TRENDSETTERS PROPMART PVT. LTD.,NEW DELHI V. ACIT, RANGE-25, NEW DELHI

ITA 846/DEL/2020

AI Insights

The case involves M/s. Trendsetters Propmart Pvt Ltd, which appealed against the penalty imposed by the Additional Commissioner of Income Tax, Range-25, New Delhi, under Section 271D of the Income-tax Act, 1961. The penalty was levied for receiving Rs. 10 lakhs in cash, contravening Section 269SS. The Tribunal considered precedents from the Delhi High Court, which held that if an amount is treated as undisclosed income under Section 68, it cannot be treated as a loan for the purposes of Section 269SS and Section 271D. Consequently, the Tribunal reversed the penalty, allowing the appeal of the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34872 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 13-08-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 18-02-2020
• Other Referred Cases: CIT Vs. RP Singh & Co. Pvt. Ltd, CIT Vs. Standard Brands Ltd, Diwan Enterprises Vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: KANIKA JAIN
• Section: 143(3); 68; 271D

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No.846/Del/2020 (Assessment Year: 2011-12) M/s. Trendsetters Propmart Pvt Ltd, C/o. S-241, Basement, Greater Kailash-1, New Delhi Vs. Addl. CIT, Range-25, New Delhi (Appellant) (Respondent) PAN:AACCT5284G Assessee by : Ms. Kanika Jain, CA Revenue by: Shri Amit Katoch, Sr. DR Date of Hearing 16/10/2024 Date of pronouncement 18/10/2024 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.846/Del/2020 for AY 2011-12, arises out of the order of the Commissioner of Income Tax (Appeals)-9, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 9/10091/18-19 dated 17.07.2019 against the order of assessment passed u/s 271D of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.04.2018 by the Assessing Officer, Add. CIT, Range-25, New Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in confirming the levy of penalty u/s 271D of the Act in the facts and circumstances of the instant case. ITA No.846/Del/2020 M/s. Trendsetters Propmart Pvt Ltd Page | 2 3. We have heard the rival submissions and perused the material available on record. The scrutiny assessment for AY 2011-12 stood completed in the hands of the assessee u/s 143(3) of the Act on 30.03.2014 wherein, it was noticed that assessee had borrowed unsecured loans from Shri Somvir Singh to the tune of Rs. 17 lakhs which was added as unexplained cash credited u/s 68 of the Act. This addition had attained ultimate finality in the quantum proceedings. Admittedly, unsecured loan of Rs. 17 lakhs included a sum of Rs. 10 lakhs received by the assessee in cash which was in contravention of provisions of Section 269SS of the Act. For this purpose, the ld AO levied penalty u/s 271D of the Act vide order passed on 27.04.2018 and levied penalty of Rs. 10 lakhs thereon. This stood confirmed by the ld CIT(A). 4. The ld AR before us rightly placed reliance on the decision of the Hon’ble Jurisdictional High Court in the case of CIT Vs. RP Singh & Co. Pvt. Ltd reported in 340 ITR 217 (Del) wherein, it was held that once the share application money was treated as undisclosed income of the assessee invoking the provisions of Section 68 of the Act in the quantum assessment proceedings, the very same money cannot be treated as loan simplicitor for the purpose of levying penalty u/s 271D read with Section 269SS of the Act. Similar was the view taken by the Hon’ble Jurisdictional High Court in the case of CIT Vs. Standard Brands Ltd reported in 285 ITR 295 (Del) and Diwan Enterprises Vs. CIT reported in 246 ITR 571v (Del). 5. Respectfully following the aforesaid decisions, we hold that the levy of penalty u/s 271D of the Act would have no legs to ITA No.846/Del/2020 M/s. Trendsetters Propmart Pvt Ltd Page | 3 stand in the facts and circumstances of the instant case. Accordingly, the grounds raised by the assessee are allowed. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 18/10/2024. -Sd/- -Sd/- (SUDHIR KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:18/10/2024 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "