Om Trading Co.,, Jalgaon v. Jt. CIT, Range-2,, Jalgaon

ITA 937/PUN/2011 | 2006-2007
Pronouncement Date: 23-10-2013 | Result: Dismissed

Appeal Details

RSA Number 93724514 RSA 2011
Assessee PAN AABFO1070F
Bench Pune
Appeal Number ITA 937/PUN/2011
Duration Of Justice 2 year(s) 3 month(s) 19 day(s)
Appellant Om Trading Co.,, Jalgaon
Respondent Jt. CIT, Range-2,, Jalgaon
Appeal Type Income Tax Appeal
Pronouncement Date 23-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-10-2013
Assessment Year 2006-2007
Appeal Filed On 04-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO.937/PN/2011 A.Y. 2006-07 OM TRADING COMPANY 8 MARKET YARD PAROLA JALGAON 425111 PAN:AABFO1070F APPELLANT VS. JT. COMMISSIONER OF INCOME TAX JALGAON RESPONDENT APPELLANT BY : SHRI S.N. K ALBHANDE RESPONDENT BY : SHRI A.K . MODI DATE OF HEARING: 21.10.2013 DATE OF ORDER : 23.10.2013 ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II [(IN SHORT CIT(A)- II] NASHIK DATED 19-05-2011 FOR A.Y. 2006-07 ON TH E FOLLOWING GROUNDS. (1) FROM THE FACTS & CIRCUMSTANCES THE CIT(A) ERRED IN CONFIRMING THE PENALTY U/S.271D OF I.T. ACT. (2) THE CIT(A) GAVE UNNECESSARY IMPORTANT ON THE PAYMENTS WHICH WERE NOT MADE ON THE DAY OR NEXT DAY OF WHICH THE DEPOSIT IN CASH WAS RECEIVED. 2 (3) THE CIT(A) DID NOT DISCUSS THE PROVISION OF SEC273B WHICH CONTEMPLATES THAT THE PENALTY U/S. 271D IS NO T MANDATORY. (4) THE CIT(A) DID NOT DISCUSS THE CASE LAW CITED & THE COPIES OF WHICH WERE FILED WHICH GIVES IMPORTANCE TO THE BACKGROUNDS OF PROVISIONS OF 269SS OF I.T. ACT. THE DISCUSSION IN THE CASE LAW REGARDING THE INTRODUCTION & PURPOSE OF SEC. 269SS WAS NOT AT ALL DISCUSSED BY CIT(A). THE FUNDAMENTAL THING THAT THE PURPOSE OF SEC.269SS WAS TO STOP THE MENACE OF ACCOUNTED MONEY. WHEN THE GENUINENESS OF DEPOSIT WAS ESTABLISHED & ACCEPT ED BY THE INCOME TAX OFFICER IT WAS NOT NECESSARY TO TECHNICALLY LEVY THE PENALTY. 2. THE ASSESSEE IS ENGAGED IN BUSINESS OF BROKERAGE IN GRAINS AND THEY WERE LICENCEE OF THE APMC PAROLA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED T HAT RS.10 00 000/- WAS ACCEPTED BY ASSESSEE BY WAY OF L OAN FROM SHRI NAMDEO BANDU WANI IN CASH IN VIOLATION OF PRO VISIONS OF SECTION 269SS OF THE I.T. ACT 1961. A SHOW CAUSE NOTICE U/S.274 R.W.S. 271D WAS ISSUED ON 01-09-2009 REQUES TING THE ASSESSEE FIRM TO STATE AS TO WHY PENALTY U/S. 271D SHOULD NOT BE LEVIED FOR ACCEPTING LOAN AS ABOVE IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF I.T. ACT 1961. IN RESPONSE TO THE ABOVE NOTICE ASSESSEE SUBMITTED AS UNDER; THAT THE NATURE OF BUSINESS IS SUCH THAT IT NEEDS CASH. AS WE WERE IN NEED OF CASH WE ASKED SHRI NAMDEO BANDU WANU A RESPECTED PERSON TO HELP US. HE TOOK THE L OAN OF RS.10 00 000/- FROM THE PREMDEEP NAGARI SAH. PATSAN THA DHULE. AS WE REQUESTED HIM TO BRING CASH FORM DHUL E HE WITHDREW THE CASH FROM THE CREDIT SOCIETY AND DEPOS ITED WITH US. A CHEQUE WOULD HAVE TAKEN AT LEAST 4-5 DA YS TO CLEAR & WE WOULD HAVE BEEN IN DIFFICULTIES. WE HAD A CASH BALANCE OF RS.22 883/-. THE DEPOSITS ARE GENUINE & ACCEPTED BY THE I.T.O AND NO ADDITION HAS BEEN MADE TO TOTAL INCOME ON THIS ISSUE. 3 3. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENT IONS RAISED ON BEHALF OF ASSESSEE AND LEVIED PENALTY OF RS.10 0 0 000/- U/S.271D OF I.T. ACT WHICH WAS CONFIRMED BY CIT(A). THE SAME HAS BEEN OPPOSED BEFORE US. AUTHORIZED REPRESENTAT IVE SUBMITTED THAT BUSINESS OF ASSESSEE IS SUCH THAT IT NEEDS CASH. IN SUCH NEED THE ASSESSEE CLAIMED TO HAVE ASKED SH RI NAMDEO BANDU WANI AND HE EXTENDED CASH LOAN OF RS.10 00 00 0/- BY WITHDREW THE CASH FROM THE CREDIT SOCIETY AND DEPOS ITED WITH THE ASSESSEE. A CHEQUE WOULD HAVE TAKEN AT LEAST 4-5 D AYS TO CLEAR AND ASSESSEE WOULD HAVE BEEN IN DIFFICULTY BECAUSE ASSESSEE HAD CASH BALANCE OF RS.22 883/-. ACCORDINGLY THE ASSE SSEE ACCEPTED THE CASH OF RS.10 00 000/-. ACCORDING TO ASSESSEE DEPOSITS ARE GENUINE AND ACCEPTED BY ASSESSING OFFICER AND NO AD DITION HAS BEEN MADE TO TOTAL INCOME IN THIS ACCOUNT. ACCORDI NGLY FOR TAKING CASH LOAN PENALTY U/S. 271D SHOULD NOT BE IM POSED BECAUSE HE WAS PREVENTED BY REASONABLE CAUSE TO ACC EPT CASH LOAN AS CONTEMPLATED UNDER PROVISION OF SECTION 271 D OF THE I.T. ACT. ACCORDINGLY PENALTY SHOULD BE CANCELLED. ON OTHER HAND LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF AUTHORITIES BELOW AND SUPPORTED PENALTY LEVIED U/S. 271D FOR VIOLATING SECTION 269SS OF THE I.T. ACT. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL RECORD IT IS NOT IN DISPUTE THAT ASSESSEE HAS ACCE PTED RS.10 00 000/- FROM SHRI NAMDEO BANDU WANI IN CASH IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE I.T. ACT. ACCORDING TO ASSESSEE TRANSACTIONS UNDER REFERENCE ARE GENUINE. AS HE WAS HAVING ONLY RS.20 883/- CASH IN HAND AS O N 27-10- 2006. THE ASSESSEE HAS MADE PAYMENT TO AGRICULTURI STS AS UNDER; 4 1 69 076/- 28/10/2005 1 89 050/- 29/10/2005 1 76 128/- 20/10/2005 1 19 924/- 04/11/2005 2 00 745/- 04/11/2005 FROM THE ABOVE THE ASSESSEE HAS TRIED TO JUSTIFY T HE CIRCUMSTANCES UNDER WHICH SAID LOAN / DEPOSIT IN CA SH WERE ACCEPTED. ACCORDING TO ASSESSEE THERE WAS A REASON ABLE CAUSE FOR ACCEPTING CASH LOANS AND THERE WAS NO MALAFIDE INTENTION OR EVASION OF THE TAX BY ASSESSEE. WE FIND THAT PROVI SIONS OF SECTION 269SS HAS BEEN BROUGHT ON STATUTE BY LEGISLATION FO R PUTTING A BAN ON ACCEPTANCE / INTRODUCTION OF CASH OF RS.20 0 00/- AND ABOVE INTO THE BOOKS OF ACCOUNTS IN THE FORM OF LOA N OR DEPOSIT IN THE BUSINESS. THE ASSESSEE HAS NOT BROUGHT ON RECO RD ANY CONVINCING REASON TO ACCEPT THE CASH LOAN / DEPOSIT SO AS TO BRING REASONABLE CAUSE MENTIONED IN SECTION 273B. THE ASSESSEE HAS NOT MADE OUT THE CASE OF EXCEPTION STIPULATED I N SECTION 269SS. THE ASSESSEE IS A COMMISSION AGENT AND DEAL S IN AGRICULTURAL COMMODITIES. AS PER THE TRADE PRACTIC E CASH PAYMENTS ARE MADE TO FARMERS ON A REGULAR BASIS. T HERE IS NOTHING ON RECORD TO SUGGEST UNUSUAL OR ANY COMPELL ING CIRCUMSTANCES FOR ACCEPTING LOAN OF RS.10 00 000/- IN CASH. THE PAYMENTS TO FARMERS IN CASH IS A NORMAL BUSINESS TR ANSACTIONS BUT HE HAS NOT MADE OUT THE CASE FOR ACCEPTING CASH LOAN IN CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE I.T ACT. THE ASSESSEE HAS ALSO NOT ESTABLISHED IMMEDIATE NEED OF CASH. IN THESE FACTS AND CIRCUMSTANCES CIT(A) WAS JUSTIFIED IN UPHOLDING THE PENALTY LEVIED BY ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 271D OF I.T ACT AND THE SAME IS UPHELD. 5. IN THE RESULT THE APPEAL FILED BY ASSESSEE IS D ISMISSED. 5 PRONOUNCED IN THE OPEN COURT ON THE DAY OF 23 RD OCTOBER 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADA V) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 23 RD OCTOBER 2013 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A)-II NASHIK 4) THE CIT-II NASHIK 5) THE DR B BENCH I.T.A.T. PUNE. 6) GUARD FILE //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY I.T.A.T. PUNE