ANJALI TALWAR, MUMBAI V. DCIT CEN CIR 46, MUMBAI

ITA 740/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2965 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-01-2014
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Keywords: Search and seizure
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI SANJAY GARG (JM) I.T.A. NO. 740 /MUM/ 20 1 4 (ASSESSMENT YEAR 200 5 - 0 6 ) I.T.A. NO. 741/MUM/2014 (ASSESSMENT YEAR 2006 - 07) I.T.A. NO. 742/MUM/2014 (ASSESSMENT YEAR 2 007 - 08) I.T.A. NO. 743/MUM/2014 (ASSESSMENT YEAR 2008 - 09) I.T.A. NO. 744/MUM/2014 (ASSESSMENT YEAR 2009 - 10) I.T.A. NO. 745/MUM/2014 (ASSESSMENT YEAR 2010 - 11) SMT. ANJALI TALWAR 17 - B, IL PALAZZO RIDGE ROAD MALABAR HILL MUMBAI - 400 006. VS. ADD. CIT CE NTRAL RANGE - 10 MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . ABTPT8949D ASSESSEE BY SHRI VIMAL PUNMIYA DEPARTMENT BY SHRI A. RAMACHANDRAN DATE OF HEARING 24.8 . 201 6 DATE OF PRONOUNCEMENT 14 . 9 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 27.12.2013 PASSED BY LD CIT(A) - 38, MUMBAI CONFIRMING THE PENALTY LEVIED U/S 271D OF THE ACT FOR ASSESSMENT YEARS 2005 - 06 TO 2010 - 11. SMT. ANJALI TALWAR 2 2. THE ASSESSEE WAS SUBJECTED TO SEARCH AND SEIZURE OPERATIONS ALONG WITH THE SEARCH CONDUCTED ON NITCO GROUP OF COMPANIES. WHILE FRAMING THE ASSESSMENTS U/S 153A OF THE ACT, THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED LOAN OF RS.10,000/ - PER MONTH BY WAY OF CASH FROM M/S MAHARASHTRA MARBLE COMPANY IN ALL THE YEARS UNDER CONSIDERATION, I.E., THE ASSESSEE HAD ACCEPTED CASH LOAN OF RS.1,20,000/ - IN EACH OF THE ABOVE SAID YEARS, IN VIOLATION OF THE PROVISIONS OF SEC. 269SS OF THE ACT. HENCE THE MATTER WAS REFERRED TO THE ADDL CIT, WHO LEVIED PE NALTY OF RS.1,20,000/ - IN EACH OF THE ABOVE SAID YEARS U/S 271D OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE SAME. THE ASSESSEE IS AGGRIEVED BY THE ORDERS PASSED BY LD CIT(A). 3. THE LD A.R SUBMITTED THAT M/S MAHARASHTRA MARBLE COMPANY IS THE PROPRIE TARY CONCERN OF ASSESSEES HUSBAND NAMED SHRI VIVEK TALWAR. THE HUSBAND OF THE ASSESSEE GAVE RS.10,000/ - TO THE ASSESSEE EVERY MONTH TO MEET THE DOMESTIC EXPENSES. THE SAID CONTRIBUTION WAS DEBITED TO THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF MAHARASHTR A MARBLE COMPANY, INSTEAD OF DEBITING THE SAME TO THE CAPITAL ACCOUNT OF SHRI VIVEK TALWAR. SINCE THE ACCOUNT OF THE ASSESSEE WAS DEBITED WITH THE CONTRIBUTION, THE ASSESSEE ALSO CREDITED THE CONTRIBUTION OF RS.10,000/ - TO THE ACCOUNT OF M/S MAHARASHTRA M ARBLE COMPANY. UPON WITHDRAWAL OF THE ABOVE SAID AMOUNT, THE ASSESSEE DEBITED HER CAPITAL ACCOUNT WITH THE AMOUNT OF WITHDRAWAL. ACCORDINGLY IT WAS SUBMITTED THAT THE CONTRIBUTION OF ASSESSEES HUSBAND TOWARDS DOMESTIC EXPENSES HAVE BEEN ROUTED THROUGH T HE BOOKS OF THE ASSESSEE AND HENCE THE SAME SHOULD NOT BE CONSTRUED AS A TRANSACTION OF LOAN OR DEPOSIT. HE SUBMITTED THAT THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS SHOULD NOT BE TAKEN AS CONCLUSIVE AND THE REAL NATURE OF TRANSACTIONS HAS TO BE SEEN. THE LD A.R SUBMITTED THAT THE ABOVE SAID CONTRA ACCOUNTS HAVE BEEN CLOSED IN THE YEAR 2014 BY TRANSFERRING THEM TO THE SMT. ANJALI TALWAR 3 RESPECTIVE CAPITAL ACCOUNTS. THE LD A.R ALSO PLACED VARIOUS OTHER PROPOSITIONS TO CONTEND THAT THE IMPUGNED PENALTY IS NOT SUSTAINABLE. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ENTRIES MADE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WOULD SHOW THAT THE TRANSACTIONS WERE IN THE NATURE OF LOAN TRANSACTIONS ONLY. HE FURTHER SUBMITTED THAT THE CLAIM OF THE ASSESSEE THAT THERE WAS A MIST AKE IN ACCOUNTING THESE TRANSACTIONS AS LOAN TRANSACTIONS HAS NOT BEEN SUBSTANTIATED. 5. WE HEARD THE PARTIES AND PERUSED THE RECORD. DURING THE COURSE OF ARGUMENTS, THE LD A.R CARRIED US THROUGH THE FINANCIAL STATEMENTS OF THE ASSESSEE. WE NOTICE THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.10,000/ - PER MONTH, I.E, RS.1,20,000/ - PER ANNUM IN EACH OF THE YEARS UNDER CONSIDERATION FROM M/S MAHARASHTRA MARBLE COMPANY. IN EACH OF THE YEARS, THE ASSESSEE HAS WITHDRAWN A SUM OF RS.1,20,000/ - TOWARDS HOM E EXPENSES. THERE IS NO DISPUTE THAT THE CONCERN M/S MAHARASHTRA MARBLE COMPANY IS OWNED BY THE ASSESSEES HUSBAND. THE REGULAR CONTRIBUTION OF RS.10,000/ - PER MONTH IN ALL THE YEARS UNDER CONSIDERATION TO THE ASSESSEE COMBINED WITH THE FACT THAT THERE WAS WITHDRAWAL OF EQUAL AMOUNT BY THE ASSESSEE TOWARDS DOMESTIC EXPENSES, IN OUR VIEW, SUBSTANTIATES THE CLAIM OF THE ASSESSEE. 6. FROM THE WRITTEN SUBMISSIONS MADE BY THE LD A.R, WE NOTICE THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.4,57,500/ - FROM M /S MAHARASHTRA MARBLE COMPANY DURING THE FINANCIAL YEAR 2008 - 09 AND THE SAME HAS BEEN RECEIVED BY WAY OF CHEQUES THROUGH BANKING CHANNELS, MEANING THEREBY THE LOAN TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS. THIS FACT, IN OUR VIEW, FURTHE R STRENGTHENS THE CLAIM OF THE ASSESSEE THAT THE RECEIPT OF RS.10,000/ - PER MONTH WAS NOT A LOAN TRANSACTION, BUT IT WAS CONTRIBUTION RECEIVED FROM THE HUSBAND OF THE ASSESSEE TOWARDS DOMESTIC EXPENSES. SMT. ANJALI TALWAR 4 7. WE ALSO FIND MERIT IN THE CONTENTIONS OF THE ASS ESSEE THAT THE ACCOUNTING ENTRIES PASSED IN THE BOOKS OF ACCOUNT CANNOT BE CONSIDERED TO BE DETERMINATIVE FACTOR. TRUE NATURE OF TRANSACTIONS HAS TO BE ASCERTAINED NOT ONLY BY CONSIDERING THE BOOKS OF ACCOUNTS, BUT ALSO FROM THE SURROUNDING CIRCUMSTANCES. ACCORDINGLY WE ARE OF THE VIEW THAT THE EXPLANATIONS AS WELL AS THE CONDUCT OF THE ASSESSEE SHOWS THAT THE AMOUNT OF RS.10,000/ - PER MONTH RECEIVED BY THE ASSESSEE CANNOT BE CONSIDERED TO BE A LOAN TRANSACTION AND HENCE WE ARE OF THE VIEW THAT THE PROVI SIONS OF SEC. 269SS SHOULD NOT BE APPLIED TO THE SAME. ACCORDINGLY WE ARE OF THE VIEW THAT THERE IS NO JUSTIFICATION IN LEVYING PENALTY OF RS.1,20,000/ - IN EACH OF THE YEARS UNDER CONSIDERATION U/S 271D OF THE ACT FOR VIOLATION OF THE PROVISIONS OF SEC. 2 69SS OF THE ACT. 8. ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) FOR ALL THE YEARS UNDER CONSIDERATION AND DIRECT THE ADDL CIT TO DELETE THE PENALTY LEVIED U/S 271D OF THE ACT IN ALL THE YEARS UNDER CONSIDERATION. 9. IN THE RESULT, A LL THE APPEALS OF THE ASSESSEE STAND ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 14 . 9 .2016 SD/ - SD/ - (SANJAY GARG ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 14 / 9 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS