The Commissioner of Income Tax(Central) V. Smt. G.Venkata Lakshmi,

ITTA/12/2014

AI Insights

The case involves the Commissioner of Income Tax (Central), Hyderabad as the appellant and M/s. Ramky Infrastructure Ltd., Hyderabad as the respondent. The dispute centered on whether transactions recorded through journal entries should attract penalties under Section 269SS and Section 271D of the Income Tax Act, 1961. The Tribunal had previously ruled that these transactions did not constitute actual loan receipts but were merely journal entries, thus not attracting the aforementioned sections. The appellant challenged this interpretation, but the High Court found no grounds to deviate from the Tribunal's established reasoning and dismissed the appeal.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 679467 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 31-01-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: J V PRASAD
• Keywords: Assessment Year; Journal entry; Loan; Penalty
• Section: 271D; 269SS

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No.12 of 2014 DATED:31.1.2014 Between: The Commissioner of Income Tax (Central), Hyderabad. … Appellant And M/s. Ramky Infrastructure Ltd., Hyderabad. ….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No.12 of 2014 Judgment: (per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated 12.7.2013 in relation to the assessment year 2003-04 and is sought to be admitted on the following suggested questions of law. 1. Whether on the facts and in the circumstances of the case and in law, the Hon’ble Income Tax Appellate Tribunal is justified in holding that the transactions through journal entry do not attract the provisions of Section 269SS and consequently penalty is not leviable under Section 271D of the Income Tax Act, 1961 ? 2. Whether Income Tax Appellate Tribunal is justified in holding that the assessee has accepted the loan only by journal entries, though in fact the loan was accepted by assessee, as it was paid in cash to the seller of the property on behalf of assessee at assessee’s instance only ? We have heard Mr. J.V. Prasad, learned counsel for the appellant, who says that the learned Tribunal has relied on the previous judgment of the assessee’s own case in relation to assessment year 2005-06, against which, an appeal is proposed to be filed. We have checked up the record from which it appears that the learned Tribunal has not decided anything new in this matter. Rather, it relied on its own judgment on an identical issue rendered in a previous case on 9.11.2012. It is said that against the said order, an appeal has been filed. But, we do not find any difficulty to decide the issue as a whole as the relevant findings of the previous judgment have been extracted and there is no dispute that the same is accurate or incorrect. Hence, we can safely rely on the same. We have read the reasoning rendered in the previous judgment. It appears that the assessee challenged the penalty proceedings initiated under Section 271D of the Income Tax Act, 1961 on the ground of illegal borrowings in contravention of Section 269SS of the Act. The learned Tribunal on an earlier occasion found that there is no proof of receipt of such loan from the records and they were only found to be journal entries. The learned Tribunal, in our view, correctly observed that relying on an entry in the journal, no penalty proceedings can be initiated. Hence, it was sent for clarification whether actual flow of money did take place. Therefore, the matter was remanded and no decision was taken on merit. We find that the learned Tribunal has correctly decided the same. Hence, we do not find any reason to admit this matter for settling the issue. The appeal is dismissed. __________________ K.J. SENGUPTA, CJ _________________ SANJAY KUMAR, J 31.1.2014 PNB "