Construction Co., Aurangabad

ITA 628/PUN/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9909 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH; K K OZHA
• Assessee Lawyers: ARVIND SONDE; S A MUKADAM
• Section: 143(3); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI R.K. PANDA, ACCOUNTANT MEMBER I.T.A. NO. 626 TO 628/PN/2010 ( A.Y. 2003-04 TO 2005-06 ) DEPUTY COMMISSIONER OF INCOME TAX, CENT. CIRCLE, AURANGABAD APPELLANT VS. M/S. RUDRANEE CONSTRUCTION CO. A-9 UDYAM BHAVAN, MIDC AREA, RAILWAY STATION ROAD AURANGABAD 431 005 PAN AAEFR 0447 G , RESPONDENT APPELLANT BY: SHRI S.K. SINGH AND SHRI K.K. OZHA RESPONDENT BY: SHRI ARVIND SONDE AND SHRI S.A. MUK ADAM DATE OF HEARING:11-10-2012 DATE OF PRONOUNCEMENT: 30-10-2012 ORDER PER BENCH THESE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINS T THE CONSOLIDATED ORDER OF CIT(A)-AURANGABAD DATED 2 9-1- 2010 FOR A.Y. 2003-04 TO 2006-07 RAISING COMMON ISS UE. SINCE ALL THE APPEALS RELATE TO THE SAME ASSESSEE A ND THE ISSUE INVOLVED IS ALSO COMMON, THEY WERE HEARD TOGE THER AND ARE BEING DECIDED BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2. THE ONLY ISSUE RAISED BY THE DEPARTMENT IN ALL THESE APPEALS IS WHETHER OR NOT THE CIT(A) WAS PAGE 2 OF 4 ITA NO. 626 TO 628/PN/2010 RUDRANCE CONSTRUCTION A.Y. 2003-04 TO 2005-06 JUSTIFIED IN DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271D OF THE INCOME-TAX ACT, 1961. THE ASSESSMENT YEARS INVOLVED ARE 2003-04 TO 2006-07. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE CIT(A) HAS DIS CUSSED AND DECIDED THIS ISSUE BY OBSERVING AS UNDER: IN VIEW OF THE ABOVE, ONCE THE UNACCOUNTED FUND WA S SURRENDERED BY THE ASSESSEE AND IT WAS ACCEPTED BY THE AO AS INCOME OF THE ASSESSEE, IT CEASED TO BE A LOA N AND THEREFORE, THE VERY FOUNDATION FOR INITIATING T HE PROCEEDINGS FOR AND LEVYING PENALTY U/S 271D WAS LO ST. THEREFORE, PENALTIES IMPOSED BY THE JCIT CENTRAL RANGE, NASIK U/S 271D R.W.S. 269SS ON THE BASIS OF ENTRIES RECORDED ON SEIZED REGISTERS MARKED AS ANNEXURE A-25, A-26, A-32 AND A-33 CANNOT BE SUSTAINED. ------------------ IN VIEW OF ABOVE, I CANCEL THE PENALTIES U/S 271D FOR A.Y. 2003-04, 2004-05 AND 2005-06. 4. FROM THIS, IT IS UNDISPUTED THAT ONCE UNACCOUNTE D FUNDS HAVE BEEN SURRENDERED BY THE ASSESSEE AND SAM E WAS ACCEPTED BY THE AO AS INCOME OF THE ASSESSEE HAD CE ASED TO BE LOAN, THEREFORE, THE VERY FOUNDATION FOR INITIAT ING THE PROCEEDINGS FOR LEVYING PENALTY U/S 271D IS LOST. THEREFORE, THE CIT(A) WAS JUSTIFIED IN CANCELLING THE PENALTY U/S 271D READ WITH SEC. 269T OF THE ACT. PAGE 3 OF 4 ITA NO. 626 TO 628/PN/2010 RUDRANCE CONSTRUCTION A.Y. 2003-04 TO 2005-06 5. IN THE RESULT ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED ON THE 30 TH OCTOBER 2012. SD/- SD/- (R.K. PANDA) ACCOUNTANT MEMBER ( SHAILEN DRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 30 TH OCTOBER 2012 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- AURANGABAD 4. THE CIT- AURANGABAD 5. THE D.R, B BENCH, PUNE 6. GUARD FILE BY ORDER SR. P.S. ITAT PUNE BENCH PAGE 4 OF 4 ITA NO. 626 TO 628/PN/2010 RUDRANCE CONSTRUCTION A.Y. 2003-04 TO 2005-06 HOWEVER, FACTS AND CIRCUMSTANCES OF THE CASE ARE TOTALLY DIFFERENT SO FAR AS PENALTY OF RS. 25 LAKHS IMPOSED ON THE ACCEPTANCE OF CASH/HUNDI LOANFROM SHRI KACHRULA L MUTHA IS CONCERNED. AS DISCUSSED ABOVE, DURING THE COURSE OF SURVEY PROCEEDINGS AT THE BUSINESS PREMISES OF S HRI KACHRULAL MUTHA THE CLINCHING EVIDENCES ESTABLISHIN G ACCEPTANCE OF CASH/HUNDI LOAN BY THE APPELLANT WAS RECOVERED. THE AFORESAID TRANSACTION WAS NEITHER R ECORDED IN SEIZED REGISTERS MARKED AS ANNEXURE A-25, A-26, A-32 AND A-33 NOR IN ANOTHER SET OF INCRIMINATING DOCUME NTS SEIZED AS PER ANNEXURE A-13, A-16, A-19, A-21, A-28 AND A- 40. THE AFORESAID HUNDI LOAN OF RS. 25 LAKHS WAS A LSO NOT OFFERED BY THE APPELLANT AS ITS UNDISCLOSED INCOME AND THE SAME WAS NOT ASSESSED BY THE AO TREATING AS UNACCOU NTED FUND OF THE APPELLANT. THE PERUSAL OF THE ASSESSMEN T ORDER PASSED U/S 143(3) BY THE AO FOR A.Y. 2006-07 SHOWS THAT THE AMOUNT WAS ADDED UNDER DEEMING PROVISIONS OF SE C. 69D. SINCE THE AMOUNT WAS NOT ACCEPTED AS UNDISCLO SED INCOME OF THE APPELLANT, MERELY ITS INCLUSION IN TA XABLE INCOME BY OPERATION OF DEEMING PROVISIONS OF SEC. 6 9D, WILL NOT CHANGE THE CHARACTER OF THE TRANSACTION. ON T HE BASIS OF AOS ACT OF ASSESSING THE AFORESAID AMOUNT U/S 6 9D IT CANNOT BE CLAIMED THAT HUNDI LOAN OF RS. 25 LAKH AC CEPTED BY THE APPELLANT FROM SHRI KACHRULAL MUTHA CEASES T O BE A LOAN AND THEREFORE, OUTSIDE THE PURVIEW OF PROVIOSN S OF SECTION 269SS. I THEREFORE, DO NOT FIND ANY INFIRM ITY IN JCIT CENTRL RANGE, NASIKS ACTION OF IMPOSING PENALTY U; /S 271D FOR NON-COMPLIANCE OF PROVISIONS OF SEC. 269SS BY T HE APPELLANT WHILE ACCEPTING HUNDI LOAN OF RS. 25 LAKH S FROM SHRI KACHRULAL MUTHA IN A.Y. 2006-07.