Shri Subhashbhai Chimanlal Patel, Ahmedabad v. The Income tax Officer,Ward-8(3),, Ahmedabad

CO 147/AHD/2010 | 2006-2007
Pronouncement Date: 06-08-2010 | Result: Dismissed

Appeal Details

RSA Number 14720523 RSA 2010
Assessee PAN AAMPP5447L
Bench Ahmedabad
Appeal Number CO 147/AHD/2010
Duration Of Justice 1 month(s) 15 day(s)
Appellant Shri Subhashbhai Chimanlal Patel, Ahmedabad
Respondent The Income tax Officer,Ward-8(3),, Ahmedabad
Appeal Type Cross Objection
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 06-08-2010
Date Of Final Hearing 30-07-2010
Next Hearing Date 30-07-2010
Assessment Year 2006-2007
Appeal Filed On 21-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI D.C. AGRAWAL ACCOUNTANT MEMBER DATE OF HEARING : 30/07/2010 DRAFTED ON: 05/ 08/2010 ITA NO.1127/AHD/2010 ASSESSMENT YEAR : 2006-07 THE ITO WARD-8(3) AHMEDABAD VS. SHRI SUBHASHBHAI CHIMANLAL PATEL 76/1 JAGABHAI PARK B/H.SUPER PETROL PUMP RAMBAG MANINAGAR AHMEDABAD PAN/GIR NO. : AAMPP 5447 L (APPELLANT) .. (RESPONDENT) AND CO NO.147/AHD/2010 A.Y. 2006-07 (ARISING OUT OF ITA NO.1127/AHD/2010) SHRI SUBHASHBHAI CHIMANLAL PATEL VS. ITO WARD -8(3) AHMEDABAD AHMEDABAD (CROSS OBJECTOR) .. (RESPONDENT) REVENUE BY : SHRI K.MADHUSUDAN SR.D.R. ASSESSEE BY : SHRI TUSHAR P.HEMANI O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL OF THE REVENUE ARISING FROM THE ORDER OF THE LEARNED CIT(APPEALS)-XIV AHMEDABAD DATED 27/01/20 10 PASSED FOR ASSESSMENT YEAR 2006-07 AND THE RESPONDENT-ASSESSEE IS IN CROSS OBJECTION. 2. THE REVENUE HAS CHALLENGED THE DELETION OF PENALTY OF RS.2 52 351/- LEVIED U/S.271E OF THE I.T. ACT 1961 . ITA NO.1127/AHD/2010(BY REVENUE) & CO NO.147/AHD/2010 (BY ASSESSEE) ITO VS. SH.SUBHASHBHAI CHIMANLAL PATEL ASST.YEAR - 2006-07 - 2 - 3. VIDE IMPUGNED PENALTY ORDER PASSED U/S.271E OF T HE I.T. ACT 1961 DATED 20/05/2009 IT WAS GATHERED THAT THE IMPUGNED PENALTY WAS IN RESPECT OF AN UNSECURED LOAN TAKEN FROM ONE SHRI JA YANTILAL BHAILALBHAI PATEL IT WAS FOUND THERE WAS AN OPENING BALANCE AS ON 01/04/2005 WAS OF RS.14 60 832/-. THE ASSESSEE HAS REPAID AN AMOUNT OF RS.2 52 351/- OTHERWISE THAN BY AN 'A/C PAYEE CHEQUE' OR ACCOUN T PAYEE BANK DRAFT. AS PER THE ASSESSING OFFICER THERE WAS A VIOLATION OF THE PROVISIONS OF SECTION 269-T OF THE I.T. ACT 1961. CONSEQUENTLY THE PENALTY U/S.271E OF THE I.T. ACT 1961 WAS LEVIED. HOWEVER WHEN TH E MATTER REACHED BEFORE THE FIRST APPELLATE AUTHORITY AFTER DETAILE D DISCUSSION IT WAS FOUND THAT THERE WAS A REASONABLE CAUSE FOR THE SAID TRAN SFER FOR READY REFERENCE THE FINDINGS GIVEN ON PARAGRAPH NO.2.3; REPRODUCED BELOW:- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS OF THE APPELLANT. I AM INCLINED TO ACCEPT THE CON TENTIONS OF THE APPELLANT BASED ON FACTS AND CIRCUMSTANCES OF THE C ASE AND WELL SUPPORTED BY VARIOUS JUDICIAL PRONOUNCEMENT IN THIS REGARD. HON'BLE ITAT AHMEDABAD A BENCH IN THE CASE OF NE PTUNE EQUIPMENT P.LTD. (ITA NO.2001 AND 2002 OF 2006 AND CROSS OBJECTION FROM REVENUE ITA NO.2066 AND 2067 OF 2006 FOR A.Y. 2002-03) VIDE ORDER DATED 26-06-2009 (THE APPELLANT RELIED ON THIS ORDER) DISCUSSED THE OBJECTIVE OF INTRODUCTION OF P ROVISIONS I.E. 269SS AND 269T VIDE PARA-6 ON THE BASIS OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ADIT (INV) V. KUMARI A.B. SHARTHI (2002) 255 ITR 258. IT ALSO CONSIDERED THE HON'BL E GUJARAT HIGH COURT JUDGMENT IN THE CASE OF CIT VS. BHAGWATIPRASA D BAJORIA (HUF) 263 ITR 487 AND HELD THAT THESE PROVISIONS WE RE MADE MAINLY IN RESPECT OF SEARCH AND SEIZURE CASES TO CU RB THE PRACTICE OF EXPLAINING UNACCOUNTED CASH IN THE GARB OF CASH LOANS. OTHER CASE LAW RELIED ON BY THE APPELLANT ALSO DEALT WITH THE CONDITIONS THAT SECTION 269T AND THEREFORE SECTION 271E DEALS IN THE CASES WHERE LOANS OR DEPOSITS ARE PAID THROUGH CASH WITHO UT ANY ITA NO.1127/AHD/2010(BY REVENUE) & CO NO.147/AHD/2010 (BY ASSESSEE) ITO VS. SH.SUBHASHBHAI CHIMANLAL PATEL ASST.YEAR - 2006-07 - 3 - SATISFACTORY EXPLANATION FOR SUCH REPAYMENT. THE A PPELLANT WHILE SUBMITTING THE DETAILS AND EXPLANATION HAD GIVEN SA TISFACTORY EXPLANATION WITH GENUINENESS OF SUCH TRANSACTION TH EREBY DISCHARGING ONUS AS CONTEMPLATED U/S.273 OF THE ACT . THE REPAYMENT OF ALREADY EXISTING LOAN OF RS.14 60 832/ - BY THE APPELLANT THROUGH ACCOUNT PAYEE CHEQUE AS WELL AS T HROUGH JOURNAL ENTRY OF RS.2 18 351/- AND TRANSFER OF SHAR ES OF HINDUSTAN PETROLEUM CORPORATION LTD. CANNOT BE HELD AS CONTRA VENTION OF SECTION 269T OF THE ACT. THE IDENTITY OF PARTIES I N THESE TRANSACTIONS ARE NOT IN DOUBT. FURTHER THE IDENTI TY OF SUCH REPAYMENT IS BONAFIDE. FURTHER ON BEING INQUIRED IN RESPECT OF REPAYMENT OF LOAN THROUGH TRANSFER OF SHARES OF M/S .HINDUSTAN PETROLEUM CORPORATION LTD. FOR RS.34 000/- IT WAS SUBMITTED THAT THE VALUE OF RS.34 000/- IS THE MARKET VALUE OF SHA RES OF HPCL AS ON 05-05-2005 AND THE RESULTANT CAPITAL GAIN (SINCE NO STATEMENT PAID) IS COMPUTED ON SUCH TRANSFER AND AP PELLANT HAD ALREADY PAID TAX ON THE SAME. IT IS REQUESTED THAT ON ACCOUNT OF SUCH PAYMENT NO ADVERSE INFERENCE BE DRAWN IN RE SPECT OF APPEAL. THE A.O. IS DIRECTED TO VERIFY THE APPELLA NT CONTENTION IN THIS REGARD AND IF REQUIRED NECESSARY CORRECTION CA N BE TAKEN. IN CONCLUSION THE PENALTY SO IMPOSED IS NOT JUSTIFIED AND A.O. IS DIRECTED TO DELETE THE SAME. 4. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES AS WELL AS IN THE LIGHT OF A JUDGMENT OF RESPECTED CO-ORDINATE BENCH B AH MEDABAD IN THE CASE OF DCIT VS. PAN DRUGS LIMITED ITA NO.2755 AND 2756/AHD/2006 ORDER DATED 23/12/09 WE HAVE FOUND THAT THE ISSUE APPEARS TO BE DIRECTLY COVERED IN ASSESSEES FAVOUR. NOW BEFORE US IN AD DITION TO THE ABOVE DECISION THREE MORE DECISIONS HAVE ALSO BEEN CITED . 4.1. A DECISION OF RESPECTED ITAT VISAKHAPATNAM T HIRD MEMBER BENCH IN THE CASE OF ASSTT.CIT VS. VINMAN FINANCE & LEASING LTD. REPORTED AS (2008) 115 ITD 115 HAS BEEN CITED FROM THE SIDE OF THE ITA NO.1127/AHD/2010(BY REVENUE) & CO NO.147/AHD/2010 (BY ASSESSEE) ITO VS. SH.SUBHASHBHAI CHIMANLAL PATEL ASST.YEAR - 2006-07 - 4 - REVENUE FOR THE PROPOSITION THAT MERELY BECAUSE A T RANSACTION IS GENUINE THE QUESTION OF CONTRAVENTION OF SECTION 269T OF TH E I.T. ACT 1961 AND CONSEQUENTLY LEVY OF PENALTY U/S.271E OF THE I.T. ACT 1961 DO SURVIVE. A GENUINE TRANSACTION DO NOT TAKE OUT OF SWEEP THE APPLICABILITY OF THE PENALTY PROVISIONS. HOWEVER IN THAT VERY DECISION THE QUESTION OF REASONABLE CAUSE AS PRESCRIBED U/S.273B OF THE I.T. ACT 1961 WAS DECIDED IN FAVOUR OF THE ASSESSEE AS POINTED OUT BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 4.2. FROM THE SIDE OF THE ASSESSEE A CASE WAS CITED IS BOMBAY CONDUCTORS AND ELECTRICALS LTD. VS. DY.CIT REPORTE D AS (1996) 56 TTJ (AHD) 580 [ITAT AHMEDABAD C BENCH] FOR THE PROPOS ITION THAT BONA FIDE BOOK ADJUSTMENT THOUGH A VIOLATION BUT BEING A VENIAL AND TECHNICAL IN NATURE AND NOT A STARK INFRACTION OF THE LAW DO NOT ATTRACT THE PENALTY. AN ANOTHER CITATION FROM THE SIDE OF THE ASSESSEE I S CIT VS. NOIDA TOLL BRIDGE CO. REPORTED AS 262 ITR 260 WHEREIN IT WAS HELD THAT IF A PAYMENT HAS BEEN MADE VIDE 'A/C PAYEE CHEQUES' ON BEHALF OF THE ASSESSEE THEN THERE WAS NO QUESTION OF LEVY OF PEN ALTY. THE RESPECTED CO-ORDINATE BENCH IN THE AFORESAID CITED DECISION H AS ALSO TAKEN THE SAME VIEW THAT SINCE THERE WAS ONLY BOOK ENTRIES ENTERED INTO BETWEEN THE PARTIES CONCERNED THEREFORE THERE WAS NO JUSTIFIC ATION OF LEVY OF THE IMPUGNED PENALTY. IT HAS ALSO BEEN HELD THAT ONCE THERE WAS A REASONABLE CAUSE THEN ALSO A PENALTY MUST NOT BE IMPOSED AS P RESCRIBED U/S.273B OF THE I.T. ACT 1961. IN THE LIGHT OF THE FINDINGS ON FACTS AS DETERMINED BY THE LEARNED CIT(APPEALS) WE HEREBY UPHOLD HIS VIEW AND DISMISS THE GROUND OF THE REVENUE. ITA NO.1127/AHD/2010(BY REVENUE) & CO NO.147/AHD/2010 (BY ASSESSEE) ITO VS. SH.SUBHASHBHAI CHIMANLAL PATEL ASST.YEAR - 2006-07 - 5 - 5. THROUGH THE CROSS OBJECTION THE CROSS-OBJECTOR HAS MISTAKENLY CHALLENGED THE ORDER OF THE ASSESSING OFFICER LEVYI NG THE PENALTY U/S.271E OF THE I.T. ACT 1961. DURING THE COURSE OF HEARING THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS ACCEP TED THIS FUNDAMENTAL MISTAKE HENCE PREFERRED NOT TO PRESS THE CROSS OB JECTION. THEREFORE WE DISMISS THE CROSS OBJECTION AS NOT PRESSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 6 TH AUGUST 2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 06 / 08 /2010 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV AHMEDABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD