DCIT, New Delhi v. Shri Rajan Ramanee, HUF, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.672/DEL/2010 ASSESSMENT YEAR : 2006-07 DY . COMMISSIONER OF INCOME-TAX CIRCLE 33(1) NEW DELHI. VS. SHRI RAJAN RAMANEE HUF FLAT NO.1005 PRAGATI TOWERS RAJENDRA PLACE NEW DELHI. PAN : AAJHR5465F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI CA REVENUE BY : SMT. RENU AMITABH SR. DR ORDER PER R.C. SHARMA: ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT (A) DATED 26.11.2009 FOR ASSESSMENT YEAR 2006-0 7 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271-D OF THE IT ACT. 2. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER OBSERVED THAT THE ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 269-SS IN RESPECT OF AMOUNTS PAID OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OF RS.60 01 000/-. THE CONTENTION OF THE ASSESSEE WAS THAT A CREDIT OF RS.60 01 000/- FR OM M/S SUNGLOW WHICH IS A NBFC HAVING ADVANCED LOANS AGAINST SHARES FOR WHICH PURPOSE THE ASSESSEE HUF HAD AN AGREEMENT WITH THE SAID COMPANY IN RESPE CT OF FINANCING OF SHARES. AS A PRIMARY FINANCING CONDITION OF THE SAID M/S SU NGLOW THE PAYMENTS HAVE BEEN MADE DIRECTLY TO THE BONANZA PORTFOLIO A REGI STERED NSE BROKER. THE ITA NO.672/DEL/2010 2 ASSESSING OFFICER DID NOT ACCEPT ASSESSEES CONTENT ION AND OBSERVED THAT LOAN GIVEN BY THE SAID NBFC M/S SUNGLOW TO THE BROKER M/ S BONANZA PORTFOLIO WAS IN FACT THE LOAN GIVEN TO THE ASSESSEE WHICH WERE NOT GIVEN IN THE FORM OF ACCOUNT PAYEE CHEQUE OR BANK DRAFT AS REQUIRED U/S 269-SS. ACCORDINGLY PENALTY WAS LEVIED U/S 271-D OF THE IT ACT. BY THE IMPUGNED OR DER THE LD. CIT (A) DELETED THE PENALTY. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES AND FOUND FROM THE RECORD THAT THERE WAS NO CASH TRANSACTION BETWEEN THE ASSESSEE AND M/S SUNGLOW. HOWEVER AS PER THE TERMS OF FINANCING TO SAFEGUARD ITS INTEREST M/S SUNGLOW HAS MADE A DIRECT PAYMENT BY ACCOUNT PAYEE CHEQUE TO THE BROKER M/S BONANZA PORT FOLIO. THE PAYMENT WAS MADE TO M/S BONANZA BY ACCOUNT PAYEE CHEQUE AND NOT BY CASH THUS THERE WAS NO VIOLATION OF RULE OF SECTION 269-SS. THE IS SUE IS ALSO COVERED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F NOIDA TOLL BRIDGE COMPANY LTD. 262 ITR 260 WHEREIN IT WAS HELD THAT WHERE NO PAYMENT IN CASH WAS MADE EITHER BY THE ASSESSEE OR ON ITS BEHALF THE PROVIS IONS OF SECTION 269-SS ARE NOT ATTRACTED. RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT VIS-- VIS FINDINGS RECORDED BY CIT(A) AT PAGE3 8 & 9 OF H IS APPELLATE ORDER WHICH HAS NOT BEEN CONTROVERTED BY LEARNED DR WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF CIT (A) DELETING THE PENALTY IMPOSED U/S 271-D. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. . THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.04.20 10. SD/- SD/- [A.D. JAIN] [R.C. SHARMA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 23.04..2010. DK ITA NO.672/DEL/2010 3 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES