ITO, New Delhi v. M/s Kistursons Plylam Pvt. Ltd.,, Delhi

ITA 5395/DEL/2013 | 2007-2008
Pronouncement Date: 14-11-2014 | Result: Dismissed

Appeal Details

RSA Number 539520114 RSA 2013
Assessee PAN AAACK1086B
Bench Delhi
Appeal Number ITA 5395/DEL/2013
Duration Of Justice 1 year(s) 1 month(s) 11 day(s)
Appellant ITO, New Delhi
Respondent M/s Kistursons Plylam Pvt. Ltd.,, Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 14-11-2014
Date Of Final Hearing 14-10-2014
Next Hearing Date 14-10-2014
Assessment Year 2007-2008
Appeal Filed On 03-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI SHRI T.S. KAPOOR ACCOUNTANT MEMBER AND BEFORE SHRI A.T. VARKEY JUDICIAL MEMBER ITA NO . 5395 /DEL/ 2013 ASSESSMENT YEAR : 2007 - 08 ITO VS. KISTURSONS PLYLAMM PVT. LTD. WARD 5(3) 1 MELA RAMA MARKET NEW DELHI. 913/17 CHOTTA CHIPPIWARA CHAWRI BAZAR DELHI. AAACK1086B (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIVEK NANGIA SR. DR RESPONDENT BY: SH. KAPIL GOEL ADV. ORDER PER A.T. VARKEY J.M. THIS DEPARTMENTAL APPEAL ARISES AGAINST THE ORDER OF LD. CIT(A) - VII DATED 19 TH JULY 2013 FOR A.Y. 2007 - 08. 2. THE SOLITARY ISSUE RELATES TO DELETION OF LEVY OF PENALTY OF RS. 6 LAKHS U/S 271D OF THE INCOME TAX ACT 1961 (HEREIN AFTER THE ACT) . 3. ACCO RDING TO THE AO THE ASSESSEE HAD ACCEPTED SHARE APPLICATION MONEY OF RS. 6 LAKHS IN CASH FROM M/S PETAL CARE INDIA PVT. LTD. WHICH CONSTITUTED INFRINGEMENT OF SEC. 269SS OF THE ACT. AND AS SUCH HE LEVIED PENALTY OF RS. 6 LAKH U/S 271D OF THE ACT. 4. THE LD. CIT(A) DELETED THE SAME FOLLOWING THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. I.P. INDIA PVT. LTD. 343 ITR 353(DEL.). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE CASE LAW CITED BEFORE US AND THE RECORDS. TH E LD. DR REFERRED TO THE ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAMORA IN ITA NO. ITA NO. 5395 /D/ 2013 KISTURSONS P. LTD. 2 313/2006. WE HAVE GONE THROUGH THE SAID CASE LAW AND THE SAME IS NOT APPLICABLE AS IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE AMOUNT WAS RECEIVE D BY WAY OF SHARE APPLICATION MONEY WHICH WAS NOT THE CASE IN SAMORA CASE WHERE THE ASSESS INITIAL STAND WAS THAT THE SUM RECEIVED WAS UNSECURED LOAN THEN IT CHANGED THE STAND AND CLAIMED IT AS SHARE APPLICATION WHICH WAS NOT ACCEPTED BY THE HONBLE HIGH COURT. 6. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. I.P. INDIA (P) LTD. (SUPRA) HAS DECIDED THE ISSUE BY HOLDING AS UNDER: 8. ON A CAREFUL CONSIDERATION OF THE MATTER WE FIND THAT THE AO HAS RELIED ON THE JUDGMENT OF THE JHARKHAND HI GH COURT (SUPRA) AND REFERRED THE ISSUE OF LEVYING PENALTY TO THE ADDITIONAL CIT. HE DID NOT EXAMINE WHETHER THE SHARE APPLICATION MONIES CAN BE TREATED AS LOAN OR DEPOSIT WITHIN THE MEANING OF SEC. 269SS. THE ADDITIONAL CIT HAS MERELY ENDORSED THE V IEW OF THE AO IN PASSING THE PENALTY ORDER. THE CIT(A) HAS FOUND AS A FACT THAT THE SHARES WERE SUBSEQUENTLY ALLOTTED TO THE APPLICANT - COMPANIES AS SHOWN BY THE FORM FILED BEFORE THE REGISTER OF COMPANIES. NEITHER THE AO NOR THE ADDITIONAL CIT HAS TAKEN THE TROUBLE TO EXAMINE THIS ASPECT WHILE IMPOSING THE PENALTY. THEY HAVE MERELY RELIED ON THE JUDGMENT OF THE JHARKHAND HIGH COURT (SUPRA). THE RELIANCE ON THIS JUDGMENT APPEARS TO US TO BE MISPLACED. IN BAIDYA NATH PLASTIC INDUSTRIES (P) LTD. AND ORS. VS. K.L. ANAND (1998) 230 ITR 522 A LD. SINGLE JUDGE OF THIS COURT POINTED OUT THAT THE DISTINCTION BETWEEN A LOAN AND A DEPOSIT IS THAT IN THE CASE OF THE FORMER IT IS ORDINARILY THE DUTY OF THE DEBTOR TO SEEK OUT THE CREDITOR AND TO REPAY THE MONEY ACCO RDING TO THE AGREEMENT WHILE IN THE CASE OF A DEPOSIT IT IS GENERALLY THE DUTY OF THE DEPOSITOR TO GO TO THE BANKER OR TO THE DEPOSITEE AS THE CASE MAY BE AND MADE A DEMAND FOR IT. THIS JUDGMENT WAS APPROVINGLY CITED BY A DIVISION BENCH OF THIS COURT IN DIRECTOR OF INCOME TAX (EXEMPTION) VS. ACME EDUCATIONAL SOCIETY (2010) 326 ITR 146 (DEL). IN THIS DECISION IT WAS HELD THAT A LOAN GRANTS TEMPORARY USE OF MONEY OR TEMPORARY ACCOMMODATION AND THAT THE ESSENCE OF A DEPOSIT IS THAT THERE MUST BE A LIABI LITY TO RETURN IT TO THE PARTY BY WHOM OR ON WHOSE BEHALF IT HAS BEEN MADE ON FULFILLMENT OF CERTAIN CONDITIONS. IF THESE TESTS ARE APPLIED TO THE FACTS OF THE CASE BEFORE US IT MAY BE SEEN THAT THE RECEIPT OF SHARE APPLICATION MONIES ITA NO. 5395 /D/ 2013 KISTURSONS P. LTD. 3 FROM THE THREE P RIVATE LIMITED COMPANIES FOR ALLOTMENT OF SHARES IN THE ASSESSEE COMPANY CANNOT BE TREATED AS RECEIPT OF LOAN OR DEPOSIT. IN ANY CASE THE TRIBUNAL HAS RIGHTLY NOTICED THE CLEAVAGE OF JUDICIAL OPINION ON THE POINT AND HELD THAT IN THAT SITUATION THERE WAS REASONABLE CAUSE U/S 273B APPLYING THE JUDGMENT OF THE SUPREME COURT IN VEGETABLE PRODUCTS (SUPRA). SINCE THE FACTS OF THE ASSESSEES CASE ARE SIMILAR TO THE CASE DECIDED BY HONBLE HIGH COURT THEREFORE IN OUR CONSIDERED VIEW THIS ISSUE IS COVERED I N FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT. WE HOLD THAT THE CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED. WE FIND NO FAULT IN THE ORDER OF THE CIT(A). WE DISMISS THE REVENUES APPEAL. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.2014. - SD/ - - SD/ - ( T.S. KAPOOR ) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.11.2014 *KAVITA P.S. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI TRUE COPY BY ORDER ASSISTANT REGISTRAR