Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 5147 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-09-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
Not Allotted
Assessment Year
2011-2012
Appeal Filed On
24-07-2015
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL ; DS LE{K BEFORE:SHRI BHAGCHAND,AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 663/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 THE ITO WARD- 1(2),KOTA CUKE VS. M/S. SHAKTI FOUNDATION 112, SHAKTI NAGAR,KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAJTS 0560Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO. 45/JP/2015 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 663/JP/2015) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 M/S. SHAKTI FOUNDATION 112, SHAKTI NAGAR, KOTA CUKE VS. THE ITO WARD- 1(2),KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAJTS 0560Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA, ADDL. CIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY :SHRI VIJAY GOYAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/08/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 1/09/2016 VKNS'K@ ORDER PER BHAGHCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER O F THE LD. CIT(A), KOTA DATED 26-05-2015 FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS FILED A CROSS OBJECTION. ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 2 2. THE SOLITARY GROUND RAISED BY THE REVENUE IS A S UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE PENALTY OF RS. 82,56,589/- U/S 271 D OF THE I.T. ACT. THE LD. CIT(A) HAS FAILED TO APPRE CIATE THAT TAKING OR ACCEPTING OF LOAN/ DEPOSITS OF RS. 20,000 /- OR MORE BY WAY OF MODE OF PAYMENT OTHER THAN ACCOUNT PAYEE CHEQUE / DRAFT IS HIT BY THE PROVISIONS OF SECTION 269SS O F THE ACT. 2.1 BRIEF FACTS OF THE ISSUE IN QUESTION AS PER ORD ER DATED 27-11-2014 OF ADDL. CIT, RANGE-1 KOTA IS THAT THE ASSESSEE HAD RE CEIVED THE FOLLOWING LOANS IN VIOLATION OF PROVISIONS OF SECTION 269SS O F THE I.T. ACT. SN. NAME OF THE PERSON FROM WHOM LOANS/ DEPOSITS TAKEN ACCEPTED. DATE AMOUNT (RS.) 1. M/S. SANKALP FOUNDATION, KOTA 12-05-2010 20,00, 000/- 2. M/S. SANKALP FOUNDATION, KOTA 12-05-2010 11,00, 000/- 3. M/S. GOPI BAI FOUNDATION , KOTA 01-07-2010 49,5 6,589/- 4. M/S. GOP BAI FOUNDATION, KOTA 26-06-2010 2,00 ,000/ TOTAL 82 ,56,589 IT IS OBSERVED FROM THE ORDER OF THE ADDL. CIT, KOT A THAT M/S. SHAKTI FOUNDATION IS A SISTER CONCERN OF CAREER POINT INFR A LTD., SANKALP FOUNDATION AND GOPI BAI FOUNDATION .THE MAIN OBJECT S OF THE ASSESSEE TRUST ARE TO ACQUIRE LAND, DEVELOP AND USE INFRA FO R THE PURPOSE OF EDUCATIONAL ACTIVITY. THE ASSESSEE HAD SUBMITTED IT S EXPLANATION BEFORE THE ADDL. CIT, KOTA CONTENDING THAT ISSUANCE OF NOT ICE U/S 271D IS BAD IN LAW AND LIABLE TO BE QUASHED AS THE ASSESSEE HAD NE ITHER ACCEPTED NOR REPAID ANY LOAN FROM/ TO THE PARTIES MENTIONED IN T HE NOTICE. IT IS ALSO ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 3 MENTIONED THEREIN THAT THERE WAS A REASONABLE CAUSE FOR NOT LEVYING THE PENALTY BECAUSE THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE ASSESSEE WHILE CARRYING OUT THE ABOVE TRANSACTIONS IN THEIR BOOKS OF ACCOUNT AND THEY WERE UNDER THE BONA FIDE BELIEF TH AT SUCH TRANSACTIONS DID NOT CONTRAVENE SECTION 269SS OF THE ACT AS THE TRANSACTIONS HAD BEEN CARRIED OUT THROUGH ACCOUNT PAYEE CHEQUE. THE ASSES SEE HAD RELIED ON FOLLOWING CASE LAWS BEFORE THE ADDL. CIT MENTIONING THEREIN THAT ITAT AND HON'BLE HIGH COURTS HAVE RENDERED THE DECISIONS THAT BOOK ENTRIES ARE NOT COVERED BY THE CONTRAVENTION OF SECTION 269SS A ND 269T OF THE ACT. (A) CIT VS. NOIDA TOLL BRIDGE COMPANY LTD. ,262 ITR 260 (DEL). (B) CIT VS. SAURABH ENTERPRISES (ALLAHABAD HIGH CO URT) LODHA BUILDERS (P) LTD. VS. ACIT (ITAT MUMBAI) (D) CIT VS. MAHESHWRI NIRMAN UDYOG (2011) 2011 CTR 579 (RAJ.) AND CIT VS. RAJ KUMAR SHARMA (2007) 294 ITR 131 (RAJ,) (E) CIT VS. SENI MEDICAL STORE (2005) 27 7 ITR 430 (P&H) (F) ITO VS. SMT. BHAN BAN R SHAH (ITA NO. 1801/AHD/ 2009) IF TRANSACTION BETWEEN SISTER CONCERN ARE MADE WI TH A VIEW TO MEET THE BUSINESS NEED UNDER THE BONA FIDE BELIEVE AND WITH A REASONABLE CAUSE, NO PENALTY U/S 271D IS IMPOSABLE UNDER SUCH CIRCUMSTANCES. IN OUR CASE BOTH COMPANIES ARE HOLDI NG AND SUBSIDIARIES. THE ASSESSEE THUS PRAYED BEFORE THE ADDL. CIT, KOTA TO DROP THE PROCEEDINGS. ALTHOUGH THE ADDL. CIT, RANGE-1,KOTA H AD TAKEN INTO ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 4 CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE AS ME NTIONED IN HIS ORDER YET HE HAS REFERRED THE DECISION OF HON'BLE MUMBA I HIGH COURT IN THE CASE OF CIT VS. TRIUMPH INTERNATIONAL (P) LTD. (201 2) 345 ITR 370 IN WHICH IT IS HELD THAT WHERE THE LOANS/DEPOSITS WERE REPAID BY DEBITING THE AMOUNT THROUGH JOURNAL ENTRIES, IT MUST BE HELD THA T THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 269T OF THE A CT. THE ADDL. CIT, KOTA FURTHER OBSERVED THAT THE RATIO LAID DOWN BY T HE HON'BLE HIGH COURT ALSO APPLIED TO THE VIOLATION OF PROVISIONS OF SECT ION 269SS OF THE ACT IN THE CASE UNDER REFERENCE. THE ADDL. CIT, KOTA OBSER VED THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 269SS WHILE ACCEPTING THE LOANS UNDER REFERENCE AMOUNTING TO RS. 82,56,589/- FROM T HE PARTIES MENTIONED ABOVE AND THE ASSESSEE HAD NOT BEEN ABLE TO PROVE T HAT THERE WAS ANY REASONABLE CAUSE FOR RECEIVING THE ABOVE LOADS IN V IOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT AND ACCORDIN GLY IT IS A FIT CASE FOR IMPOSING PENALTY U/S 271D OF THE ACT. THUS THE ADDL . CIT IMPOSED THE PENALTY OF RS. 82,56,589/- U/S 271D OF THE ACT ON T HE ASSESSEE FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT . 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAD DELETED THE PENALTY BY OBSERVING AS UNDER:- 4.12 ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 5 I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AOS FINDINGS. IN MY OPINION, SECTION 269SS WAS INTRODUCED IN THE STATUTE TO PREVENT INTRODUCTION OF UNACCOUNTED MONE Y BY SHOWING CASH LOANS ETC. SECTION 269SS DOES NOT APPL Y ON JOURNAL ENTRIES PASSED IN THE BOOKS OF ACCOUNTS. TH EREFORE, THE AO IS DIRECTED TO DELETE PENALTY OF RS. 82,56,5 89/- . THESE GROUNDS OF APPEAL ARE ALLOWED. 2.3 NOW THE REVENUE IS BEFORE US AGAINST THE ORDER OF THE LD. CIT(A) PRAYING THAT THE LD. CIT(A) HAS ERRED IN DELETING T HE PENALTY OF RS. 82,56,589/- IMPOSED BY THE AO. DURING THE COURS E OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE HON'BLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (201 2) 22 TAXMANN.COM 138 (BOM.). 2.4 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE C.O. FILED BY THE ASSESSEE IS SUPPORTIVE T O THE ORDER OF THE LD. CIT(A). HOWEVER, THE LD. AR OF THE ASSESSEE FILED T HE FOLLOWING WRITTEN SUBMISSION PRAYING THEREIN TO UPHOLD THE FINDINGS O F THE LD. CIT(A). 1) THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-1, K OTA HAS IMPOSED PENALTY U/S 271 D OF THE ACT WHICH RELATES TO ACCEP TANCE OF LOAN OF RS. 8256589/-FROM M/S SANKALP FOUNDATION AND GOPI BAI F OUNDATION. 2) THE ASSESSEE HAS NOT ACCEPTED ANY LOAN FROM THE SAID PARTIES. (I) AMOUNT OF RS. 20,00,000/- WAS RECEIVED FROM SH. VISHNU KUMAR GARG THROUGH RTGS BY APPELLANT IN FY 2009-10 (PB PG 10). SHRI VISHNU KUMAR GARG, TRUSTEE OF M/S SANKALP FOUN DATION WHO INTENDED TO GIVE LOAN TO M/S SANKALP FOUNDATION ONL Y BUT DUE TO OVERSIGHT, SUCH FUNDS WERE TRANSFERRED TO M/S SHAKT I FOUNDATION. WHEN SUCH MISTAKE NOTICED BY THE TRUST, THIS LOAN W AS TRANSFERRED TO ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 6 M/S SANKALP FOUNDATION BY BOOK ENTRY IN A.Y. 2011-1 2 (PB 11). IT IS NOT A CASE OF ACCEPTANCE OF DEPOSIT BUT PENALTY LEV IED FOR VIOLATION IN ACCEPTANCE OF LOAN U/S 271D OF THE ACT. THE FOLLOWI NG DOCUMENTS ARE RELEVANT FOR THIS ISSUE. S.NO PARTICULARS PB PAGE NO 1. COPY OF LEDGER A/C OF VISHNU KUMAR GARG IN THE BOOKS OF ACCOUNT OF ASSESSEE AY 2010-11 10 2. COPY OF LEDGER A/C OF VISHNU KUMAR GARG IN THE BOOKS OF ACCOUNT OF ASSESSEE AY 2011-12 11 3. COPY OF RELEVANT PAGE OF BANK A/C OF M/S SHAKTI FOUNDATION SHOWING THE ENTRY OF CHEQUE RECEIVED FROM VISHNU KUMAR GARG. 14 4. COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE PERIOD FROM 01.04.10 TO 31.03.2011. 15 TO 16 5. COPY OF LEDGER A/C OF SHAKTI FOUNDATION IN BOOKS OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIO D FROM 01.04.10 TO 31.03.2011 17 TO 18 6. COPY OF LEDGER A/C OF SANKALP FOUNDATION IN BOOK S OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIO D FROM 01.04.10 TO 31.03.2011 19 TO 20 7 COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN T HE BOOKS OF ACCOUNTS OF SANKALP FOUNDATION FOR THE PERIOD FROM 01.04.10 TO 31.03.2011 21 TO 22 (II) SIMILARLY AMOUNT OF RS. 11,00,000/- WAS RECEIV ED FROM SH. MURARI LAL AGRAWAL THROUGH RTGS BY APPELLANT IN FY 2009-10. SH. MURARI LAL AGRAWAL ,TRUSTEE OF M/S SANKALP FOUNDATI ON WHO INTENDED TO GIVE LOAN TO M/S SANKALP FOUNDATION BUT DUE TO O VERSIGHT, SUCH FUNDS WERE TRANSFERRED TO M/S SHAKTI FOUNDATION. WH EN SUCH MISTAKE NOTICED BY THE TRUST, THIS LOAN WAS TRANSFERRED TO M/S SANKALP FOUNDATION BY BOOK ENTRY IN A.Y.2011-12. IT IS NOT A CASE OF ACCEPTANCE OF DEPOSIT BUT PENALTY LEVIED FOR VIOLAT ION IN ACCEPTANCE OF LOAN U/S 271D OF THE ACT. THE FOLLOWING DOCUMENTS A RE RELEVANT FOR THIS ISSUE. ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 7 S.NO PARTICULARS PB PAGE NO 1. COPY OF LEDGER A/C OF SHRI MURARI LAL AGARWAL IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE PERIOD FROM 01.03.10 TO 31.03.2010 (AY 2010-11). 12 2. COPY OF LEDGER A/C OF SHRI MURARI LAL AGARWAL IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE PERIOD FROM 01.05.10 TO 31.03.2011. 13 3. COPY OF RELEVANT PAGE OF BANK A/C OF M/S SHAKTI FOUNDATION SHOWING THE ENTRY OF CHEQUE RECEIVED FROM MURARI LAL AGARWAL. 14 4. COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE PERIOD FROM 01.04.10 TO 31.03.2011. 15 TO 16 5. COPY OF LEDGER A/C OF SHAKTI FOUNDATION IN BOOKS OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIO D FROM 01.04.10 TO 31.03.2011 17 TO 18 6. COPY OF LEDGER A/C OF SANKALP FOUNDATION IN BOOK S OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIO D FROM 01.04.10 TO 31.03.2011 19 TO 20 7. COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN THE BOOKS OF ACCOUNTS OF SANKALP FOUNDATION FOR THE PERIOD FROM 01.04.10 TO 31.03.2011 21 TO 22 (III) THERE WAS A OPENING CREDIT BALANCE OF RS. 495 6589/- IN THE NAME OF M/S GOPI BAI FOUNDATION APPEARING IN THE BO OKS OF THE APPELLANT. SUCH BALANCE WAS TRANSFERRED BY WAY OF B OOK ENTRY TO M/S CAREER POINT INFRA LTD. IT IS NOT A CASE OF ACCEPT ANCE OF LOAN BUT THE ADDL. C.I.T RANGE-1 HAS TREATED IT AS ACCEPTANCE OF LOAN AND LEVIED PENALTY U/S 271D OF THE ACT. THE FOLLOWING DOCUMENT S ARE RELEVANT FOR THIS ISSUE. S.NO PARTICULARS PB PAGE NO 1. COPY OF LEDGER A/C OF GOPI BAI FOUNDATION IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE 23 ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 8 PERIOD FROM 01.04.2010 TO 31.03.2011. 2. COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN BOOKS OF ACCOUNTS OF SHAKTI FOUNDATION FOR THE PERIOD FROM 01.04.10 TO 31.03.2011. 15 3. COPY OF LEDGER A/C OF SHAKTI FOUNDATION IN BOOKS OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIO D FROM 01.04.10 TO 31.03.2011 17 4. COPY OF LEDGER A/C OF SHAKTI FOUNDATION IN THE BOOKS OF ACCOUNTS OF GOPI BAI FOUNDATION FOR THE PERIOD FROM 01.04.2010 TO 31.03.2011. 24 5. COPY OF LEDGER A/C OF GOPI BAI FOUNDATION IN BOOKS OF ACCOUNTS OF CAREER POINT INFRA LTD FOR THE PERIOD FROM 01.04.2010 TO 31.03.2011. 28 6. COPY OF LEDGER A/C OF CAREER POINT INFRA LTD IN THE BOOKS OF ACCOUNTS OF GOPI BAI FOUNDATION FOR THE PERIOD FROM 01.04.2010 TO 31.03.2011. 43 (IV) AMOUNT OF RS. 2,00,000/- HAS BEEN GIVEN BY M/S MAHESHWARI BROTHERS TO SHAKTI FOUNDATION BUT THROUGH BOOK ENTR Y IN GOPI BAI FOUNDATION AND IN M/S CAREER POINT INFRA LIMITED SI NCE ALL LOANS HAS BEEN MANAGED THROUGH M/S CAREER POINT INFRA LIMITED , SO SUCH BOOK ENTRY HAS BEEN PASSED AND NOT LIABLE TO PENALTY U/S 271D OF THE INCOME TAX ACT, 1961. 3) WE FURTHER SUBMIT THAT THE ASSESSEE HAS RECEIVED LIABILITY FROM THE ASSOCIATE/SISTER CONCERNS BY WAY OF BOOK ENTRIES. W E WOULD LIKE TO MENTION THAT NONE OF THE TRANSACTIONS HAVE BEEN CARRIED OUT IN CASH BUT THROUGH ACCOUNT PAYEE CHEQUES /DEMAND DRAFTS. A PLAIN READI NG OF SECTION INDICATES THAT IT APPLIES TO A TRANSACTION WHERE A DEPOSIT OR A LOAN IN MONEY IS ACCEPTED BY AN ASSESSEE, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE DRAFT. THE AMBIT OF THE SECTION IS CLEARLY RE STRICTED TO TRANSACTION INVOLVING ACCEPTANCE OF MONEY AND NOT INTENDED TO A FFECT CASES WHERE A DEBT OR A LIABILITIES ARISES ON ACCOUNT OF BOOK ENTRIES. THE OBJECT OF THE SECTION IS TO PREVENT TRANSACTIONS IN CURRENCY IE. CASH. THIS IS ALSO CLEARLY EXPLICIT FROM CLAUSE(III) OF THE EXPLANATION TO SECTION 269SS OF THE ACT WHICH DEFINES LOAN OR DEPOSIT TO MEAN LOAN OR DEPOSIT OF MONEY. THE LIAB ILITY RECORDED IN THE BOOKS OF ACCOUNTS BY WAY OF JOURNAL ENTRIES I.E. CREDITIN G THE ACCOUNT OF A PARTY TO WHOM MONIES PAYABLE AND DEBITING THE ACCOUNT OF A P ARTY FROM WHOM MONIES ARE RECEIVABLE IN THE BOOKS OF ACCOUNTS IS CLEARLY OUT THE AMBIT OF PROVISIONS OF ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 9 SECTION 2699 SS OF THE ACT BECAUSE PASSING SUCH ENT RIES DOES NOT INVOLVE ACCEPTANCE OF ANY LOAN OR DEPOSIT OF MONEY. IN THIS CASE, ADMITTEDLY NO MONEY WAS TRANSACTED OTHERWISE THAN THROUGH BANKING CHANN ELS. 4) RELIANCE IS PLACED ON THE FOLLOWING DECISIONS:- S.NO NAME OF CASE CASE LAW PAPER BOOK PG 1. CIT-VI V/S WORLDWIDE TOWNSHIP PROJECTS LTD. (2014) 89 CCH 0100 (DEL) 1 TO 6 2. CIT V/S NATIONAL CLOTHING CO. (2014) 91 CCH 0019 (DEL) 7 TO 9 3. ITO V/S AMARNATH SHIVRAJ (HUF) (2003) 22 CCH 0120 AGRA TRIB. 10 TO 15 4. ITO V/S INTEGRATED TECHNOLOGY LTD (2012) 31 CCH DEL TRIB. 16 TO 24 5. DCIT V/S G. SANJAY CHOWDARY (2014) 41 CCH 0020 HYD TRIB. 25 TO 28 6. M/S S. R. ASSOCIATED CONSTRUCTION CO. PVT. LTD V /S JCIT, RANGE MALDA 2016(5) TMI 1168-ITAT KOLKATA 29 TO 40 7. ITO WARD-1, KAKINADA V/S M/S RAMALINGESWARA COMMERCIAL COMPLEX AND VICE VERSA 2016(5) TMI 1145-ITAT VISHAKHAPATNAM 41 TO 47 THE HUMBLE ASSESSEE PRAYS YOUR HONOR TO UPHELD THE FINDINGS OF LD CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORD TH AT THE ADDL. CIT, KOTA HAD IMPOSED THE PENALTY OF RS. 82,56,589/- U/S 271D OF THE ACT ON THE ASSESSEE FOR ACCEPTING LOANS/ DEPOSITS IN VIOLATIO N OF PROVISIONS OF SECTION 269SS OF THE ACT. BEFORE COMING TO ANY CONC LUSION, IT WILL IN THE ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 10 INTEREST OF JUSTICE TO TAKE INTO CONSIDERATION THE FOLLOWING PROVISIONS OF SECTION 269SS OF THE ACT THAT THE ASSESSEE HAD ACTU ALLY VIOLATED THIS PROVISION AND THE ADDL. CIT , KOTA HAD IMPOSED THE PENALTY U/S 271D OF THE ACT. [CHAPTER XX-B] REQUIREMENT AS TO MODE OF [ACCEPTANCE, PAYMENT OR] REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX [MODE OF TAKING OR ACCEPTING CERTAIN LOANS AND DEP OSITS. 269SS. NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE O R ACCOUNT PAYEE BANK DRAFT IF, (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGR EGATE AMOUNT OF SUCH LOAN AND DEPOSIT ; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN O R DEPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE D EPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS FALLEN DUE OR NOT), T HE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID ; OR (C) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN C LAUSE (B), IS [TWENTY] THOUSAND RUPEES OR MORE : PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR ANY LOAN OR DEPOSIT TAKE N OR ACCEPTED BY, (A) GOVERNMENT ; (B) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO-OPERATIVE BANK ; (C) ANY CORPORATION ESTABLISHED BY A CENTRAL, STAT E OR PROVINCIAL ACT ; (D) ANY GOVERNMENT COMPANY 84 AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; (E) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY 85 IN THIS BEHALF IN THE OFFICIAL GAZETTE : 86 [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT WHERE THE PERSON FROM WHOM THE LOAN OR DEPO SIT IS TAKEN OR ACCEPTED AND THE PERSON BY WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCE PTED ARE BOTH HAVING AGRICULTURAL INCOME AND NEITHER OF THEM HAS ANY INCOME CHARGEABL E TO TAX UNDER THIS ACT.] ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 11 EXPLANATION.FOR THE PURPOSES OF THIS SECTION, 87 [(I) BANKING COMPANY MEANS A COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCLUDES ANY BA NK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT ACT ;] (II) CO-OPERATIVE BANK SHALL HAVE THE MEANING AS SIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; (III) LOAN OR DEPOSIT MEANS LOAN OR DEPOSIT OF M ONEY.] A PLAIN READING OF SECTION INDICATES THAT IT APPLIE S TO A TRANSACTION WHERE A DEPOSIT OR LOAN MONEY IS ACCEPTED BY AN ASSESSEE OT HERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE DRAFT. THI S IS ALSO EXPLICIT FROM CLAUSE (III) OF THE EXPLANATION TO SECTION 269SS OF THE ACT WHICH DEFINES LOAN OR DEPOSIT OF MONEY. ALTHOUGH IN THE CASE O F CUT VS. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (SUPRA), IT IS HELD THAT THE LIABILITY RECORDED IN THE BOOKS OF ACCOUNT BY WAY OF JOURNAL ENTRIES I .E. CREDITING THE AMOUNT OF PARTY TO WHOM MONIES PAYABLE AND DEBITING THE AC COUNT OF A PARTY FROM WHOM MONIES ARE RECEIVABLE IN THE BOOKS OF ACC OUNT IS IN CONTRAVENTION OF PROVISIONS OF SECTION 269T OF THE ACT BUT IN THAT CASE ALSO THE PENALTY WAS HELD TO BE NOT LEVIABLE FOR TH E REASON THAT TRANSACTION WAS BONA FIDE AND WAS NOT TO EVADE TAXES. IN ASSESS EE'S CASE ALSO, THE TRANSACTION IS BONAFIDE AND IT WAS NOT TO EVADE TAX ES. IN THIS VIEW OF THE MATTER AND FURTHER PERUSING THE CITATIONS OF THE CA SE LAWS (SUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH I S SUSTAINED ON THIS ISSUE. THUS THE SOLITARY GROUND OF THE REVENUE IS D ISMISSED. 3.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN ITS C.O. ITA NO. 663/JP/2015 ITO, WARD- 1(2), KOTA VS. M/S. SHAKTI FOUNDATION, K OTA . 12 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS DONE RIGHTLY ACT IN:- (I) DELETING THE PENALTY OF RS. 82,56,589/- U/S 271 D OF THE I.T. ACT, 1961. SINCE THERE IS AN ACCEPTANCE OF LOAN THROUGH BOOK ENTRY WHICH IS NOT IN THE CONTRAVENTION OF PRO VISION OF SECTION 269SS AS DECIDED BY HON'BLE HIGH COURTS AND ITAT. 3.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE C.O., IT IS NOTED THAT THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). SINCE, WE HA VE DISMISSED THE APPEAL OF THE REVENUE THEREFORE, THE GROUND RAISED BY THE ASSESSEE IN ITS C.O. SUPPORTING THE ORDER OF THE LD. CIT(A), IS IN FUCTUOUS AND DISMISSED. 4.0 IN THE RESULT, THE APPEAL FILED BY REVENUE IS DISMISSED AND C.O. OF THE ASSESSEE IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1/09/2 016 SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01 /9/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 1(2), KOTA 2. IZR;FKHZ@ THE RESPONDENT- M/S. SHAKTI FOUNDATION, KOTA 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 663/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR
