Ostro Jaisalmer Private Limited V. Additional Commissioner of Income Tax & Ors.

W.P.(C)/13523/2024

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Ostro Jaisalmer Private Limited filed a petition against the Additional Commissioner of Income Tax, challenging a penalty order of \\u20b9147 crores for the Assessment Year 2018-2019. The penalty was based on an alleged violation of Section 269SS of the Income Tax Act, 1961, concerning the acceptance of loans in cash. The petitioner argued that the loan transactions were properly recorded through book entries following an assignment of a loan from L&T Infrastructure Finance Company to India Infradebt Limited. The court found that if the petitioner's account of the transactions was accurate, there would be no violation of Section 269SS, referencing a precedent case. Consequently, the court remanded the case for further verification of the facts by the Assessing Officer.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796859 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 26-09-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax VI v. Worldwide Township Projects Ltd.: (2014) 367 ITR 433 (Del)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: ROHIT JAIN; DEEPESH JAIN; SUMARIN CHAUDHARI
• Keywords: Assignment; Book entries; Cash transaction; Loan; Penalty
• Section: 271D; 269SS

Judgement Text

"$~83 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13523/2024 CM APPL. 56521/2024 OSTRO JAISALMER PRIVATE LIMITED .....Petitioner Through: Mr. Rohit Jain, Mr. Deepesh Jain and Mr. Sumarin Chaudhari, Advs. versus ADDITIONAL COMMISSIONER OF INCOME TAX & ORS. .....Respondents Through: CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R % 26.09.2024 1. Issue notice. 2. Learned counsel for the respondents accepts notice. 3. The petitioner has filed the present petition, inter-alia, impugning an order dated 31.08.2024 (hereafter the impugned order), passed by respondent no. 3, imposing a penalty of ₹147 crores under Section 271D of the Income Tax Act, 1961 (hereafter the Act) in respect of Assessment Year 2018-2019. The impugned order proceeds on the basis that the petitioner has violated the provisions of Section 269SS of the Act. 4. The petitioner claims that it had availed a loan of ₹293 crores from L&T Infrastructure Finance Company Limited (hereafter L&T) in the year 2015. Subsequently, in terms of the Deed of Assignment dated 28.06.2017, L&T assigned a part of the said loan, to the extent of ₹147 crores to a company named India Infradebt Limited (hereafter Infradebt). The petitioner is also a party to the said Deed of Assignment. 5. It is the case of the petitioner that the petitioner had made entries in its This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/10/2024 at 11:52:39 books of account, crediting the ledger account of Infradebt and debiting the account of L&T. Its books of account now reflect that the petitioner owes an amount of ₹147 crores, out of a total outstanding of ₹293 crores, to Infradebt and ₹146 crores to L&T. 6. Concededly, if the facts as stated by the petitioner are correct, the same would not constitute violation of Section 269SS of the Act. The said issue is covered by the decision of this Court in Commissioner of Income Tax VI v. Worldwide Township Projects Ltd.: (2014) 367 ITR 433 (Del). 7. In view of the above, we set aside the impugned order and remand the matter to the Assessing Officer to verify the facts as stated in the present petition. The petitioner shall file a copy of the ledger of account of L&T and Infradebt as maintained in its books of account, along with other documents that the petitioner considers necessary, to establish that there was no inflow or outflow of cash from Infradebt. And, the transaction is reflected solely by the book entries. The Assessing Officer will pass a fresh order after affording an opportunity of hearing to the petitioner. 8. The writ petition is disposed of in the aforesaid terms. Pending applications also stand disposed of. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J SEPTEMBER 26, 2024 A Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/10/2024 at 11:52:39 "