The ITO, Ward-4,, Navsari v. Smt. Sapna Sandip Shah, Navsari

ITA 1675/AHD/2010 | 2006-2007
Pronouncement Date: 29-04-2014 | Result: Dismissed

Appeal Details

RSA Number 167520514 RSA 2010
Assessee PAN BIBPS7458K
Bench Ahmedabad
Appeal Number ITA 1675/AHD/2010
Duration Of Justice 3 year(s) 11 month(s) 10 day(s)
Appellant The ITO, Ward-4,, Navsari
Respondent Smt. Sapna Sandip Shah, Navsari
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 29-04-2014
Date Of Final Hearing 23-04-2014
Next Hearing Date 23-04-2014
Assessment Year 2006-2007
Appeal Filed On 19-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMADABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND .. ! '# '# '# '# SHRI T.R. MEENA ACCOUNTANT MEMBER $%.. &' ( & ! ) & ! ) & ! ) & ! ) ITA NO. 1675/AHD/2010 ASSESSMENT YEAR :2006-07 INCOME-TAX OFFICER WARD-4 NAVSARI V/S . SMT. SAPNA SANDIP SHAH GAJRA NIVAS JAIN SOCIETY SAYAJI ROAD NAVSARI PAN NO. BIBPS7 458K (APPELLANT) .. (RESPONDENT) *+ - & / BY APPELLANT SHRI O. P. MEENA SR. D.R. ./*+ - & /BY RESPONDENT SHRI ANKIT TALSANIA A.R. 0 1%' /DATE OF HEARING 23.04.2014 234 1%' /DATE OF PRONOUNCEMENT 29.04.2014 O R D E R PER : SHRI T.R.MEENA ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A) VALSAD ORDER DATED 05.01.2010 FOR A.Y. 2006-2007. THE SOLE GROUND OF APPEAL IS AGAINST DELETING THE PENALTY LEVIED BY TH E ADDL. CIT NAVSARI U/S. 271D OF THE IT ACT FOR RS.6 41 000/-. 2. IN THIS CASE ASSESSMENT ORDER U/S.143(3) WAS PA SSED ON 30.12.2008 FOR A.Y.06-07. LD. A.O. NOTICED VARIOUS CASH LOANS DURING THE COURSE OF ASSESSMENT PROCEEDING. THEREFORE HE REFERRED PENA LTY U/S. 271D TO THE ADDL. CIT NAVSARI. THE ADDL. CIT NAVSARI HAD OFFERED RE ASONABLE OPPORTUNITY OF BEING ITA NO. 1675/AHD/2010 ITO VS. SMT. SAPNA SANDIP SHA H A.Y. 2006-2007 PAGE 2 HEARD WHICH WAS AFFORDED BY THE ASSESSEE VIDE HER LETTER DATED 11.08.2009 WHICH HAS BEEN PRODUCED BY THE ADDL. CIT ON PAGE NO .2 TO 5. THE LD. ADDL. CIT AFTER CONSIDERING THE ASSESSEES REPLY HAS HELD THAT ASSESSEE HAD TAKEN ADVANCES FROM FOUR PARTIES TO THE TUNE OF RS.6 41 0 00/-. THE RECEIPT OF ADVANCE WAS NOTHING BUT THE LOAN/DEPOSIT IN FORM OF THE CASH. THIS ATTRACTED VIOLATION OF PROVISION U/S. 269SS. THEREFORE PENA LTY U/S. 271D OF THE IT ACT IS APPLICABLE. THUS HE LEVIED PENALTY AT RS.6 41 000 /- ON THE ASSESSEE. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). AFTER CONSIDERING THE ASSESSEES REPLY HE ALLOWED THE ASSESSEES APP EAL BY OBSERVING AS UNDER: 6.7 I HAVE CAREFULLY CONSIDERED THE OBSERVATION S OF THE AO AS WELL AS THE RIVAL CONTENTIONS. I FIND THAT THE AO HAS IN FA CT NOT APPRECIATED THE FACT THAT THE ADVANCES RECEIVED FOR PURCHASE OF ASSETS C AN NOT BE TERMED AS 'LOAN' OR 'DEPOSIT' COMING WITHIN THE MEANING OF SE C.269SS. HOWEVER THE AR ARGUED THAT AS THESE AMOUNT RECEIVED BY THE APPE LLANT IS ONLY ADVANCES RECEIVED BY HER FOR PURCHASE OF ASSETS ON BEHALF OF THESE PARTIES OR CREDITORS THE SAME CANNOT BE TREATED AS 'LOAN' OR 'DEPOSIT' WITHIN THE MEANING OF SEC.269SS. THE CONTENTION OF THE APPELLANT SOUNDS TO BE CORRECT AS THE SAME HAS BEEN VERIFIED FROM TH E STATEMENT ON OATH RECORDED BY THE AO IN WHICH THE PARTIES CONFIRMED T HAT THEY HAVE ADVANCED RESPECTIVE AMOUNTS TO THE APPELLANT AGAINS T PURCHASE OF ASSET. I HAVE ALSO CONSIDERED THE RATIO LAID DOWN IN THE CAS ES UPON WHICH THE AR HAS RELIED AND THOSE UPON WHICH THE AO HAS PLACED H IS RELIANCE. ON CAREFULLY GOING THROUGH THE FACTS OF THE CASE AND R ATIO LAID DOWN IN THESE LEGAL PRECEDENTS I FIND FORCE IN THE CONTENTIONS O F THE APPELLANT AND ESPECIALLY ON THE LEGAL PRONOUNCEMENTS I.E. CIT US. NOIDA TOLL BRIDGE CO. LTD. 262 ITR 260 (DEL); CIT VS. GOVIND KUNIAR ( 2002) 253 ITR 103 (RAJ); SUNFLOWER BUILDERS (P) LTD. VS. DCIT (1997) 61 ITD (PN.) 227; CIT VS. INDORE PLASTICS (P) LTD. (2002) 124 TAXMAN 729 (MP) CIT VS. ITA NO. 1675/AHD/2010 ITO VS. SMT. SAPNA SANDIP SHA H A.Y. 2006-2007 PAGE 3 KHARAITI LAL & CO. (2004) 270 ITR 445 (P & H) KARN ATAKA GINNING & PRESSING FACTORY VS. JCIT (2001) 77 ITD 478 (MUM.) EETACHI AGENCIES 248ITR 525 (BOM.) ETC. CIT VS. AJANATA DY EING & PRINTING MILLS (2003) 264 ITR 505 (RAJ-) ETC. AS THE FACTS OF THESE CASES ARE IDENTICAL AND APPLICABLE TO THE APPELLANT'S CASE AN D BASED UPON THE STATEMENTS RECORDED BY THE AO CONFIRMATIONS AND AF FIDAVITS FILED I HOLD THAT THESE AMOUNTS STANDING AS LIABILITY IN THE APP ELLANT'S BALANCE SHEET ARE NOTHING BUT 'ADVANCES' FOR PURCHASE OF FIXED AS SETS WHICH DOES NOT ATTRACT PENALTY U/S.271D AS IT IS NOT A LOAN OR DEPOSIT WITHIN THE MEANING OF SEC.68 R.W.S.269SS. THEREFORE AM INCLINED TO A GREE WITH THE CONTENTIONS OF THE APPELLANT AND I DELETE THE PENAL TY OF RS.6 41 000/- LEVIED BY THE A.O. THE APPELLANTS GROUND NO.1 2 AND 3 ARE ALLOWED. 4. NOW REVENUE IS BEFORE US. LD. SR. D.R. RELIED U PON THE ORDER OF THE ADDL. CIT WHEREAS LD. COUNSEL FOR THE ASSESSEE SUB MITTED AS UNDER: ON VERIFICATION OF THE CAPITAL ACCOUNT OF THE APPE LLANT IT WAS THE OBSERVATION OF THE ID. AO THAT THE APPELLANT HAS BO RROWED LOAN OF RS.6 41 0007- FROM FOLLOWING FOUR PERSONS IN CASH IN VIOLATION OF PROVISIONS OF S.269SS OF THE ACT AND ACCORDINGLY THE ID. AO LEVIED PENALTY OF RS.6 41 000/- U/S 271D OF THE ACT. 1. PUSHPABEN S. BOTHARA 2 10 000/- 2. SANDIP S. BOTHARA 2 31 000/- 3. SHRI KALAR @ AMIT S. JAIN 1 00 000/- 4. SHRI SURESH KHALAS 1 00 000/- TOTAL 6 41 000/- THE ID AO HAS FAILED TO APPRECIATE THAT THE AMOUNT RECEIVED WAS NOTHING BUT THE ADVANCES GIVEN BY THE RESPECTIVE PERSON TO BUY ASSETS AND ON BEHALF OF THEM. THE ID. AO HAS FURTHER FAILED TO APPRECIATE THAT EV EN THE RESPECTIVE PERSONS HAVE ALSO CONFIRMED IN THEIR AFFIDAVIT INAS MUCH AS IN STATEMENT RECORDED BY THE AO THAT THEY HAD PROVIDED ADVANCES TO THE APPELLANT TO BUY ASSETS / MUTUAL FUNDS AND THEY HAD NEVER PROVID ED ANY LOAN / DEPOSITS TO THE APPELLANT AS CONTEMPLATED IN S.269SS OF THE ACT. COPY OF THE ITA NO. 1675/AHD/2010 ITO VS. SMT. SAPNA SANDIP SHA H A.Y. 2006-2007 PAGE 4 AFFIDAVIT INASMUCH AS STATEMENTS ARE PLACED ON PG. NOS. 9 TO 52 OF P/B. THE ID. AO FAILED TO APPRECIATE THAT THAT WHEN UND ERLYING RECEIVED AMOUNT IS IN THE NATURE OF ADVANCES FOR THE PURPOSE OF BUY ING ASSETS AND IF THE SAME IS NOT IN THE NATURE OF LOAN OR DEPOSITS PROV ISIONS OF S.269SS OF THE ACT CANNOT BE INVOKED SO AS TO LEVY PENALTY U/S 271 D OF THE ACT. THE LD. CIT(A) AFTER TAKING INTO ACCOUNT THE FACTS OF THE CASE AND EVIDENCES VIDE PARA 6.7 HAS ALSO STATED THAT THE I MPUGNED AMOUNT RECEIVED WAS NOT IN THE NATURE OF LOAN OR DEPOSITS AS CONTEMPLATED IN S.269SS OF THE ACT BUT WAS IN THE NATURE OF ADVANC ES FOR THE PURPOSE OF BUYING ASSETS. THE ID. CIT(A) VIDE PARA 6.7 HAS RIG HTLY RELIED UPON THE LEGAL PRECEDENTS TO HOLD THAT THE IMPUGNED AMOUNT I S NOTHING BUT THE ADVANCES FOR THE PURPOSE OF FIXED ASSETS WHICH DOE S NOT ATTRACT PENALTY U/S 271D OF THE ACT AS IT IS NOT A 'LOAN' OR 'DEPOS ITS' WITHIN THE MEANING OF S.269SS OF THE ACT. HENCE THE ID. CIT(A) HAS RIGHT LY DELETED PENALTY LEVIED U/S 271D OF THE ACT. IT IS WELL SETTLED PROPOSITION OF LAW THAT WHEN THE AMOUNT RECEIVED IS NOT IN THE NATURE OF LOAN OR DEPOSITS PROVISIONS OF S.269 SS OF THE ACT CANNOT BE APPLIED. RELIANCE IS PLACED ON FOLLOWING AUTHORITIE S: (A) CIT VS. KAILASH CHANDRA DEEPAK KUMAR 317 ITR 35 1 (ALL) (B) BHIKHABHAI DHANJIBHAI PATEL VS. AC1T 127 TTJ 47 9 (AHD.) (C) CIT VS. SREE KRISHNA PROMOTERS & BUILDERS 16 TA XMAN.COM 138 (KAR.) (D) DCIT VS. FORGING LTD. 138 ITD 143 (DEL) (E) CIT VS. KHARAITI LAL & CO. 270 ITR 445 (P&H) (F) DCIT VS. SAHARA INDIA COMMERCIAL CORP. LTD. 147 ITD 176 (DEL) HE REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ADVANCES RECEIVED BY THE ASSESSEE FOR PURCHASE OF ASSETS CANNOT BE HELD AS LOAN OR DEPOSIT AS PRESCRIBED IN SECTION 269SS. THE LD. A.O. HAS RECORDED THE STATEMENT OF LENDERS WHO HAD CONFIRMED ON OATH ITA NO. 1675/AHD/2010 ITO VS. SMT. SAPNA SANDIP SHA H A.Y. 2006-2007 PAGE 5 BEFORE THE A.O. AND ALSO FILED THE AFFIDAVITS THAT THEY HAD ADVANCED MONEY TO THE APPELLANT AGAINST PURCHASE OF ASSETS. THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE SQUARELY APPLICABLE. THUS WE CONFIRM THE ORDER OF THE CIT(A). 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29.04.2014 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA &5 &5 &5 &5 .16 .16 .16 .16 7&641 7&641 7&641 7&641 / COPY OF ORDER FORWARDED TO:- 1. *+ / APPELLANT 2. ./*+ / RESPONDENT 3. ## 1 ; / CONCERNED CIT 4. ;- / CIT (A) 5. 6? .1 / DR ITAT AHMEDABAD 6. A BC / GUARD FILE. BY ORDER/ &5 & / # )