Mohit Singh L/H of Late Shri Balwant Singh, Jind V. JCIT, Bhiwani

ITA 91/DEL/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5886 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 06-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.As. No.90/DEL/2019 & 91/DEL/2019 Assessment Year 2011-12 & 2011-12 Mohit Singh L/H of Late Shri Balwant Singh, C/o Dalamwala Hotel and Banquet Hall, Near Safidon Road. Jind-126102 v. Joint Commissioner of Income Tax SCO 22, Huda Complex, Bhiwani. TAN/PAN: ATUPS0483Q (Appellant) (Respondent) Appellant by: Shri R.R. Singhla, CA Respondent by: Shri Bhopal Singh, Sr.DR Date of hearing: 17 03 2022 Date of pronouncement: 29 03 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap t io n ed ap p eals h av e b een file d at th e in st ance o f th e assesse e ag a in st b o th th e o rd ers o f th e Co mmiss io n er o f In co me Tax (Ap p eals, His ar [‘CIT(A)’ in sho rt], d at ed 1 0 .03 .20 1 8 arising fro m ev en o rd ers d ated 2 7 .0 3 .2 0 14 p assed b y th e Assessin g Officer (AO) u n der Sect io n 2 7 1 E an d 27 1 D o f th e I n co me Tax Act, 1 9 6 1 (th e Act) co n cern in g AYs 2 0 10 -11 and 2 0 11-12 , resp ect iv ely . 2 . Th e assessee h as c h allen g ed th e ac ti o n o f Assessin g Offic er to ward s imp o sit io n o f p en alty to R s.2 lac lev ied u nd er Sect ion 2 7 1 E o n th e g roun d th at assessee h as rep aid lo an o f Rs.2 lac in cash d u rin g th e y ear u n d er co n sid eratio n in v io lat io n o f Sec tio n I.T.As. No.90 & 91/DEL/2019 2 2 6 9 T o f th e Act . 3 . Wh en th e mat ter was cal led fo r h ea rin g , ld . co u nsel fo r th e assesse e su b mit te d th at th e p en al t y u n d er Sectio n 27 1 E in th e h an d s o f th e d eceased -assessee i s n o t ju sti fi ed fo r th e reaso n th at all eg at io n s o f Assessin g Officer are n o t co rro b orated fro m th e reco rd . It was p o in ted o u t th at th e b asis fo r i mp o sit io n o f p en alty is ‘lo o se p ap er no .9 8 ’ imp o u nd ed d u rin g th e cou rse o f su rv ey , co p y o f wh ich is p laced o n reco rd . It was p o in ted ou t th at p ap er was h an d written b y so meb od y o th er th an assessee as s el f ev id en t fro m lo o se p ap er. Th e p ap er is n eith er sig n ed b y assessee n o r acted u p o n . It is n o t k n o wn fro m wh o m th e mo n ey h as co me n o r th e a mo u n t o f Rs. 2 lac is men t io n ed an y wh ere in th e l o o se p ap er. It was fu rth er po in ted o u t th at th e assessee h as sin ce d ied th erefo re su ch v ag u e an d n on d escrip t d o cu men t sh o u ld n o t b e u sed ag ain st th e d ec ea sed assess ee o n th e b asi s o f su sp icio n an d su rmises . It was fu rth er p o in ted o u t th at th e Assess in g Offi cer its el f in p arag rap h n o .7 o f assess men t o rd er d ated 2 7 .0 3 .2 01 4 sta ted th a t n o ad d itio n is req u ired to b e mad e to ward s cash lo an s in Assessmen t Year 2 0 11 -12 as th e all eg ed amo u n t was receiv ed in Assessmen t Yea r 2 01 0 -1 1 . It was th u s sub mit ted th at th e actio n o f th e Jo in t Co mmi ssio n er o f In co me Tax i mp o sin g p en alty is marred wi th n o n ap p licat io n o f min d . Co n seq u en tly , th e p en al ty is req u ired to b e s tru ck d o wn . 4 . Ld . DR fo r th e Rev en u e, on th e o th er h and , relied u p on th e o rd ers o f th e lo wer au th o rities an d sub mi tted th at th e lo o se p ap ers fo u n d d urin g th e su rv ey o p eratio n ev id en ces th e fa ctu m o f rep ay men t o f lo a n in cash b y th e assess ee wh ich attr act s th e p ro v isio n s o f Secti o n 26 9 T and in turn Sectio n 2 7 1 E with o u t an y I.T.As. No.90 & 91/DEL/2019 3 fu rth er req u ire me n ts in law. Ld . DR th u s su b mi tt e d th at n o in ter feren ce with t h e o rd er o f th e CI T(A) is ca l led fo r. 5 . We h av e carefu l l y co n sid ered th e riv al su b mi ssion s. As p o in ted o u t o n b ehal f o f th e assesse e, an assessment u n der Sectio n 1 4 3 (3 ) r.w. Sectio n 14 7 was co mp leted in th e in s tant cas e, wh erein th e Assessin g Officer h as n o t o b serv ed any rep ay men t o f lo an in cash as a l leg ed in th e p en al ty o rd er. On p erusal o f th e lo o se p ap er n o .98, we fin d th at n o su ch amo u n t o f Rs.2 la c is b o rn e o u t in th e l o o se p ap er, in so fa r as Fin an cia l Ye ar 2 0 10 -11 relev an t to Assess men t Ye ar 2 0 1 1 -12 in q u estio n is c o n cern . We also fin d trac tio n i n th e p lea o f th e as sessee th at th e lo o se p ap er in th e in stan t c ase ar e n eith er sig n ed by th e d eceased-assessee n o r p rep ared by h im an d also simu l tan eo u sly v ag u e and non -d escrip t. Th e lo o se p ap er was p u rp orted ly p rep ared b y so me n eph ew o f th e assesse e wh o was n eith er id en t ified n o r cro ss-ex amin e d . Th e lo o se p ap er no .9 8 also do es n o t sp ell o u t as to with wh o m th e alleg ed cash tran sac tio n s as en tered in to th e lo o se p ap er has b een carried o u t, i .e. , th e co rre sp o nd in g p arty to th e tr an sact io n is n o t k n o wn. Th e assessee is si n ce d eceased an d th u s th e au th en tic ity o f th e tran sac tio n can n o t v o u ch ed . Und er these mit ig at in g circ u mstan c es, we fin d th at p lau sib le cau se ex is ts to q u est io n th e p ro p riety o f all eg at io n s. Th e assessee th u s d eserv es to b e ex on erated fro m th e clu tch es o f Sec tio n 2 6 9 T r.w. Sec tio n 2 7 1 E o f th e Act . 6 . Th e o rd er o f th e CIT(A) is a cco rd in g ly set a sid e an d th e o rd er o f th e Ass essin g Offi cer re v ersed . Th e p en al ty i mp o sed u n d er Sectio n 2 7 1E st an d s can ce lled . 7 . In th e resu lt, t h e ap p eal o f t h e assessee in ITA No .9 0 /Del/2 0 1 9 is allo wed . I.T.As. No.90 & 91/DEL/2019 4 ITA No .9 1 /Del/2 0 1 9 8 . Th e assessee h as ch all en g ed th e i mp o sitio n o f p en al t y of Rs.2 2 ,5 0 ,0 0 0 /- all eg ed ly receiv ed i n cash b y way of lo an s o r d ep o sits in co n trav en tio n o f Sectio n 2 69 SS r.w. Secti o n 2 71 D o f th e Act . 9 . Ld . co u n sel fo r t h e assesse e su b mit ted th at th e b as is o f imp o si t io n o f p en alty u n d er Sectio n 27 1 D is a ‘lo o se p ap er mark ed p ag e n o .9 4’ imp o u n d ed in th e co u rse o f su rv ey fro m th e b u sin ess p remise s o f th e as sessee . Th e Ld . Co u n sel th ereafter a d v erted to th e co p y o f lo o se p ap er n o .9 4 and sub mi tted th at a b are read in g o f lo o se p ap er, if i t were to b e b eliev ed , wo u ld sh ow th at Rs.1 5 lac (p ag e 9 4 o f lo o se p ap er) was pu rpo rted ly receiv ed 21 mo n ths b ack , i. e. , so mewh ere in Ju ly , 2 0 0 8 an d d o es no t con cern th e Assessmen t Year 2 0 11 -12 in qu esti o n . Lik ewise, an o th er su m o f Rs.7 ,5 0 ,0 0 0 (p ag e 9 8 o f lo o se p ap er) is st ated to be receiv ed o n 1 2 .0 9 .20 0 9 i.e. in th e F.Y. 2 0 0 9 -1 0 relev an t to A.Y. 2 0 1 0 -11 . Th e assess men t o rd er framed u n d er Secti o n 14 3 (3 ) r.w. Sectio n 1 4 7 for AY 2 0 11 -12 is also silen t o n Rs.7 .5 0 lak h s. It was n ex t su b mit ted th at th e asses see i s sin ce d eceased , an d th erefo re, in th e ab sen ce o f an y sig n a tu re fro m th e assess ee an d in th e ab se nce o f an y p articu l ar o f th e p erso n fro m wh om th e mo n ey was alleg ed ly receiv ed et c., th e d o cu men t i.e ., lo o se p ap er can n ot b e co n ceiv ed mo re th an a flip p a n t o r d u mb d o cu men t an d th u s can no t b e rel ied u p on fo r th e p u rp oses o f. Ld . co u n sel th u s u rg ed for ca n cell at io n o f p en al ty u n d er Sect io n 2 7 1 D o f th e Act. 1 0 . Th e Ld . DR re l ied o n th e ac tio n o f re v en u e au tho rities . 1 1 . We h av e carefu l l y co n sid ered th e riv al su b missio n . Th e I.T.As. No.90 & 91/DEL/2019 5 imp o si t io n o f p en alty u n d er Sectio n 2 71 D fo r pu rp orted ly co n trav en tio n o f Sect io n 2 69 SS is in issu e. It is al le g ed in th e p en alty o rd er th at th e ass essee h as c o n tro v erted the p ro v isio n s o f Sect io n 2 6 9 SS o f th e Act h av in g rai sed cash lo an o f Rs.1 5 lak h an d Rs.7 .5 lak h in ag g reg ate d u rin g th e Assess men t Ye ar 2 0 11 -12 in q u estio n . In th is reg ard , we o b serve th at th ere was so me fig u res o f Rs.1 5 lac at p a g e n o .94 and fig u re o f Rs.7 ,5 0 ,0 00 /- at p ag e 9 8 o f th e lo o se p ap er, wh ich is b asis fo r all eg in g v iolat io n o f Sect io n 2 6 9 SS o f th e Act an d in co me esc ap ed assess men t u n d er Sect io n 1 4 7 o f th e Act o n th e o th er h an d . Wh ile reco rd in g th e reaso n s fo r reo p en in g o f th e a ssess men t , i t is n o tic ed th a t, as p er p arag rap h 7 o f th e asses smen t o rd er u nd er Sectio n 1 4 3 (3 ) r.w. Sect io n 1 4 7 o f th e Act, th e Asses sin g Offi cer h imse lf h as h eld th at n o ad d itio n is req u ired to b e mad e o n th e b asis o f d o cu men t n o .9 8 co n cern ing Rs.7 .5 0 lak h s as th e lo an was receiv ed b y th e a ssessee o n 1 2 .0 9 .20 0 9 , i.e., in th e Fin an cial Year 2 00 9 -1 0 . Thu s, th e imp o si t io n o f p en alty o n alleg ed cash lo an o f Rs.7 ,5 0 ,0 00 /- arisin g o u t o f lo o se p ap er n o .98 d o es no t arise in Assessmen t Year 2 01 1 - 1 2 in q u estio n . 1 1 . Ad v ertin g to lo o se p ap er n o .9 4 g iv ing rise to imp o si tio n o f p en alty o f Rs.1 5 l ac, i t is s el f-ev id e n t fro m th e calcu l atio n o f th e in teres t sh o wn in th e lo o se p ap er th at th e a l leg ed cas h lo an was n o t receiv ed in the Fin an cial Year 2 0 10 -11 in q u estio n b u t th e all eg ed cash lo an rela tes b ack to Fin an cia l Year 2 00 8 -0 9 relev an t to Assessmen t Ye ar 2 0 09 -10 . Th e calcu l at io n o f in ter est v o u ch es th at th e lo an o f Rs .1 5 lac in q u estio n was receiv ed ab o ut 2 1 mo n th b ack , i.e ., in Ju ly 2 0 08 , if su ch lo o se p ap ers are to b e b eliev ed at its fa ce v alu e. O n th is g ro un d alo n e, th e ju risd ic tio n o f th e Rev en u e to imp o si tio n o f p en alty u n d er Sect io n 2 71 D r.w. Sect io n I.T.As. No.90 & 91/DEL/2019 6 2 9 6 SS is o u sted , in so far as Assessmen t Year 2 01 1 -1 2 in q u estio n is co n cern ed . We th erefo re fin d p ri ma fa cie meri t in th e p lea o n b eh alf o f th e asse ssee fo r its ex o n eratio n fro m th e cl u tch es o f Sect io n 2 7 1 D o f th e Act . 1 2 . Co n seq u en tly , th e o rd er o f CIT(A) is se t as id e an d th e Assessin g Offi cer i s d irec ted to can ce l th e p en al ty. 1 3 . In th e resu l t, th e a p p eal o f th e asses s ee is a llo wed . Order pronounced in the open Court on 29/03/2022. [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/03/2022 Prabhat