I.T.O Wd - 36(3),kolkata, Kolkata V. Sri Saikat Chowdhury, Kolkata

ITA 667/KOL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83113 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2013
• Court: TRIBUNAL
• Department Lawyers: GAYALUDDIN ANSARI JCITSR
• Assessee Lawyers: J M THARD
• Keywords: Business expenditure; Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH S MC, KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM ] /ITA NO.667/KOL/2013 ASSESSMENT YEAR : 2008-09 ( APPELLANT ) ( RESPONDENT) I.T.O., WARD-36(3), . -VERSUS- SRI SAIKAT CHOWDHU RY KOLKATA KOLKATA (PAN:ACNPC 7050 M) FOR THE APPELLAN T: SHRI GAYALUDDIN ANSARI, JCIT,SR.DR FOR THE RESPONDENT: S HRI J.M.THARD, ADVOCATE DATE OF HEARING : 18.08.2014. DATE OF PRONOUNCEMENT : 05.09.2014. ORDER THIS APPEAL OF REVENUE IS ARISING OUT OF OR DER OF CIT(A)-XX, KOLKATA IN APPEAL NO.428/CIT(A)-XX/RANGE-36/2011-12 DATED 10.12.2012. ASSESSMENT WAS FRAMED BY I.T.O. WARD-36 (3), KOLKATA U/S 143(3) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR A.Y. 2008-09 VIDE ITS ORDER DATED 13.12.2010. PENALTY UNDER DISPUTE WAS IMPOSED U/S 271E OF THE ACT BY JC IT, RANGE-36-KOLKATA VIDE HIS ORDER DATED 20.01.2012. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE PENALTY IMPOSED BY JCIT, RANGE-36, KOLKATA U/S 271E OF THE ACT FOR A SUM OF RS.14,95,500/- (WRONGLY MENTIONED AT RS.1,95,500/-) FOR VIOLATION OF PROVISION OF SECTION 269T OF THE ACT. FOR THIS REVENUE HAS RAISE D THE FOLLOWING GROUND NOS. 1 AND 2:- 1. LD.CIT(A)-XX, KOLKATA HAS ERRED IN DELETING THE PENALTY IMPOSED OF RS.1,95,500/- U/S 271E OF I.T.ACT AGAINST THE ASSESSEE BY SAYING THAT THERE WAS NO DEPOSIT AS REFERRED IN SECTION 269T OF I.T.ACT, ALTHOUGH THERE WAS ENOU GH EVIDENCE ON RECORD THAT ASSESSEE VIOLATED THE PROVISIONS OF 269T AND REPAID THE LOAN IN CASH. ITA NO.667/KOL/2013 SRI SAIKAT CHOWDHURY A.YR.2008-09 2 2. LD.CIT(A)-XX, KOLKATA HAS ERRED IN DELETING THE PENALTY IMPOSED OF RS.1,95,500/- U/S 271E OF I.T.ACT EVEN KNOWING THE FACT THAT ASSESSEE , DURING THE COURSE OF ASSESSMENT PROCEEDINGS FAILED TO PUT FORWARD ANY REASONABLE CA USE FOR THE SAID REPAYMENT OF LOAN IN CASH. 3. I HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT ASSESSEE WAS CA RRYING ON BUSINESS IN THE NAME AND STYLE OF M/S. S.S.TYRE WORLD AS SOLE PROPRIETORSHIP . SIMULTANEOUSLY, ASSESSEES FATHER SHRI DULAL KANTI CHOWDHURY WAS ALSO CARRYING ON BUS INESS IN THE NAME AND STYLE OF M/S.S.S.INTERNATIONAL A PROPRIETORSHIP CONCERN. PRO PRIETORSHIP CONCERN OF FATHER M/S. S.S.INTERNATIONAL HAS A GODOWN AT MDHYAMGRAM, KOLKA TA. BOTH ASSESSEE AS WELL AS HIS FATHER HAD NO BANK ACCOUNT AT MADHYAMGRAM. ASSESSEE S BUSINESS HAD A CURRENT ACCOUNT WITH HIS FATHERS PROPRIETORSHIP CONCERN M/ S. S.S.INTERNATIONAL, IN WHICH AMOUNTS ARE RECEIVED AND REPAID IN THE NORMAL COURS E OF BUSINESS, WHENEVER REQUIRED, WHICH EXISTS LIKE A CURRENT ACCOUNT ON WHICH NO INT EREST IS CHARGED OR PAID. ASSESSEE RECEIVED AMOUNTS TO THE TUNE OF RS.25,12,500/- FROM HIS FATHER BY CHEQUE/DRAFT AND ALSO REPAID THE SAME IN THE SAME FINANCIAL YEAR. TH E ASSESSEE REPAID AN AMOUNT OF RS.10,17,000/- BY CHEQUE/DD BUT THE BALANCE AMOUNT OF RS.14,95,500/- WAS REPAID IN CASH. AO OBSERVED THAT THIS REPAYMENT IS IN CASH. H ENCE, HE INITIATED PENALTY PROCEEDINGS, FOR VIOLATION OF PROVISION OF SECTION 269T OF THE ACT, U/S 271E OF THE ACT AND REFERRED THE MATTER TO JCIT, RANGE-36, KOLKATA. JCIT, RANGE-36, KOLKATA. AFTER CONSIDERING THE ABOVE FACTS, HE LEVIED PENALTY U/S 271E OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND IT WAS PLEADED BY THE ASSESSEE THAT ALL REPAYMENTS IN CASH WERE MADE AT MADHYAMGRAM, WHERE NEITHER ASSESSEE NOR HIS FATHER HAD ANY BANK ACCOUNT. ADMITTEDLY, THE CASH T RANSACTION IS BETWEEN FATHER AND SON AND FOR THE BUSINESS NEED OF THE ASSESSEE FOR T HE REASON THAT MOST OF THE SALES BY ASSESSEE ARE MADE IN CASH AND THE PROPRIETY CONCERN OF THE FATHER M/S.S.S.INTERNATIONAL HAD ALSO A GODOWN AT MADHYAMGRAM, WHERE GOODS WERE RECEIVED FOR WHICH LORRY HIRE AND OTHER EXPENSES HAD TO BE PAID IN CASH. THEREFOR E, ASSESSEE MADE PAYMENTS TO M/S.S.S.INTERNATIONAL FROM MADHYAMGRAM SHOP FOR MEE TING THE URGENT NEED OF THE BUSINESS AND LORRY HIRE CHARGES AND OTHER EXPENSES. ACCORDING TO ASSESSEE, THESE WERE BUSINESS EXPENSES AND MADE FOR THE URGENT NEED OF T HE ASSESSEE. EVEN OTHERWISE, THE ITA NO.667/KOL/2013 SRI SAIKAT CHOWDHURY A.YR.2008-09 3 TRANSACTION IS BETWEEN FATHER AND SON I.E. FAMILY T RANSACTIONS. IN TERMS OF THE ABOVE, CIT(A) DELETED THE PENALTY BY HOLDING THAT IT IS A CASE OF REASONABLE CAUSE FOR REPAYMENT IN CASH. 4. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE TRIB UNAL. I FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS N ATVARLAL PURUSHOTTAMDAS PAREKH (2008) 303 ITR 5 (GUJ), WHEREIN IT HAS HELD THAT TH E AMOUNTS ALLEGED TO HAVE BEEN RECEIVED IN CASH OR PAID IN CASH WERE PART OF TRANS ACTIONS ON BEHALF OF FAMILY MEMBERS. IT CANNOT BE SAID THAT THERE WAS VIOLATION OF PROVISION OF SECTION 269SS AND 269T OF THE ACT, SO AS TO ATTRACT PENALTY U/S 271T AND 271E OF THE ACT. I FURTHER FIND THAT THE INDORE BENCH OF THIS TRIBUNAL IN THE CASE OF MOHAN KARKARE VS DCIT [1995] 52 ITD 236 (INDORE), WHEREIN IT HAS HELD THAT THE M ONEY RECEIVED IN CASH BY SON FROM HIS FATHER DID NOT AMOUNT TO LOAN OR DEPOSIT. THERE FORE, PENALTY U/S 271D WAS NOT LEVIABLE. IN VIEW OF THE ABOVE, AS IN THE PRESENT C ASE ALSO, THE TRANSACTION IS BETWEEN FATHER AND SON, WHEREIN REPAYMENT MADE IN CASH IS I N THE NATURE OF FAMILY AFFAIR. HENCE, IN THIS CASE ALSO CIT(A) HAS RIGHTLY DELETED THE PENALTY AND WE CONFIRM THE SAME. 5. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 05.09.2014. SD/- [ MAHAVIR SINGH ] JUDICIAL MEMBER DATE: 05.09.2014. R.G.(.P.S.) ITA NO.667/KOL/2013 SRI SAIKAT CHOWDHURY A.YR.2008-09 4 COPY OF THE ORDER FORWARDED TO: 1. SRI SAIKAT CHOWDHURY, PROP.OF S.S.S.S.TYRE WROLD, 1 9, SYNAGOGUE STREET, R.NO.402, KOLKATA-700001. 2 THE I.T.O.-WARD-36(3), KOLKATA. 3. THE CIT, 4. THE CIT(A)-XX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES