MONICA K SAVLANI, MUMBAI V. JCIT 19(3), MUMBAI

ITA 7468/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3665 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 03-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2012
• Court: TRIBUNAL
• Assessee Lawyers: K S CHOKSHI
• Keywords: Reasonable cause; Tax effect
• Section: 273B; 2

Judgement Text

, , B, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.7468/MUM/2012 ASSESSMENT YEAR: 2008-09 MONICA K. SAVLANI, 201, PARISHRAM, 40 NARGIS DUTT RD, PALI HILL, BANDRA(W) MUMBAI-400050 / VS. J CIT 19 ( 3 ) 3 RD FLOOR, R.NO.301, PIRAMAL CHAMBERS, MUMBAI-400012 (ASSESSEE ) (REVENUE) P.A. NO. AISPS5237P !' / ASSESSEE BY SHRI K.S. CHOKSHI (AR) / REVENUE BY SHRI VIVEKANAND OJHA (DR) # $ % & / DATE OF HEARING : 28/04/2016 % & / DATE OF ORDER: 20/05/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 30{(IN SHORT CIT(A)}, DATED 05.09.2912 PASSED AGA INST PENALTY MONICA K. SAVLANI 2 ORDER U/S 271D DATED 16.11.2010 FOR THE ASSESSMENT YEAR 2008-09. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI K.S. CHOKSHI, AUTHORISED REPRESENTATIVE (AR) O N BEHALF OF THE ASSESSEE AND BY SHRI VIVEKANAND OJHA, DEPARTMEN TAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL IS WITH REGARD TO LEVY OF PENALTY OF RS. 50,000/- BY THE AO , ON THE GROUND THAT LOAN GIVEN BY THE ASSESSEE IN EARLIER Y EAR WAS RECEIVED BACK IN CASH. 3.1. DURING THE COURSE OF HEARING IT WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT THE TRANSACTION WAS NOT TRE ATED AS NON-GENUINE. RATHER COMPLETE INFORMATION WAS GIVEN AND NOTHING WRONG WAS FOUND. UNDER THESE CIRCUMSTANCES PENALTY WAS NOT LEVIABLE. IT WAS FURTHER SUBMITTED THAT IN ANY CASE THIS TRANSACTION WAS OUTSIDE SCOPE OF SECTION 269SS/269T AS IT WAS A CASE OF RECEIVING BACK OF LOAN. IT IS NEITHER A CASE OF GIVING OF LOAN OR ACCEPTING OF LOAN IN CASH AND THE REFORE, IT WAS OUTSIDE THE PROVISIONS OF PENAL PROVISIONS. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORIT IES. 3.2. WE HAVE GONE THROUGH THE SUBMISSION MADE BY BOTH T HE SIDES AS WELL AS COPIES OF JUDGMENTS PLACED BEFORE US. IT IS NOTED THAT ASSESSEE HAD GIVEN FOLLOWING JUSTIFICATI ON TO THE AO FOR RECEIVING BACK AMOUNT IN CASH: MONICA K. SAVLANI 3 OUR CLIENT IS IN RECEIPT OF THE AFORESAID NOTICE W HEREIN YOUR HONOUR HAS EXPRESSED TO LEVY PENALTY U/S 271D. YOUR HONOUR IS REQUESTED TO NOTE THAT IT IS NOT A N EW LOAN THAT HAS BEEN ACCEPTED BY THE ASSESSEE IN CASH. THE ASSESSEE HAD ADVANCED THE AMOUNT OF RS50000/- TO M/ S TEE ESS INTERNATIONAL (TELES INSTALLATION) DURING T HE F Y 2000-2001. THERE WAS NO MOVEMENT IN THE SAID LOAN ACCOUNT UP TO F Y 2007-08 WHEREIN THE SAID LOAN WAS REPAID. THE ASSESSEE WAS REPAID IN CASH. HENCE THE ASSESSEE HAS ONLY ACCEPTED THE REPAYMENT OF HER LOA N AND NOT A FRESH LOAN. THE SAME WAS ACCEPTED IN ORDER TO SAFEGUARD HER INTEREST IN THE ADVANCE GIVE N BY HER DURING THE F Y 2000-01. AS SEEN THE SAID LOAN W AS REPAID AFTER A PERIOD OF SEVEN YEARS, THE ASSESSEE HAD NO OBJECTION IN RECEIVING THE SAME AS LONG AS SHE WAS GETTING HER MONEY BACK. ALSO YOUR HONOUR HAS NOT GI VEN ANY ADVERSE REMARKS FOR THE ABOVE REFUND OF LOAN. BASED ON THE ABOVE FACTS, YOUR HONOUR'S ATTENTION I S DRAWN TO THE PROVISIONS OF SECTION 273B WHICH STATE S AS UNDER; PENALTY NOT TO BE IMPOSED IN CERTAIN CASES. 273B. NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIONS OF [CLAUSE B) OF SUB-SECTION (1) OF] [SE CTION 271, SECTION 271A, (SECTION 271AA,] SECTION 271B [ SECTION 271BA], [SECTION 271BB,] SECTION 271C, [SECTION 271CA,] SECTION 271D, SECTION 271E, [SECTI ON 271F, [SECTION 271FA,] [SECTION 271FB,] [SECTION 271G,]] CLAUSE (C) OR CLAUSE (D) OF SUB-SECTION (1) OR SUB- SECTION ('2) OF SECTION 272A, SUB-SECTION (1) OF SE CTION 272AA] OR [SECTION 272B OR] [SUB-SECTION (1) [OR SU B- SECTION (1A)] OF SECTION 272BB OR] [SUB- SECTION (1 ) OF SECTION 272BBB OR] CLAUSE (B) OF SUB-SECTION (1) OR CLAUSE B) OR CLAUSE (C) OF SUB-SECTION (2) OF SECTI ON 273, NO PENALTY SHALL HE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFER RED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE W AS REASONABLE CAUSE FOR THE SAID FAILURE.] THE VIEW HELD BY THE PUNJAB AND HARYANA HIGH COURT IN MONICA K. SAVLANI 4 THE CASE OF CIT V SWILL KUMAR GOEL (315 ITR 163 (P& H)) WAS '(I , ) THERE WAS NO DISPUTE ABOUT THE FACT THAT THE CASH TRANSACTIONS OF THE ASSESSEE WERE WITH THE SISTER CONCERN AND THESE TRANSACTIONS WERE WITHIN THE FAMILY AND DUE TO BUSINESS EXIGENCY. A FAMILY TRANSACTION, BETWEEN TWO INDEPENDENT ASSESSES, BASED ON AN ACT OF CASUALNESS, ESPECIALLY IN A CASE WHERE THE DISCLOSURE THEREOF WAS CONTAINED IN THE COMPILATION OF ACCOUNTS, AND WHICH HAD NO TAX EFFECT, ESTABLISHED 'REASONABLE CAUSE' U/S.273B OF THE ACT. (II) SINCE THE ASSESSEE HAD SATISFACTORILY ESTABLISHED 'REASONABLE CAUSE U/S.273B OF THE ACT, LIE MUST HE DEEMED TO HAVE ESTABLISHED SUFFICIENT CAUSE FOR NOT INVOKING THE PENAL PROVISIONS U/S. 271D AND U/S.271E OF THE ACT AGAINST HIM. THE DELETION OF PENALTY BY THE TRIBUNA L WAS VALID.' IN VIEW OF THE ABOVE FACTS IT IS SEEN THAT THE ASSE SSEE HAD A REASONABLE CAUSE FOR ACCEPTING THE SAID LOAN. HOWEVER, DUE TO THE ACCEPTANCE OF THE REPAYMENT OF THE LOAN, THERE WAS NEITHER ANY IMPLICATION ON THE TAXA BLE INCOME OF THE ASSESSEE NOR HAD THE ASSESSEE ENTERED INTO THIS TRANSACTION TO EVADE J4XJHE ASSESSEE HAS CO- OPERATED DURING THE ASSESSMENT AND HAD GIVEN ALL DETAILS. 3.3. IT IS FURTHER NOTED THAT ASSESSEE SUBMITTED COPY O F BALANCE SHEET AND LEDGER ACCOUNT SHOWING THAT THE A MOUNT WAS GIVEN IN EARLIER YEARS WHICH HAS BEEN RECEIVED BACK DURING THE YEAR UNDER CONSIDERATION. THE LEDGER ACCOUNT IS DULY CONFIRMED BY THE OTHER PARTY. THUS, ON FACTS, THERE IS NO DISPUTE AND THE TRANSACTION HAS BEEN ACCEPTED EVEN BY THE LOWER AUTHORITIES. UNDER THESE CIRCUMSTANCES, WE FI ND THAT PENALTY CANNOT BE LEVIED ON THE IMPUGNED TRANSACTIO NS FOR THE MONICA K. SAVLANI 5 REASON THAT IT IS A CASE OF RECEIVING BACK OF THE A MOUNT. IT IS NEITHER THE CASE OF GIVING OR ACCEPTING OF LOANS IN CASH AND THEREFORE, THE TRANSACTIONS OF THE ASSESSEE DOES NO T FALL UNDER THE PROVISIONS OF SECTIONS 269SS/269T. THE PENAL PR OVISIONS HAVE TO BE CONSTRUED STRICTLY. WE DERIVE OUR SUPPOR T FROM THE JUDGMENTS OF HONBLE HYDERABAD BENCH IN THE CASE OF DCIT V. ANKUSH RAO INGLE 39 SOT 263 (HYD). IT IS FURTHER NO TED BY US THAT HONBLE BOMBAY HIGH COURT HAD HELD IN THE CASE OF CIT VS. TRIUMPH INTERNATIONAL FINANCE (I) LTD. 22 TAXMA NN.COM 138 (BOM) THAT IN ABSENCE OF FINDINGS TO THE EFFECT THAT REPAYMENT OF LOAN/DEPOSIT WAS NOT A BONA FIDE TRANS ACTION AND WAS MADE WITH A VIEW TO EVADE TAX, NO PENALTY U/S 2 71E COULD BE IMPOSED FOR CONTRAVENING PROVISIONING OF SECTION 269T. IT IS NOTED BY US THAT NO SUCH CASE HAS BEEN MADE OUT BY THE LOWER AUTHORITIES TO SHOW THAT THE TRANSACTION OF THE ASS ESSEE WAS NOT BONA FIDE. THUS, UNDER THESE CIRCUMSTANCES, VIE WED FROM ANY ANGLE, THE PENALTY WAS NOT LEVIABLE, THEREFORE SAME IS DELETED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2016. SD/- (JOGINDER SINGH) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER # $ MUMBAI; ( DATED: 20/05 /2016 CTX? P.S/. . . MONICA K. SAVLANI 6 %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / # 0 ( * ) / THE CIT, MUMBAI. 4. / / # 0 / CIT(A)- , MUMBAI 5. 34 - , / *& 5 , # $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. / BY ORDER, .3* - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI