ACIT, New Delhi V. M/s. Bentex Control & Switchgear Co., New Delhi

ITA 6383/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97165 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: SSH R S SINGHVI; SATYAJEET CAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO S . 6382 & 6383 /DEL/201 3 ASSESSMENT YEAR: 2009 - 10 ACIT, CIRCLE - 27(1), VS. BENTEX CONTROL & SWITCHGEAR CO., NEW DELHI B - 65/3, NARAINA INDL. AREA, NEW DELHI (PAN: AAAFB6531D) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V.R. SONBHADRA, SR.DR RESPONDENT BY : S/SH. R.S. SINGHVI & SATYAJEET, CAS DATE OF HEARING: 16.07.2015 DATE OF PRONOUNCEMENT: 04.09.2015 ORDER PER INTURI RAMA RAO, A.M. : THESE APPEALS ARE DIRECTED AGAINST DIFFERENT ORDER S OF CIT(A), EACH DATED 25.09.2013 PASSED FOR THE ASSESSMENT YEAR 2009 - 10. SINCE COMMON GROUNDS OF APPEAL , EXCEPT DIFFERENCE IN AMOUNT, RAISED IN BOTH THE APPEALS, WE PROCEED TO DECIDE THE APPEAL S BY A CONSOLIDATED ORDER. THE GROUNDS OF APPEAL RAISED IN ITA NO. 6382/DEL/2013 READ AS UNDER: I. DELETING THE PENALTY OF RS. 6,96,000/ - IMPOSE BY THE JCIT U/S 271E WHERE THE ASSESSEE PAID LOAN IN CASH WHICH IS EVIDENT IN ITS REPLY DURING THE PROCESS OF PENALTY. II. FAILED TO CONSIDER THE FACT THAT SECTION 271E CLEAR LY INDICATES IF A PERSON REPAYS ANY LOAN OR DEPOSIT REFERRED TO IN SECTION 269T OTHERWISE THEN IN ACCORDANCE WITH THE PROVISIONS OF THAT SECTION, HE SHALL BE LIABLE TO PAY, BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT OF THE LOAN OR DEPOSIT SO REPAID MAY B E LEVIED BY THE JOINT COMMISSIONER. 2 III. IGNORING THE FACTS THAT THE AMOUNT WAS NOT RETURNED IMMEDIATELY AFTER THE MISTAKE HAPPENED. IV. NOT CONSIDERING THE FACT THAT THE ASSESSEE ALSO RETURNED THE LOAN IN CASH. V. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY OTHER GROUND OF APPEAL. 2. FOR THE SAKE OF CONVENIENCE AND BREVITY, THE FACTS IN ITA NO. 6382/DEL/2013 ARE STATED AS UNDER: 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS A PARTNERSHIP FIRM CARRYING ON THE BUSINESS OF MANUFACTURING, SALE AND PURCHASE OF ELECTRICAL GOODS SUCH AS ELECTRICAL MOTORS, STARTERS, ELECTRICAL METER, MCB AND OTHER ELECTRICAL GOODS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESS ING OFFICER NOTICED THAT THE RESPONDENT ASSESSEE HAD TAKEN LOAN OF RS. 5 LAKHS ON 14.10.200 8 AND REPAID A SUM OF RS. 6,96,000/ - IN CASH ON 21.11.2008. ACCORDING TO THE ASSESSING OFFICER, THESE TRANSACTIONS ARE IN THE NATURE OF CONTRAVENTION OF PROVISIONS OF SECTION 269T OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) . RESPONDENT ASSESSEE WAS I SSUED SHOW CAUSE NOTICE THAT AS TO WHY THE PENALTY UNDER SECTION 271E OF THE ACT SHOULD NOT BE IMPOSED. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THERE WAS NO CONTRAVENTION OF PROVISIONS OF SECTION 269 SS OR SECTION 269T OF THE ACT, AS THE ASSESSEE HAS NEITHER RECEIVED ANY LOAN NOR DEPOSITED IN CASH, NOR RETURNED ANY CASH. THE ALLEGED CASH LOAN OF RS. 5 LAKHS IS ONLY ON ACCOUNT OF WRONG ENTRY MADE IN THE BOOKS OF ACCOUNT. IT WAS STATED THAT A SUM OF RS. 5 LAKHS WAS WITHDRAWN FROM BANK ACCOUNT OF KARAN TECHNOFAB ON 14.10.2008 FOR THE PURPOSE OF PAYING CONVERSION CHARGED TO THE DDA IN RESPECT OF PROPERTY OF THE COMPANY IN MAYAPURI. THE AMOUNT WAS WITHDRAWN AND WAS REMAINING WITH THE ACCOUNTANT GENERAL AND THE ACCOUNTANT 3 GENERAL INADVERTE NTLY ENTERED RS. 5 LAKHS AS LOAN RECEIVED FROM M/S KARAN TECHNOFAB IN THE BOOKS OF ASSESSEE FIRM AND CASH OF RS. 5 LAKHS WAS DEPOSITED BACK IN THE BANK ACCOUNT OF THE COMPANY ON 21.11.2008 ALONG WITH RS. 1,96,000/ - BY THE ASSESSEE FROM ITS OWN ACCOUNT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS NOT IN NEED OF ANY CASH AS THE ASSESSEE ITSELF HAD ENOUGH CASH IN HAND, IN SUPPORT OF THIS, COMPUTER GENERATE CASH - IN - HAND STATEMENT WAS SUBMITTED. EVEN OTHERWISE, IT WAS SUBMITTED THAT IT WAS NOT A LOAN TRANSAC TION. IT IS IN THE NATURE OF CURRENT ACCOUNT TRANSACTION AND THEREFORE, THE VIGOUR OF THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT CANNOT BE APPLIED. THE ASSESSING OFFICER BRUSHING ASIDE THE EXPLANATION, LEVIED A PENALTY OF RS. 6,69,000/ - VIDE HIS O RDER DATED 26.06.2012. BEING AGGRIEVED, AN APPEAL WAS FILED BEFORE THE CIT(A), WHO VIDE ORDER DATED 25 TH SEPTEMBER, 2013 DELETED THE PENALTY BY HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LD. AR AND HAVE GONE THROUGH THE ASSE SSMENT ORDER. IN THE APPELLANT S CASE FOR THE SAME ASSESSMENT YEAR 2009 - 10, I HAVE ALREADY HELD IN APPEAL NO. 126/12 - 13 THAT THE AMOUNT OF RS. 5,00,000/ - WHICH WAS ALLEGEDLY REPAID BY THE APPELLANT ALONG WITH A FURTHER SUM OF RS. 1,96,000/ - TO ITS SISTER C ONCERN M/S KARAN TECHNOFAB LTD. WAS EITHER A LOAN OR DEPOSIT, HENCE SECTION 269T IS NOT APPLICABLE ON THIS TRANSACTION. IT WAS NOTED THAT A SUM OF RS. 5,00,000/ - WAS WITHDRAWN FROM THE BANK ACCOUNT OF KARAN TECHNOFAB ON 14.10.2008 FOR THE PURPOSE OF PAYING CONVERSION CHARGES TO THE DDA IN RESPECT OF PROPERTY OF THE COMPANY IN MAYAPURI. HOWEVER, DUE TO CERTAIN UNRESOLVED ISSUE WITH THE DDA, THE PROCESS OF CONVERSION WAS DELAYED AND THE AMOUNT REMAINED IN THE PHYSICAL POSSESSING F THE CASHIER/ACCOUNTANT OF TH E FIRM. THE CASHIER/ACCOUNTANT OF THE FIRM WERE ALSO LOOKING AFTER THE ACCOUNTS AND THE OTHER MATTERS OF THE SAID COMPANY. THE CASHIER/ACCOUNTANT INADVERTENTLY ENTERED THIS RS. 5,00,000/ - IN THE BOOKS OF THE ASSESSEE FIRM AS RECEIPT FROM KARAN TECHNOFAB IN STEAD OF KEEPING THE SAME IN THE BOOKS OF THE COMPANY OR TREATING THE SAME AS INTEREST AMOUNT. IT WAS ALSO NOTED THAT THE APPELLANT FIRM WAS NOT IN NEED OF MONEY. 4 THERE WAS OPENING CASH IN HAND OF RS. 14,27,200/ - ON 14.10.2008 IN BOOKS OF THE APPELLANT FIR M ON THE DATE OF ALLEGED LOAN. THIS CASH OF RS. 5,00,000/ - WAS DEPOSITED BACK IN THE BANK ACCOUNT OF THE COMPANY ON 21.11.2008 ALONG WITH RS. 1,96,000/ - BY THE APPELLANT FROM ITS OWN ACCOUNT. THIS AMOUNT WAS DEPOSITED TO CLEAR THE CHEQUE PRESENTED ON 21.1 1.2008 AMOUNTING TO RS. 9,45,938/ - . I T WAS FURTHER NOTED THAT BETWEEN THESE TWO DATES I.E. BETWEEN 14.10.2008 AND 21.11.2008, THE CASH BALANCE ON EACH DATE WAS MORE THAN RS. 5,00,000/ - . HENCE, THE APPELLANT HAD NO REASON TO TAKE CASH LOAN OF RS. 5,00,000/ - AS THERE WAS NO REQUIREMENT OF ANY SUCH LOAN. AS THE APPELLANT HAD NOT RECEIVED ANY LOAN NOR REPAID IT IN CASH IN MY OPINION, THE QUESTION OF PENALTY U/S 271E OF THE ACT DOES NOT ARISE. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO DELETED THE IMPUGNED PENALTY U/S 271E OF RS. 6,96,000/ - . BEING AGGRIEVED FROM THE ABOVE ORDER, THE REVENUE IS BEFORE US WITH THE PRESENT APPEALS. 3. WE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE LEARNED CIT(A) HAD DELETED THE PENALTY AFTER PROPERLY APPRECIATING THE EVIDENCE ON RECORD. THE REVENUE HAD NOT BROUGHT ON RECORD ANY MATERIAL IN REBUTTAL OF THE SAME. THEREFORE, WE AGREE WITH THE PARITY OF THE REASONING OF CIT(A) AND HENCE, WE DISMISS BOTH THE APPEALS FILED BY THE REVENUE. 4. IN THE RESULT, BOTH THE APPEAL S ARE DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 4 T H SEPTEMBER , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 4 T H SEPTEMBER , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI