ITO,Ward-2(1), Kolkata, Kolkata V. M/s Vishal Technology & Solution, Kolkata

ITA 794/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75099 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2012
• Court: TRIBUNAL
• Department Lawyers: SUCHETA CHATTOPADHYAY
• Assessee Lawyers: N O N E
• Section: 2

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 794/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WD-2(1), KOLKATA. VS. M/S. VISHAL TECHNOLOGY & SOLUTION (P) LTD. (PAN: AACCV6743Q) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 04.03.2014 DATE OF PRONOUNCEMENT: 13.03.2014 FOR THE APPELLANT: SMT. SUCHETA CHATTOPADHYAY, JCIT , SR. DR FOR THE RESPONDENT: N O N E $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA IN APPEAL NO. 109/CIT(A)-1/R-2/2010-11 DATED 24.02.2012. PENALTY IN DISPUTE WAS LEVIED BY ADDL. CIT, RANGE-2, KOLKATA U/S. 271D OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2007-08 VIDE HIS ORDER DATED 28.07.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED BY ADDL. CIT, RANGE-2, KOLKATA U/S. 271D OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT FOR ACCEPTING LOAN IN C ASH EXCEEDING RS.20,000/-. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT FOR THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.3,35,860/- IMPOSED U/S. 271D OF T HE I. T. ACT, FOR VIOLATION OF SECTION 269SS OF THE I. T. ACT. 3. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DURING THE COURSE OF SCRUTINY ASSE SSMENT OBSERVED THAT THE ASSESSEE COMPANY ACCEPTED UNSECURED LOAN FROM ONE LOAN CREDITOR SHR I RAJ KISHORE SHAW FATHER OF SHRI VISHAL SHAH, ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY TO THE TUNE OF RS.3,35,860/- IN CASH. ACCORDINGLY, HE INITIATED PENALTY PROCEEDINGS U/S. 271D OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT FOR ACCEPTING LOAN IN C ASH EXCEEDING RS.20,000/-. ACCORDINGLY, CASE WAS REFERRED TO ADDL. CIT, RANGE-2, KOLKATA FO R DECIDING THE ISSUE. THE ADDL. CIT, RANGE-2, KOLKATA VIDE ORDER DATED 28.07.2010 U/S. 2 71D OF THE ACT LEVIED THE PENALTY FOR AN AMOUNT OF RS.3,35,860/-. THE ASSESSEE CONTENDED BE FORE ADDL. CIT, RANGE-2, KOLKATA AND 2 ITA NO.794/K/2012 M/S. VISHAL TECHNOLOGY & SOLUTION (P) LTD. , AY:2007-08 EVEN BEFORE CIT(A) THAT THE PAYMENT MADE BY SHRI RA J KUMAR SHAW ON BEHALF OF ASSESSEE COMPANY AGAINST THE FOLLOWING EXPENSES: A) RENT RS.42,000/- B) A. C. MACHINE RS.95,800/- C) TOUR & TRAVELS RS.326/- D) COMPUTER BILL RS.30,854/- E) PRELIMINARY EXPENSES RS.27,200/- F) LOANS & ADVANCES OF RS.1,39,450/- TAKEN FROM VARIOUS PARTIES WERE REPAID BY SHRI SHAW. THE CIT(A) CONSIDERING THE SUBMISSION OF THE ASSESS EE DELETED THE PENALTY BY OBSERVING IN PARA 3 AS UNDER: 3.AFTER CAREFUL CONSIDERATION OF THE PENALTY ORDE R AND WRITTEN SUBMISSION IT IS NOTICED THAT SRI RAJ KISHORE SHAW, MADE PAYMENTS ON BEHALF OF COMPANY FOR RENT, AC MACHINE COMPUTER BILL, AND PRELIMINARY EXPENSES SINCE COMPA NY WAS INCORPORATED ON 13.11.2006. THESE LIABILITIES WERE REFLECTED IN THE BALANCE SHE ET OF THE ASSESSEE COMPANY AND A.O. HAD NOT DISPUTED THE NATURE AND GENUINENESS OF THES E TRANSACTIONS IN THE ASSESSMENT OR PENALTY ORDER. THE ABOVE TRANSACTIONS WERE MERELY A BOOK ENTRIES MADE BY ASSESSEE COMPANY IN FORM OF A JOURNAL ENTRY IN THE BOOKS OF ACCOUNTS AS ACKNOWLEDGMENT OF DEBT. KEEPING IN VIEW OF THESE CIRCUMSTANCES PENALTY U/S. 271D OF THE I. T. ACT, 1961 FOR VIOLATION 269SS OF THE I. T. ACT, 1961 IS DELETED. THEREFORE, GROUND NO.1 IS ALLOWED. AGGRIEVED NOW REVENUE IS IN APPEAL BEFORE US. 4. IT IS AN ADMITTED FACT THAT THE LOAN CREDITOR SH RI RAJ KUMAR SHA IS FATHER OF SHRI VISHAL SHAH, WHO IS A DIRECTOR OF THE ASSESSEE COMPANY. F IRST OF ALL, THE TRANSACTION FALLS IN THE NATURE OF TRNSACTION BETWEEN RELATIVES AND SECONDLY, THE T RANSACTION IS MERELY A BOOK ENTRY AS THE LOAN CREDITOR HAS TRANSFERRED THIS MONEY THROUGH BOOKS A ND EXPENDITURE WERE INCURRED ON BEHALF OF ASSESSEE COMPANY BY SHRI RAJ KISHORE SHAW AND NO LO AN IN CASH WAS TAKEN. ONCE THIS POSITION IS ESTABLISHED THAT SHRI RAJ KISHORE SHAW THE LOAN CREDITOR HAS INCURRED EXPENSES ON BEHALF OF ASSESSEE COMPANY AT THE INITIAL STAGE I.E. AFTER TH E INCORPORATION, THIS IS MERELY A BOOK ENTRY AND NO LOAN OR DEPOSIT IS ACCEPTED BY ASSESSEE COMPANY WHATSOEVER IN CASH. ACCORDINGLY, WE HAVE NO HESITATION IN CONFIRMING THE ORDER OF CIT(A) AND APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.03.2 014. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH MARCH, 2014 12 '3' 4 JD.(SR.P.S.) 3 ITA NO.794/K/2012 M/S. VISHAL TECHNOLOGY & SOLUTION (P) LTD. , AY:2007-08 $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- ITO, WARD-2(1), KOLKATA. 2 ./,- / RESPONDENT M/S. VISHAL TECHNOLOGY & SOLUTION (P ) LTD., 6, WATERLOO STREET, SOUTH BLOCK, 2 ND FLOOR, ROOM NO. 205, KOLKATA-700 013.. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .