The ITO.Ward-14(1),, Ahmedabad v. Shri Panachand Hiralal Lunechia, Ahmedabad

ITA 134/AHD/2011 | 2007-2008
Pronouncement Date: 11-11-2011 | Result: Dismissed

Appeal Details

RSA Number 13420514 RSA 2011
Bench Ahmedabad
Appeal Number ITA 134/AHD/2011
Duration Of Justice 9 month(s) 23 day(s)
Appellant The ITO.Ward-14(1),, Ahmedabad
Respondent Shri Panachand Hiralal Lunechia, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 11-11-2011
Date Of Final Hearing 04-11-2011
Next Hearing Date 04-11-2011
Assessment Year 2007-2008
Appeal Filed On 19-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. K. GARODIA AM) ITA NO.134/AHD/2011 A. Y.: 2007-08 THE INCOME TAX OFFICER WARD -14(1) AHMEDABAD 6 TH FLOOR NATURE VIEW BUILDING ASHRAM ROAD AHMEDABAD VS SHRI PANACHAND HIRALAL LUNECHIA G/4 SARAL APARTMENT JAIL ROAD SUBHASH BRIDGE AHMEDABAD PA NO. AAPPL 7558 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. MADHUSUDAN SR. DR RESPONDENT BY SHRI S. N. DIVETIA AR DATE OF HEARING: 04-11-2011 DATE OF PRONOUNCEMENT: 11-11-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XX I AHMEDABAD DATED 03-11-2010 FOR ASSESSMENT YEAR 2007-08 CHAL LENGING THE DELETION OF PENALTY LEVIED U/S 271D OF THE IT ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD BORROWED HUGE MONEY FROM HIS FRIENDS AND RELATIVES BECAUSE H E WANTED TO SHOW SUFFICIENT BANK BALANCE SO AS TO GET US VISA F OR HIS SON MAYUR LUNECHIA. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE AO CONDUCTED INQUIRY IN RELATION TO THE SAID BORROWING S AND FINALLY THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 25-08-2009 T REATING THE AFORESAID BORROWINGS AS GENUINE BUT THE AO REFERRE D THE MATTER TO ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 2 ADDL. CIT AHMEDABAD RANGE-14 AHMEDABAD FOR INITIA TING PENALTY U/S 271D OF THE IT ACT ON THE GROUND THAT THERE WAS VIOLATION OF THE PROVISIONS OF SECTION 269 SS OF THE ACT. BEFORE ADD L. CIT THE ASSESSEE SUBMITTED REPLY VIDE LETTER DATED 22-06-20 10. THE ASSESSEE HAD ALSO FURNISHED CONFIRMATION LETTER ALONG WITH B ANK STATEMENT OF THE DEPOSITORS TO PROVE HIS CASE. THE ADDL. CIT HAS REJECTED THE EXPLANATION FURNISHED BY THE ASSESSEE MAINLY ON THE GROUND THAT THE ASSESSEE HAD ADMITTED TO HAVE ACCEPTED THE DEPOSITS IN CASH BY CONTRAVENING THE PROVISIONS OF SECTION 269 SS AND N O REASONABLE CAUSE WAS FURNISHED. THE COUNSEL OF THE ASSESSEE VE HEMENTLY ARGUED BEFORE CIT(A) THAT THE ASSESSEE HAD CLEARLY STATED IN HIS REPLY THAT THE BORROWINGS WERE REQUIRED IN ORDER TO SHOW BANK BALANCE FOR GETTING VISA OF HIS SON AND THE TRANSACTION WERE FO UND TO BE GENUINE BY AO DURING THE ASSESSMENT. THE CONTENTIONS RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN HIS WRITTEN SUBMISSION DATED 21-10-2010 READS UNDER:- 3.1 'THE APPELLANT SUBMITS THAT THE IMPUGNED ORDER PASSED BY AO IS WHOLLY UNJUSTIFIED BOTH ON FACT AND IN LAW FOR THE FOLLOWING REASONS: (A) FIRSTLY THE AO HAS FAILED TO APPRECIATE THAT THE APPELLANT HAD NOT TAKEN ANY LOANS FROM THE 9 DIFFER ENT PARTIES BUT IT WAS AN ADVANCE FROM FRIENDS AND RELATIVES SO AS TO DECLARE SUFFICIENCY OF CAPITAL WITH HIM IN ORDER TO OBTAIN US VISA FOR HIS SON. THE APPELLANT HAD TAKEN TEMPORARY ACCOMMODATION FROM THE SAID PARTIES. THE AO HAS FAI LED TO APPRECIATE THAT IN ORDER TO ATTRACT THE PROVISIONS OF SEC.269SS THERE HAS TO BE A LOAN OR DEPOSIT BUT THE TERM 'LOA N' RELATES TO A TRANSACTION WHEREIN IT IS THE DUTY OF THE DEBTOR TO SEEK THE CREDITOR AND REPAY THE MONEY TO HIM OR TO REPAY THE MONEY ACCORDING TO THE AGREEMENT. IN CASE OF THE DEPOSIT IT IS ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 3 GENERALLY THE DUTY OF THE DEPOSITOR TO GO TO THE B ANKER OR THE PERSON WITH WHOM THE MONEY HAS BEEN DEPOSITED AND M AKE A DEMAND FOR THE REPAYMENT OF THE SAME. RECENTLY ITAT A'BAD BENCH IN CASE OF PARAS BRASS EXTRUSION LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (2004) 3 SOT 554 (AHD) HAS HELD THAT CASH DEPOSITS IN THE NATURE OF ACCOMMODATION ENTRIES BY SOME DIRECTORS AND MEMBERS IN THE COMPANY'S BANK ACCOUNT FOR PURPOSES OF DECLARATION UNDER VDIS UNDER BONA FIDE BELIEF THAT IT WILL CREATE BET TER EVIDENCE CONSTITUTED REASONABLE CAUSE AND NO PENALTY UNDER S . 27ID WAS LEVIABLE. SIMILARLY IN THE PRESENT CASE THE APPEL LANT BONAFIDE BELIEVE THAT ACCOMMODATION ENTRIES FROM FRIENDS AND RELATIVES SO AS TO PRESENT A BETTER FINANCIAL POSITION WAS NO T IN CONTRAVENTION OF SEC.269SS. (B) SECONDLY THE APPELLANT SUBMITS THAT PRESUMING FOR THE SAKE OF ARGUMENT THAT THE BORROWINGS FROM THE F RIENDS AND RELATIVES WERE IN THE NATURE OF LOAN OR DEPOSITS WI THIN THE MEANING OF SEC. 269SS OF THE ACT THERE WAS A SUFFI CIENT CAUSE FOR ACCEPTING THE SAME IN CASH. THE AO HAS FAILED T O APPRECIATE THAT THE APPELLANT'S SON HAD MADE APPLICATIONS FOR US VISA FIRSTLY ON 16.11.2006 THEREAFTER ON 14.12.2006 AND LASTLY ON 3.4.2007. THE APPLICANT HAS TO FILE ALONG WITH THE VISA APPLICATION VARIOUS DOCUMENTS INCLUDING BANK BALAN CE CERTIFICATE AND AFFIDAVIT OF SUPPORT OF THE PARENTS . THE DETAILS OF THE SAID DOCUMENTS ARE ENCLOSED AT P. 38 40 OF THE PAPER BOOK. THE APPELLANT UNDERSTANDS THAT THE BANK BALAN CE CERTIFICATE IS REQUIRED BY THE EMBASSY IN ORDER TO ASCERTAIN WHETHER THE APPLICANT EITHER BY HIMSELF OR BY HIS P ARENTS WOULD BE IN A POSITION TO SUPPORT FOR EDUCATION AND MAINT ENANCE EXPENSES DURING THE PERIOD OF STUDY AT U.S.A. IN OT HER WORDS THE EMBASSY IS KEEN TO ASCERTAIN THAT THE FOREIGN S TUDENT WOULD NOT BE A LIABILITY AND CARRY OUT THE STUDY FROM HIS OWN FINANCE RATHER THAN DEPENDING UPON THE SOURCES IN U.S.A. HE NCE THE APPELLANT WAS TOLD BY THE VISA CONSULTANT THAT HE W OULD BE REQUIRED TO HAVE BANK BALANCE AROUND RS.15 LAKHS. ACCORDINGLY THE APPELLANT HAD BORROWED MONEY FROM DIFFERENT PARTIES IN ORDER TO BUILD UP BANK BALANCE TO BE SHO WN WHILE GOING FOR VISA CALL. THE BANK CERTIFICATE DATED 1.1 2.2006 IS ENCLOSED HEREWITH (P.4). THEREAFTER APPELLANT'S SO N ONCE ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 4 AGAIN MADE AN APPLICATION FOR VISA ON 14.12.2006 B UT IT WAS ONCE AGAIN REJECTED. IT WILL BE APPRECIATED THAT SI NCE THE VISA WAS REJECTED THE APPELLANT STARTED .REPAYING THE S AID BORROWINGS TO THE SAID PARTIES IN JANUARY 2007 FRO M TIME TO TIME. THE APPELLANT'S SON MADE A THIRD ATTEMPT FOR US VISA ON 3.4.2007 AND IN ORDER TO HAVE A SUFFICIENT CASH BAL ANCE THE APPELLANT ONCE AGAIN MADE BORROWINGS FROM DIFFERENT PARTIES AND DEPOSITED IN THE BANK IN THE MONTH OF APRIL 20 07. THUS A SIZEABLE BALANCE OF RS.15 14 792 WAS ACCUMULATED ON 3.5.2007 WHICH IS EVIDENT FROM BANK CERTIFICATE DAT ED 4.5.2007 (P. 5). THE APPELLANT'S SON HAD RECEIVED INTERVIEW CALL ON 7.5.2007 FROM THE EMBASSY AND HE GOT THE US VISA FO R 5 YEARS. (P. 13). THEREFORE THE APPELLANT STARTED REPAYMENT THE SAID BORROWINGS TO THE SAID PARTIES IMMEDIATELY FROM 10. 5.2007 WHICH IS EVIDENT FROM THE XEROX COPY OF BANK PASS B OOK FOR APRIL AND MAY 2007. (P.). IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE IT IS CLEARLY ESTABLISHED BY THE APPELLANT TH AT THE SAID BORROWINGS WERE MERE ACCOMMODATION FOR THE PURPOSE OF VISA CALL OF HIS SON AND THE APPELLANT BONA FIDE BELIEVE THAT THE SAME COULD BE ACCEPTED IN CASH. THERE WAS ALSO URGE NCY IN THE SENSE THAT BOTH AT THE TIME OF MAKING APPLICATION A S WELL AS INTERVIEW CALL THERE HAS TO BE SUFFICIENT CASH BAL ANCE AND HENCE THE APPELLANT DID NOT ACCEPT BANK CHEQUE OR D EMAND DRAFT FROM THEM. (C) THIRDLY THE APPELLANT SUBMITS THAT THE BORROWINGS FROM THE AFORESAID PARTIES HAVE BEEN FOUND TO BE GE NUINE BY AO DURING THE COURSE OF REGULAR ASSESSMENT AS HE H AD MADE DETAILED ENQUIRY IN THIS REGARD AND ULTIMATELY NO A DDITION WAS MADE U/S.68 OF THE ACT AS UNEXPLAINED CASH CREDIT. IT WILL BE APPRECIATED THAT THE LEGISLATIVE INTENTION BEHIND T HE ENACTMENT OF THIS PROVISION IS TO PREVENT THE PARTIES SEARCHE D TO EXPLAIN AWAY HIS UNACCOUNTED MONEY BY WAY OF CASH LOAN OR DEPOSITS. (REFER TO CBDT'S CIRCULAR NO. 387 DT. 6TH JULY 198 4 AND THE FIRST PARA OF THE SAID CIRCULAR WHICH IS AS FOLLOWS : 'UNACCOUNTED CASH FOUND IN THE COURSE OF SEARCHES CARRIED OUT BY THE IT DEPARTMENT IS OFTEN EXPLAINED BY THE ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 5 TAXPAYERS AS REPRESENTING LOANS TAKEN FROM VARIOUS PERSONS. UNACCOUNTED INCOME IS ALSO BROUGHT INTO TH E BOOKS OF ACCOUNT IN THE FORM OF SUCH LOANS AND TAX PAYERS ARE ALSO ABLE TO GET CONFIRMATORY LETTERS FROM SUCH PERSONS IN SUPPORT OF THEIR EXPLANATIONS.' RELYING UPON THE ABOVE CIRCULAR IT IS SUBMITTED TH AT IT IS VERY CLEAR THAT ONLY IF SOME UNACCOUNTED MONEY WAS INVOL VED THEN THE SECTION BECOMES APPLICABLE AND IN THE CASE OF T HE APPELLANT THERE IS NO DISPUTE WHATSOEVER ABOUT THE SOURCE OF MONEY. EVEN HON. SUPREME COURT IN THE CASE OF KUM. A.B. SANTHI (255 ITR 258) IT IS HELD THAT IF THERE WAS A GENUINE AND BONA FIDE TRANSACTION AND IF FOR ANY REASON THE AS SESSEE COULD NOT GET A LOAN OR DEPOSIT BY A/C. PAYEE CHEQUE OR D EMAND DRAFT FOR SOME BONA FIDE REASONS THE AUTHORITY VESTED WI TH THE POWER TO IMPOSE PENALTY HAS GOT DISCRETIONARY POWER. ACCO RDINGLY IT IS SUBMITTED THAT IN THE PRESENT CASE THE BORROWINGS H AVE BEEN FOUND TO BE GENUINE AND HENCE NO PENALTY U/S.271D IS ATTRACTED.' 3. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE AND MATERIAL ON RECORD ACCEPTED THE EXPLAN ATION OF THE ASSESSEE THAT THE ASSESSEE HAD A REASONABLE CAUSE F OR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW AND ACCORDINGLY C ANCELLED THE PENALTY. HIS FINDINGS IN THE IMPUGNED ORDER ARE REP RODUCED AS UNDER: 4.4 I HAVE GONE THROUGH THE ORDER PASSED BY THE A DDL. CIT AS WELL AS WRITTEN SUBMISSIONS OF THE APPELLANT . I HAVE ALSO PERUSED THE PAPER BOOK FILED BY THE APPELLANT IN SUPPORT OF HIS CONTENTION RELATING TO US VISA OF HI S SON. THE APPELLANT HAS CONTENDED THAT HIS SON'S VISA APPLICATION WAS TWICE REJECTED BY US EMBASSY AND WH ILE MAKING ONE MORE APPLICATION AS A LAST CHANCE ON 03.04.2007 THE APPELLANT WAS TOLD THAT HE SHOULD S HOW SUFFICIENTLY LARGE BANK BALANCE TO THE EMBASSY AUTH ORITIES BECAUSE THE EMBASSY EXAMINED THE FINANCIAL POSITION OF THE STUDENT AND HIS PARENTS SO THAT THE STUDENT MAY NOT ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 6 PROVE A LIABILITY DURING HIS STAY IN USA AND MEET W ITH THE FINANCIAL REQUIREMENTS TOWARDS EDUCATION AND MAINTENANCE ON HIS OWN. THE APPELLANT HAS CONTENDED THAT HE IS SIMPLY A RETIRED FINE ARTS COLLEGE TEACH ER AND HAD NOT SUFFICIENT MONEY TO SHOW SUCH A HUGE BANK BALANCE AND HE HAD NO ALTERNATIVE BUT TO MAKE BORROWINGS FROM HIS FRIENDS AND RELATIVES. THEREFOR E HE HAD BORROWED MONEY FROM THEM IN JANUARY 2007 AND ONWARDS IN VIEW OF THE VISA APPLICATION WAS TO BE M ADE IN THE FIRST WEEK OF APRIL 2007 AND THERE HAS TO BE SUFFICIENT BANK BALANCE AT LEAST FOR COUPLE OF MONT HS FROM THIS DATE. THE APPELLANT HAS FILED VOLUMINOUS EVIDE NCE TO PROVE THAT THE SAID BORROWINGS WERE MADE ONLY FOR V ISA PURPOSES AND THIS EXPLANATION HAS BEEN FOUND SATISFACTORY EVEN BY AO IN THE ASST. PROCEEDINGS. THEREFORE IT IS NOT A MATTER OF DISPUTE. THE APPELL ANT HAS ALSO CONTENDED THAT HE WAS UNDER A GENUINE AND BONA FIDE BELIEF THAT THE ACCOMMODATION ENTRIES FOR PERS ONAL PURPOSES COULD BE TAKEN IN CASH. I AM INCLINED TO A CCEPT THE CONTENTIONS OF THE APPELLANT BASED ON FACT AND CIRCUMSTANCES OF THE CASE AND WELL SUPPORTED BY VAR IOUS JUDICIAL PRONOUNCEMENT IN THIS REGARD. THE BELIEF ENTERTAINED BY THE APPELLANT CONSTITUTED A REASONAB LE CAUSE AS PRESCRIBED U/S 27ID OF THE ACT. THEREFORE THE PENALTY U/S 27ID IS NOT ATTRACTED. 4.5 THERE IS ALSO SUBSTANCE IN THE CONTENTION OF T HE APPELLANT WHEN THE AO HAS ACCEPTED THE TRANSACTIONS AS GENUINE AFTER MAKING NECESSARY INQUIRIES DURING THE COURSE OF ASST. PROCEEDINGS AND THE BORROWINGS HAVE BEEN FOUND TO BE GENUINE THE PENALTY U/S 27ID IS N OT SUSTAINABLE. THE APPELLANT HAS RELIED UPON THE DECI SION OF HONBLE SUPREME COURT IN CASE OF KUM. A. B. SHANTHI [255 ITR 258] WHEREIN IT HAS BEEN HELD AS UNDER:- 'THE OBJECT OF INTRODUCING S. 269SS IS TO ENSURE THAT A TAXPAYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY OR IF HE HAS GIVEN SOME FALSE ENTRIES IN HIS ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 7 ACCOUNTS HE SHALL NOT ESCAPE BY GIVING FALSE EXPLANATION FOR THE SAME. DURING SEARCH AND SEIZURES UNACCOUNTED MONEY IS UNEARTHED AND THE TAXPAYER WOULD USUALLY GIVE THE EXPLANATION THAT HE HAD BORROWED OR RECEIVED DEPOSITS FROM HIS RELATIVES OR FRIENDS AND IT IS EASY FOR THE SO-CALLED LENDER ALSO TO MANIPULATE HIS RECORDS LATER TO SUIT THE PLEA OF THE TAXPAYER. THE MAIN OBJECT OF S. 269SS WAS TO CURB THIS MENACE. AS REGARDS THE TAX LEGISLATIONS IT IS A POLICY MATTER AND IT IS FOR THE PARLIAMENT TO DECIDE IN WHICH MANNER THE LEGISLATION SHOULD BE MADE. OF COURSE IT SHOULD STAND THE TEST OF CONSTITUTIONAL VALIDITY. THE OBJECT SOUGHT TO BE ACHIEVED WAS TO ERADICATE THE EVIL PRACTICE OF MAKING OF FALSE ENTRIES IN THE ACCOUNT BOOKS AND LATER GIVING EXPLANATION FOR THE SAME. TO A GREAT EXTENT THE PROBLEM COULD BE SOLVED BY THE IMPUGNED PROVISION. IN VIEW OF THE AFORESAID CIRCUMSTANCES S. 269SS IS NOT IN ANYWAY VIOLATIVE OF ART. 14 OF THE CONSTITUTION.' 4.6 THERE IS YET ANOTHER ASPECT OF THE MATTER. THE PROVISIONS OF SEC.269SS AND 269T HAVE BEEN INSERTED WITH A VIEW TO CUT THE TAX EVASION BY EXPLAINING AW AY CASH FOUND DURING THE SEARCH AND SEIZER OPERATIONS AS LOAN TAKEN FROM VARIOUS PERSONS. THE APPELLANT HAS RELIED UPON CBDT CIRCULAR NO.387 DTD.06.07.1984 IN SUPPORT OF THIS PROPOSITION AND THE RELEVANT PORTION OF THE SA ID CIRCULAR READS AS UNDER:- 'UNACCOUNTED CASH FOUND IN THE COURSE OF SEARCHES CARRIED OUT BY THE IT DEPARTMENT IS OFTEN EXPLAINED BY THE TAXPAYERS AS REPRESENTING LOANS TAKEN FROM VARIOUS PERSONS. UNACCOUNTED INCOME IS ALSO BROUGHT INTO THE BOOKS OF ACCOUNT IN THE FORM OF SUCH LOANS AND TAXPAYERS ARE ALSO ABLE TO GET CONFIRMATORY LETTERS FROM SUCH PERSONS IN SUPPORT O F THEIR EXPLANATIONS.' ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 8 5. I ALSO FIND THAT VARIOUS BENCHES OF TRIBUNAL INCLUDING AHMEDABAD BENCH HAS TAKEN A CONSISTENT VI EW IN THIS REGARD. THE APPELLANT HAS RELIED UPON THE D ECISION IN CASE OF RAKESH ENTERPRISES LTD. ANAND V/S ADDL. CIT [ITA NO.3912/AHD/07 DTD.06.04.2010] WHEREIN IT HAS BEEN HELD AS UNDER:- '5. AFTER HEARING THE LEANED D.R WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. TH E ASSESSING OFFICER HAS LEVIED THE PENALTY U/S 271E ON THE GROUND OF CONTRAVENTION OF SECTION 269T OF THE ACT. HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD VS. STATE OF ORISSA (83 ITR 261 HAS HELD THAT PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF T HE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN WHEN THE MINIMUM PENALTY IS PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING FOR IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF T HE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE PARTIES INVOLVED AND ALSO THE TRANSACTION ARE NOT UNGENUINE. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEFS THAT HUNDI WAS A BILL OF EXCHANGE WHICH WAS DRAWN ACCOUNT PAYEE. IN OUR CONSIDERED VIEW THIS BONAFIDE BELIEF CONSTITUTE A REASONABLE CAUSE WITHI N THE SECTION 273B OF THE INCOME-TAX ACT 1961. IN VIEW OF THIS THE PENALTY OF RS.6 56 061/- LEVIED B Y THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) CANNOT BE SUSTAINED AND AS SUCH THE SAME IS HEREBY DELETED.' 6. IN VIEW OF THE AFORESAID FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS POSITION IN LAW I HEREBY DELET E THE PENALTY OF RS.10 50 000/- LEVIED U/S 27ID BY ADDL. CIT. ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 9 4. THE LEARNED DR RELIED UPON THE ORDER OF THE AO. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE IS A RETIRED TEACHER AND DUE TO THE DE POSITS TO BE MADE IN THE BANK ACCOUNT FOR OBTAINING VISA FOR HIS SON THE ASSESSEE BORROWED MONEY FROM DIFFERENT PERSONS AND MADE DEPO SIT TO SHOW SUFFICIENT BANK BALANCE IN THE ACCOUNT. THE LEARNED CIT(A) RIGHTLY HELD THAT IT CONSTITUTED A REASONABLE CAUSE FOR FAI LURE TO COMPLY WITH PROVISIONS OF LAW. HE HAS RELIED UPON THE ORDER OF ITAT HYDERABAD BENCH IN THE CASE OF ANDHRA BOMBAY CARRIERS VS ADDL . CIT 132 ITD 1 IN WHICH IT WAS HELD THAT WHEN THE ASSESSEE HAD T AKEN CASH LOANS FROM ITS EMPLOYEES DUE TO SHORTAGE OF CASH IN A PAR TICULAR BRANCH WHICH WAS IMMEDIATELY PAID TO THE CREDITORS WOULD CONSTITUTE A REASONABLE CAUSE U/S 273B OF THE IT ACT FOR TAKING LOAN IN CASH. HE HAS THEREFORE SUBMITTED THAT THE APPEAL OF THE RE VENUE MAY BE DISMISSED. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE ASSESSEE HA S EXPLAINED THE REASONS FOR OBTAINING CASH FOR DEPOSIT IN THE BANK ACCOUNT IN ORDER TO SHOW SUFFICIENT BANK BALANCE SO THAT HE COULD GET U S VISA FOR HIS SON. THE CIRCUMSTANCES EXPLAINED BY THE ASSESSEE WO ULD DEFINITELY CONSTITUTE A REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW. SECTION 273B OF THE IT ACT PROVIDES THAT N O PENALTY SHALL BE IMPOSABLE ON THE PERSONS OR THE ASSESSEE AS THE CAS E MAY BE FOR ANY FAILURE REFERRED TO IN THE ABOVE PROVISIONS IF THE ASSESSEE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAIL URE. NOTHING IS ITA NO.134/AHD/2011 THE ITO WARD 14(1) AHMEDABAD VS SHRI PANCHAND HIR ALAL LUNECHIA 10 PRODUCED BEFORE US TO REBUT THE FINDINGS OF THE LEA RNED CIT(A). WE CONFIRM HIS FINDINGS AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD