M/s. Mahagun Tech Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 6672/DEL/2013

• Counselvise Citation: 667220114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 04-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 18-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GARIMA JAIN
• Assessee Lawyers: SAUBHAGYA AGGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.6672/DEL/2013 ASSESSMENT YEAR : 2003-04 M/S MAHAGUN TECH. PVT. LTD. B-66, VIVEK VIHAR, DELHI 110 095 (PAN: AACCB3143L) VS. DCIT, CC-03, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAUBHAGYA AGGARWAL, ADV. DEPARTMENT BY : MS. GARIMA JAIN, SR. DR DATE OF HEARING : 04.11.2015 DATE OF PRONOUNCEMENT : 04.11.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A)-IV, NEW DELHI ON 11.10.2013 UPHOLDING T HE PENALTY OF RS.2,47,104/- IMPOSED BY THE AO U/S 271D OF THE INC OME-TAX ACT, 1961 IN RELATION TO THE ASSESSMENT YEAR 2003-04. ITA NO.6672/DEL/2013 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN INDIVIDUAL, FILED RETURN DECLARING NIL INCOME ON 3 .7.2009. ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 153A/143(3) OF I.T. ACT AT RS. 2,46,834/- THE ADDL. CIT WAS OF THE VIEW THAT AS PER PROVISIO NS OF SECTION 269SS OF THE I.T. ACT, NO PERSON SHALL TAKE OR ACCEPT FRO M ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. HE WAS OF THE VIEW THAT THE ASSES SEE COMPANY HAS ACCEPTED LOANS IN CASH IN CONTRAVENTION TO THE PROV ISIONS OF SECTION 269SS AND THE MERE FACT THAT NO BANK AMOUNT WAS BEI NG MAINTAINED BY THE ASSESSEE COMPANY DOES NOT ABSOLVE THE ASSESSEE FROM THE DEFAULT. HE WAS FURTHER OF THE VIEW THAT THERE IS NO EXEMPTI ON SPECIFIED IN THE PROVISIONS OF ACT FOR RECEIPT OF ANY SUM BY ANY OTH ER MODE INCLUDING BOOK TRANSFER ETC. AS IN THE CASE OF THE ASSESSEE C OMPANY. THE ADDL. CIT(A) ARRIVED AT THE CONCLUSION THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS AND ACCORDINGLY, IMPOSE D A PENALTY OF RS. 2,47,104/- UPON THE ASSESSEE IS A SUM EQUAL TO THE AMOUNT OF LOAN / DEPOSITS ACCEPTED IN CONTRAVENTION TO THE PROVISION S OF SECTION 269SS OF THE I.T. ACT. THE LD. CIT(A) UPHELD THE PENALTY. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 4. LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT A DDITION ON SIMILAR AND IDENTICAL COUNT HAS BEEN DISMISSED BY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RP SINGH & CO. (P) LTD . (2012) 340 ITR ITA NO.6672/DEL/2013 3 217 (DEL) WHEREIN THE REVENUES APPEAL HAS BEEN D ISMISSED HOLDING THAT ONCE THE SHARE APPLICATION MONEY RECEIVED BY T HE ASSESSEE WAS TREATED AS UNDISCLOSED INCOME, PENALTY PROCEEDINGS COULD NOT HAVE BEEN INITIATED UNDER SECTION 269SS READ WITH SECTION 271 D OF THE I.T. ACT. IN THIS BEHALF, HE FILED THE COPY OF THE AFORESAID DE CISION. HE FURTHER STATED THAT THE PRESENT CASE IS SQUARELY COVERED BY THE A FORESAID DECISION OF THE HONBLE HIGH COURT, HENCE, HE REQUESTED THAT THE S AME RATIO MAY BE FOLLOWED IN THE CASE OF THE ASSESSEE AND PENALTY I N DISPUTE MAY BE DELETED. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE LD. CIT(A) HAS PASSED A W ELL REASONED ORDER WHICH MAY BE UPHELD. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE LEVANT MATERIAL AVAILABLE ON RECORD ESPECIALLY THE ORDERS OF THE AU THORITIES BELOW AND THE CASE LAWS CITED BY THE LD. COUNSEL OF THE ASSESSEE, AS AFORESAID. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS RAISED A LOAN O F RS.1.47,304/- FROM SHRI BHIM BINDAL. THE AMOUNT REPRESENTED TWO INSTAL LMENTS PAID DIRECTLY BY SHRI BHIM JINDAL TO NOIDA AUTHORITY DIR ECTLY AND CREDIT FOR THE SAME WAS GIVEN BY THE ASSESSEE COMPANY IN THE L OAN ACCOUNT OF SHRI ITA NO.6672/DEL/2013 4 BHIM BINDAL. ADMITTEDLY, IT WAS NOT A NORMAL BUSINE SS TRANSACTION AS THE ASSESSEE IS NOT INTO GIVING AND TAKING OF LOANS. TH EREFORE, THE CASE LAWS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. I FURTHER FIND THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.99,800/- IN CASH FROM SHRI SHIM BINDAL FOR ALLOTMENT OF THE SHARES. HOWEVER, AS PER SECTIO N 269SS NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BA NK DRAFT, IF AMOUNT EXCEEDS RS.20,000/-. I FIND THAT THE LD. CIT(A) H AS RIGHTLY REFERRED THE HON'BLE JHARKHAND HIGH COURT DECISION IN THE CASE O F BHALOTIA ENGINEERING WORKS PVT. LTD. VS. CIT (JHARKHAND) 28 5 ITR 399 WHEREIN IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 26 9SS ARE ATTRACTED IN CASE OF SHARE APPLICATION MONEY ALSO. KEEPING IN VI EW OF THE FACTS AND CIRCUMSTANCES AND THE PRECEDENT RELIED UPON BY THE LD. CIT(A), AS AFORESAID, I AM OF THE VIEW THAT IN THE PRESENT C ASE THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS AND THE D ECISION OF UPHOLDING OF PENALTY IN DISPUTE BY THE LD. CIT(A) IS A JUSTIF IED WHICH DOES NOT ITA NO.6672/DEL/2013 5 NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD T HE IMPUGNED ORDER ON THE ISSUE IN DISPUTE DECIDE THE SAME AGAINST THE AS SESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 04.11.201 5. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED, 04 TH NOVEMBER, 2015. SR BHATNAGAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. ITA NO.6672/DEL/2013 6