ITO, Jaipur v. M/S. LADDU LAL GHEESA LAL HUF, Jaipur

ITA 953/JPR/2011 | 2007-2008
Pronouncement Date: 02-02-2012 | Result: Dismissed

Appeal Details

RSA Number 95323114 RSA 2011
Assessee PAN EAROF2006A
Bench Jaipur
Appeal Number ITA 953/JPR/2011
Duration Of Justice 2 month(s) 24 day(s)
Appellant ITO, Jaipur
Respondent M/S. LADDU LAL GHEESA LAL HUF, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 02-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 02-02-2012
Assessment Year 2007-2008
Appeal Filed On 08-11-2011
Judgment Text
1 ITA 953-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 953/JP/2011 ASSTT. YEAR : 2007-08. THE INCOME-TAX OFFICER VS. M/S. LADDU LAL GHEESA LAL HUF WARD 7(2) GRAIN MANDI BAGRU JAIPUR. JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD JOHARI RESPONDENT BY : SHRI RAJEEV SOGANI DATE OF HEARING : 18.01.2012. DATE OF PRONOUNCEMENT : 02.02.2012. ORDER DATE OF ORDER : 02/02/2012. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. SEVEN GROUNDS ARE TAKEN BY THE DEPARTMENT. HOWE VER THEY RELATE TO DELETING THE PENALTY OF RS. 64 LACS IMPOSED UNDER SECTION 271D. 3. THE SEVEN GROUNDS RAISED BY THE DEPARTMENT INCLU DED SOME OF THE GROUNDS WHICH ARE ABOUT PERVERSITY OF THE ORDER OF LD. CIT (A) ME ANING THEREBY SAYING THAT THE ORDER OF LD. CIT (A) IS A PERVERSE ORDER. 4. THE BRIEF FACTS IN THIS RESPECT ARE DISCUSSED IN THE ORDER OF LD. CIT (A) AT PAGES 2 & 3 ARE AS UNDER :- 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER ITO WARD-7(2) JAIPUR OBSERVED THAT THE A SSESSEE HAD RECEIVED AN AMOUNT OF RS. 64 LAC FROM ONE SH. BEHARI LAL ON 10. 06.2006. IT WAS CLAIMED BY THE ASSESSEE THAT HE HAD UTILIZED THIS A MOUNT OF RS. 64 LAC TAKEN FROM SHRI BEHARI LAL IN MAKING PAYMENT TO ON E SH. AJIT BHATNAGAR IN CASH FOR PURCHASE OF A FACTORY FROM M/S HARIHAR STAMPING (P) LTD. SH. BEHARI LAL HAD BEEN EXAMINED BY THE ASSESSING OFFIC ER WHO CONFIRMED HAVING GIVEN THE RS. 64 LAC TO THE ASSESSEE IN CASH ON 10.06.2006 OUT OF HIS HALF SHARE OF RS. 80 LAC RECEIVED ON SALE OF A PLOT OF LAND TO M/S VATIKA GROUP A FEW DAYS PRIOR TO THE TRANSACTION. THE ASSESSEE AS WELL AS SH. BEHARI LAL CLAIMED THA T THE RS. 64 LAC GIVEN BY SH. BEHARI LAL TO THE ASSESSEE HAD BEEN GI VEN AS AN ADVANCE TOWARDS SALE OF AN AGRICULTURAL LAND BY THE HUF TO SH. BEHARI LAL . IT HAS ALSO BEEN CLAIMED THAT AS THE TRANSACTION DID NOT M ATERIALIZE THE AMOUNT HAS BEEN RETURNED BY THE ASSESSEE TO SH. BEHARI LAL DURING 2008-09. HOWEVER THE ASSESSING OFFICER AFTER DETAILED EXAM INATION OF THE FACTS HAS ARRIVED AT THE CONCLUSION THAT IT WAS A LOAN TAKEN BY THE ASSESSEE FROM SH. BEHARI LAL. BUT IN ORDER TO AVOID THE RIGORS OF SEC TION 269SS THE SAME HAS BEEN CLAIMED AS AN ADVANCE FOR PROPERTY TRANSACTION . ACCORDINGLY HE CONSIDERED THAT THERE WAS VIOLATION OF THE PROVISIO N OF SECTION 269SS AND ACCORDINGLY THE MATTER HAS BEEN REFERRED BY HIM TO THE UNDERSIGNED VIDE LETTER NO.7 DATED 06.04.2010 FOR IMPOSITION OF PEN ALTY U/S 271D OF THE I.T. ACT. THE ASSESSMENT RECORD OF THE ASSESSEE FOR THE RELEVANT YEAR WAS EXAMINED. THE FACT OF THE CASE IS THAT A SURVEY U/S 133 OF IT ACT WAS CONDUCTED ON SH. OM PRAKASH SHARMA S/O SH. GHASILAL BAGRU ON 25.09.2006 AFTER INFORMATION WAS RECEIVED THAT SH. OM PRAKASH SHARMA HAS ENTERED INTO A PROPERTY DEAL WHEREIN THE CASH C OMPONENT WAS VERY HIGH. THE SALE CONSIDERATION WAS FOR RS. 82 LAC OUT OF WHICH RS. 11 LAC HAD GIVEN IN CHEQUE FROM THE HUF ACCOUNT (OF M/S LADUL AL GHASILAL). THE CASH COMPONENT PAID TILL THE DATE OF SURVEY WAS RS. 64LAC. SH. OM 3 PRAKASH SHARMA SURRENDERED THE AMOUNT AS INCOME FRO M UNDISCLOSED SOURCES APPARENTLY TO SAVE HIMSELF FROM THE RIGORS OF SECTION 269SS. IN RESPONSE TO THE SHOW CAUSE NOTICE THE AR OF THE AS SESSEE ATTENDED ON 20.05.2010 AND FILED A COPY OF LETTER ALREADY FILED BY HIM BEFORE THE ITO WARD-7(2) JAIPUR. THE ONLY ISSUE RAISED IN THIS LE TTER IS THAT THE AMOUNT WAS AN ADVANCE AND NOT A LOAN. THE REPLY FILED BY T HE AR OF THE ASSESSEE ON 20.05.2010 AS WELL AS REPLIED FILED BEFORE THE A SSESSING OFFICER EARLIER WERE DULY CONSIDERED AND THE FACTS OF THE CASE WERE PROPERLY EVALUATED IN LIGHT OF THE CLAIM OF THE ASSESSEE. THE OBSERVATION S ARE SUMMARIZED AS UNDER: (I) THE SURVEY HAD BEEN CONDUCTED ON SH. OM PRAKASH SHA RMA AND HE HAD SURRENDERED THIS AMOUNT AS UNDISCLOSED INCOME. AS P ER THE PURCHASE DEED THE FACTORY HAD BEEN PURCHASED BY SH. OM PRAKASH SH ARMA FOR RS. 82 LAC IN THE NAME OF THIS PROPRIETARY CONCERN. BUT THE AS SESSEE HUF HAS SHOWN THE FACTORY IN ITS BALANCE SHEET AND HAS RETURNED T HE MONEY TO SH. BEHARI LAL IN 2008-09. SH. OM PRAKASH IS A COPARCENER IN T HE HUF. SH.BEHARI LAL HAS ALSO CLAIMED THAT HE HAD GIVEN THE MONEY TO THE HUF THOUGH HE HAS CLAIMED THAT THE SAME HAD BEEN GIVEN FOR PURCHASE O F THE LAND FROM THE HUF. HENCE THE AMOUNT NEEDS TO BE CONSIDERED IN THE HANDS OF THE HUF. (II) THE AMOUNT HAS BEEN RETURNED BY THE ASSESSEE AFTER A HUGE GAP OF TIME. NO PRUDENT PERSON WILL KEEP HIS MONEY LOCKED UP FOR SU CH A LONG TIME. (III) THE STATEMENT OF SH. BEHARI LAL HAD BEEN RECORDED O N 07.12.2006 AFTER A LONG GAP FROM THE DATE OF MONEY HAD BEEN GIVEN BY H IM TO THE ASSESSEE. IT IS SURPRISING THAT EVEN TILL THAT THE DAY THE TRANS ACTION HAD NOT BEEN FINALIZED. THIS IS DESPITE HIS GIVING A CASH OF RS. 64 LAC TO THE ASSESSEE IN JUNE 2006. THIS SHOWS THAT THE CLAIM REGARDING ADVA NCE FOR SALE OF AGRICULTURE LAND IS ONLY AN AFTER THOUGHT. (IV) THE ENTIRE AMOUNT HAS NOT BEEN RETURNED IN LUMP SUM BUT HAS BEEN RETURNED IN PIECEMEAL IN SMALL INSTALLMENTS THAT T OO AFTER A HUGE GAP OF TIME. THIS PROVES THAT THIS COULD NOT HAVE BEEN AN ADVANCE. 4 (V) EVEN IF IT IS PRESUMED THAT THE AMOUNT HAD BEEN GIV EN AS AN ADVANCE BUT THE TRANSACTION DID NOT MATERIALIZE. IN SUCH A CASE THE MOMENT THE TRANSACTION GOT CANCELLED THE NATURE OF THE SAME I S CONVERTED TO A DEPOSIT IT THE SAME IS NOT RETURNED IMMEDIATELY. RETURN OF THE MONEY IN PIECE- MEAL SUBSEQUENTLY WILL MEAN RETURN OF THE DEPOSIT. (VI) THE ASSESSEE HAS NOT KEPT THE MONEY IN SAFE CUSTODY SUCH AS IN BANK OR FDR ETC. IT HAS UTILIZED THE MONEY IN BUYING THE FA CTORY. THE BALANCE SHEET OF THE ASSESSEE SHOWS CLEARLY THAT IT DID NOT HAVE THE FUNDS TO IMMEDIATE RETURN THE SAME. NO PRUDENT PERSON WILL U TILIZE AN ADVANCE RECEIVED BEFORE FINALIZING THE DEAL. IT ONLY SHOWS THAT THE ASSESSEE HAD CONSIDERED THE AMOUNT AS A LOAN FROM THE BEGINNING AND NOT AS ON ADVANCE. FROM THE ABOVE DISCUSSION IT IS CLEAR THAT THE AMO UNT IN QUESTION WAS A LOAN TAKEN BY THE ASSESSEE FROM SH. BEHARI LAL AND NOT AN ADVANCE AS HAS BEEN CLAIMED. THE CASE LAWS STATED BY THE AR OF THE ASSE SSEE DO NOT HELP THE ASSESSEE AS THE FACTS OF THE CASE ARE QUITE CLEAR. ACCORDING LY THE ACCEPTANCE OF THE CASH LOAN OF RS. 64 LAC BY THE ASSESSEE FROM SH. BEHARI LAL ON 10.06.2006 IS IN CONTRAVENTION OF SECTION 269 SS OF THE I.T. ACT AND ACCORDINGLY IT IS A FIT CASE FOR IMPOSITION OF PENALTY U/S 271D OF THE IT ACT 1961. 5. DETAILED WRITTEN SUBMISSIONS WERE FILED BEFORE L D. CIT (A) WHICH ARE REPRODUCED IN HIS ORDER AT PAGES 3 TO 7 AS UNDER :- BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D RECEIVED AN ADVANCE OF RS. 64.00 LACS FROM SHRI BIHARI LAL S/O SHRI HARI NARAIN RESIDENT OF VIALLAGE CHOKHAWALA DISTRICT JAIPUR AG AINST TOTAL SALE CONSIDERATION OF RS. 150.00 LACS OF ITS AGRICULTURA L LAND SITUATED AT BAGRU ADMEASURING 7 BIGHA 6 BISWA ON 10.06.2006 RELEVANT TO ASSESSMENT YEAR 2007-08. THE AMOUNT OF RS. 64.00 LACS WAS RECEIVED BY THE ASSESSEE AS 5 PART OF SALE CONSIDERATION IN ADVANCE AND THE BALAN CE AMOUNT OF RS. 86.00 LACS WAS TO BE RECEIVED AS PER THE TERMS AND CONDIT IONS OF SALE AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE AND PURCHASER OF THE AGRICULTURE LAND SHRI BIHARI LAL. COPY OF AGREEMENT IS ENCLOSED FOR YOUR READY REFERENCE( PAGE 1-4). SHRI BIHARI LAL CONFIRMED THE FACT OF HA VING GIVEN ADVANCE OF RS. 64.00 LACS TO THE ASSESSEE FOR PURCHASE OF LAND IN THE SWORN IN AFFIDAVIT FILED (PAGE 5-6) DURING ASSESSMENT PROCEEDINGS AND ALSO MENTIONED IN THE ASSESSMENT ORDER AND ACCEPTED BY THE LD. AO AS GENU INE IN THE ASSESSMENT PROCEEDINGS. (PAGE 7-10) STATEMENTS OF SHRI BIHARI LAL WERE ALSO RECORDED U/S 131 (PAGE 11-14) OF INCOME TAX ACT 1961 ON 07. 12.2006 WHEREIN SHRI BIHARI LAL HAS CATEGORICALLY STATED THAT HE ADVANCE D A SUM OF RS. 64.00 LACS TO THE ASSESSEE FOR PURCHASE OF AGRICULTURE LA ND. SHRI BIHARI LAL HAS FURTHER EXPLAINED AND PROVED THE SOURCE OF RS. 64.0 0 LACS AND THE SAME HAS BEEN ADMITTED AS GENUINE IN ASSESSMENT PROCEEDINGS. THE PURCHASER SHRI BIHARI LAL FAILED TO PAY THE BAL ANCE AMOUNT OF SALE CONSIDERATION RS. 86.00 LACS TO THE ASSESSEE A S PER TERMS AND CONDITIONS OF SALE AGREEMENT. THE ASSESSEE INSISTED FOR PAYMENT OF THE BALANCE AMOUNT BUT SHRI BIHARI LAL EXPLAINED TO THE ASSESSEE THAT DUE TO DISPUTE IN FAMILY HE IS NOT IN A POSITION TO PAY TH E BALANCE AMOUNT OF RS. 86.00 LACS TO THE ASSESSEE AND HE CANNOT FULFILL TH E TERMS AND CONDITIONS OF SALE AGREEMENT ENTERED INTO BY BOTH THE PARTIES FOR SALE OF AGRICULTURE LAND. A LOT OF EFFORTS WERE MADE BY THE ASSESSEE TO SORT OUT THE MATTER BUT SHRI BIHARI LAL EXPRESSED HIS INABILITY TO PAY THE BALAN CE AMOUNT AND ALSO REQUESTED FOR REFUND OF THE ADVANCE AMOUNT OF RS. 6 4.00 LACS. A NUMBER OF MEETINGS WERE HELD BETWEEN BOTH THE PARTIES AND COM MON RELATIVES AND RESPECTED AND RENOWNED MEMBERS OF COMMUNITY AND VIL LAGE WERE ALSO INVOLVED TO SORT OUT THE ISSUE. ULTIMATELY UNDER TH E ADVICE AND PRESSURE OF COMMON RELATIVES AND RESPECTED AND RENOWNED MEMBERS OF COMMUNITY AND VILLAGE IT WAS DECIDED TO RETURN THE ADVANCE OF RS. 64.00 LACS TO SHRI BIHARI LAL AND CANCEL THE AGREEMENT. IT WAS FURTHER AGREED BETWEEN ASSESSEE AND SHRI BIHARI LAL THAT NO INTEREST WOULD BE PAID ON ADVANCE AND 6 ADVANCE AMOUNT SHALL BE RETURNED AS PER CONVENIENCE OF THE ASSESSEE. THUS THE AMOUNT OF RS. 64.00 LACS WAS RETURNED IN INSTAL LMENTS IN THE FINANCIAL YEAR 2008-09... THE LD. ADDL. CIT HAS LEVIED PENALTY U/S 271D BASED UPON SIX OBSERVATIONS MADE IN THE PENALTY ORDER. THE POINT W ISE REPLY OF THE OBSERVATIONS IS AS UNDER: OBSERVATION NO.1 THE SURVEY HAD BEEN CONDUCTED ON SH. OM PRAKASH SHA RMA AND HE HAD SURRENDERED THIS AMOUNT AS UNDISCLOSED AMOUNT. AS PER THE PURCHASE DEED THE FACTORY HAD BEEN PURCHASED BY SH OM PRAKA SH SHARMA FOR RS. 82.00 LACS IN THE NAME OF HIS PROPRIETARY CONCERN. BUT THE ASSESSEE HUF HAS SHOWN THE FACTORY IN HIS BALANCE SHEET AND HAS RETURNED THE MONEY TO SHRI BEHARI LAL IN 2008-09. SHRI OM PRAKASH IS COPA RCENER IN THE HUF SH. BEHARI LAL HAS ALSO CLAIMED THAT HE HAD GIVEN T HE MONEY TO HUF THOUGH HE HAS CLAIMED THAT THE SAME HAD BEEN GIVEN FOR PURCHASE OF THE LAND FROM HUF. HENCE THE AMOUNT NEEDS TO BE CONSID ERED IN THE HANDS OF THE HUF. REPLY THE SURVEY U/S 133 A WAS CONDUCTED ON 25.9.2006 AT THE BUSINESS PREMISES OF THE ASSESSEE. DURING ASSESSMENT PROCEED INGS IT WAS ESTABLISHED BY THE APPELLANT THAT FACTORY WAS PURCH ASED BY SHRI OM PRAKASH AS COPARCENER OF THE HUF AND FUNDS FOR PURC HASE OF FACTORY WERE GIVEN BY THE HUF AND HUF HAS SHOWN THE FACTORY PURC HASED IN ITS BALANCE SHEET. SHRI BEHARI LAL HAS ALSO CONFIRMED THAT THE FUNDS WERE GIVEN TO HUF AS ADVANCE TOWARDS PURCHASE CONSIDERATION OF AG RICULTURE LAND. THE ASSESSMENT HAS ALSO BEEN COMPLETED IN THE HANDS OF HUF AND PENALTY PROCEEDINGS HAVE ALSO BEEN INITIATED IN THE CASE OF HUF HENCE THERE IS NO CONTRADICTION OF FACTS. THE ASSESSMENTS OF THE ASSESSEE HUF AND SHRI OM PRA KASH SHARMA PROP. OF M/S KAUSHAL KUMAR & CO. AND SHRI GHISA LAL PROP. OF M/S LADULAL GHISALAL WERE COMPLETED U/S 143 (3) OF INCOME TAX A CT 1961 BY THE SAME 7 ASSESSING OFFICER ON THE SAME TIME AND THE LD. AO H AS ACCEPTED THE PURCHASE OF FACTORY IN THE HANDS OF ASSESSEE HUF. THE FACT OF PURCHASE OF FACTORY BY HUF HAS BEEN FUL LY ADMITTED BY THE LD. AO IN THE ASSESSMENT PROCEEDINGS. OBSERVATION NO.2 THE AMOUNT HAS BEEN RETURNED BY THE ASSESSEE AFTER HUGE GAP OF TIME. NO PRUDENT PERSON WILL KEEP THIS MONEY LOCKED UP FOR SUCH A LONG TIME. REPLY THE SUM OF RS. 64.00 LACS WAS RECEIVED FROM SH. BEH ARI LAL TOWARDS PART CONSIDERATION OF SALE OF AGRICULTURE L AND OF ASSESSEE HUF. DUE TO DISPUTE IN THE FAMILY OF BUYER SH.BEHARI LA L THE DEAL COULD NOT MATERIALIZE. THERE WAS PROLONGED DISPUTE BETWEEN PU RCHASER AND SELLER AND THE DISPUTE WAS SETTLED WITH THE MEDIATION OF RELATIVES COMMON FRIENDS AND RENOWNED PEOPLE OF SOCIETY AND VILLAGE. IT WAS FINALLY DECIDED BY MUTUAL CONSENT THAT THE ADVANCE OF RS. 64.00 LAC S SHALL BE REFUNDED TO SHRI BEHARI LAL WITHOUT ANY INTEREST AND AS PER CON VENIENCE OF ASSESSEE HUF. THE FACT OF RECEIPT OF ADVANCE FOR SALE OF AGR ICULTURE LAND AND ITS RETURN HAS NOWHERE BEEN DOUBTED BY THE DEPARTMENT. THE DELAY IN REFUND WAS DUE TO DISPUTE AND FURTHER MORE THE ADVANCE WAS NOT MEANT FOR REFUND AT THE TIME OF RECEIPT OF ADVANCE BUT DUE TO LATER DEVELOPMENTS THE ADVANCE HAD TO BE REFUNDED. THE DELAY IN REFUND OF ADVANCE IS FULLY JUSTIFIED. OBSERVATION NO. 3 THE STATEMENT OF SHRI BEHARI LAL HAD BEEN RECORDED ON 07.12.2006 AFTER A LONG GAP FROM THE DATE OF MONEY HAD BEEN GI VEN BY HIM TO THE ASSESSEE. IT IS SURPRISING THAT EVEN TILL THAT THE DAY TRANSACTION HAD NOT BEEN FINALIZED. THIS IS DESPITE HIS GIVING A CASH OF RS. 64.00 LACS TO THE ASSESSEE IN JUNE 2006. THIS SHOWS THAT THE CLAIM REGARDING ADVANCE FOR SALE OF AGRICULTURE LAND IS ONLY AN AFTERTHOUGHT. 8 REPLY AS ALREADY SUBMITTED THAT DUE TO DISPUTE IN THE FAM ILY OF BUYER OF AGRICULTURE OF LAND SHRI BEHARI LAL HE COULD NOT P AY THE BALANCE AMOUNT OF RS. 86.00 LACS TO THE ASSESSEE HUF AND FINALLY T HE DEAL HAD TO BE CANCELLED AND THE ADVANCE AMOUNT OF RS. 64.00 LACS HAD TO BE RETURNED BACK TO SHRI BEHARI LAL. AS FAR AS RECORDING OF STA TEMENTS OF SHRI BEHARI LAL IS CONCERNED IT IS PREROGATIVE OF THE DEPARTMEN T TO DECIDE THE TIME OF RECORDING OF STATEMENTS OF PARTIES CONCERNED. THE FACT OF RECEIPT OF ADVANCE OF RS. 64.00 AGAINST SALE OF AGRICULTURE LA ND IS PROVED BEYOND ANY DOUBT FROM THE AGREEMENT FOR SALE OF LAND EXECUTED ON 10.6.2006 BETWEEN SHRI BEHARI LAL AND THE ASSESSEE HUF. THE AGREEMENT FOR SALE OF AGRICULTURE LAND HAD BEEN EXECUTED ON 10.6.2006 MUC H BEFORE THE DATE OF SURVEY I.E. 25.9.2006. IN VIEW OF THE ABOVE STATED FACTS THE RECEIPT OF ADVANCE CANNOT BE AN AFTER THOUGHT BUT AN EXISTING FACTS AS ON THE DATE OF SURVEY. OBSERVATION NO.4 THE ENTIRE AMOUNT HAS NOT BEEN REFUNDED IN LUMP SUM BUT HAS BEEN RETURNED IN PIECEMEAL IN SMALL INSTALLMENTS T HAT TOO AFTER A HUGE GAP OF TIME. THIS PROVES THAT THIS COULD NOT HAVE BEEN AN ADVANCE. REPLY AS SUBMITTED IN EARLIER PARAS THAT SH. BEHARI LAL C OULD NOT FULFILL HIS COMMITMENT AND EXPRESSED HIS INABILITY TO PAY T HE BALANCE AMOUNT OF RS. 86.00 LACS. THERE WAS DISPUTE BETWEEN THE PARTI ES AND IT WAS RESOLVED BY THE COMMON RELATIVES AND KNOWN PERSONS. IN THE END IT WAS MUTUALLY AGREED THAT THE ADVANCE AMOUNT OF RS. 64.00 LACS SH ALL BE RETURNED BACK TO SHRI BEHARI LAL AS PER CONVENIENCE OF THE ASSESSEE HUF. THUS IN COMPLIANCE OF THE MUTUAL UNDERSTANDING THE ADVANCE AMOUNT OF RS. 64.00 LACS WAS RETURNED TO SHRI BEHARI LAL. REFUND OF ANY ADVANCE CANNOT CHANGE THE NATURE OF ADVANCE. THE ASSESSEE DID NOT HAVE RS. 64.00 LACS WITH HIM AT THE TIME THEREFORE HE RETURNED IN IT IN STALLMENTS. THE TIME GAP WAS DUE TO PROTRACTED DISPUTE AND ITS RESOLUTION PR OCESS ONCE THE MATTER 9 GOT RESOLVED THE ASSESSEE STARTED REFUNDING THE ADV ANCE AMOUNT TO SHRI BEHARI LAL. THUS THE CONCLUSION OF LD. AO THAT IT C ANNOT BE AN ADVANCE IS PERVERSE AND BASELESS. OBSERVATION NO.5 EVEN IF IT IS PRESUMED THAT THE AMOUNT HAD BEEN GIV EN AS AN ADVANCE BUT THE TRANSACTION DID NOT MATERIALIZE. I N SUCH A CASE A CASE THE MOMENT THE TRANSACTION GOT CANCELLED THE NATURE OF SAME IS CONVERTED TO A DEPOSIT IF THE SAME IS NOT RETURNED IMMEDIATELY. R ETURN OF THE MONEY IN PIECEMEAL SUBSEQUENTLY WILL MEAN RETURN OF THE DEPO SIT. REPLY THE THEORY OF CONVERSION OF ADVANCE TO DEPOSIT DUE TO NON MATERIALIZATION OF TRANSACTION FINDS NO LEGAL SUPPO RT OR BACKING. THE PURPOSE AND INTENTION OF ACCEPTING ADVANCE OF RS. 6 4.00 LACS AT THE TIME OF EXECUTION OF AGREEMENT OF SALE OF AGRICULTURE LAND WAS TO SELL THE AGRICULTURE LAND FOR RS. 150.00 LACS TO SHRI BEHARI LAL. IT IS THE SUBSEQUENT EVENTS WHICH COMPELLED THE ASSESSEE TO RETURN BACK THE ADVANCE TAKEN FROM SH.BEHARI LAL. AS REGARD REFUND OF ADVANCE AMO UNT DUE TO NON MATERIALIZATION OF TRANSACTION IMMEDIATELY OR IN IN STALLMENTS DOES NOT CHANGE THE NATURE OF ADVANCE TAKEN. IF FOR ACADEMIC REASONS ITS NATURE CHANGES IT BECOMES CURRENT LIABILITY BUT IT CAN NEV ER CONVERT TO DEPOSIT. HERE THE LD. A.O. IS NOT SURE WHETHER IT IS ADVANC E OR DEPOSIT AND HAS TRIED TO PROVE HIS POINT ON HYPOTHETICAL BASIS. WE AGAIN REITERATE THAT RS. 64.00 LACS WERE TAKEN AS ADVANCE AS PART CONSIDERAT ION OUT OF TOTAL SALE CONSIDERATION OF RS. 150.00 LACS AND NON MATERIALIZ ATION OF TRANSACTION HAS NOT CHANGED NATURE OF TRANSACTION AND WHETHER THE A DVANCE IS REFUNDED IMMEDIATELY OR IN INSTALLMENTS. HENCE THE CONCLUSIO N OF LD. AO IS BASELESS HYPOTHETICAL AND NOT SUSTAINABLE. OBSERVATION NO.6 THE ASSESSEE HAS NOT KEPT THE MONEY IN SAFE CUSTODY SUCH AS IN BANK OR FDR ETC. IT HAS UTILIZED THE MONEY IN BUYIN G THE FACTORY. THE BALANCE SHEET OF THE ASSESSEE SHOWS CLEARLY THAT IT DID NOT HAVE FUNDS TO 10 IMMEDIATE RETURN THE SAME. NO PRUDENT PERSON WILL U TILIZE AN ADVANCE RECEIVED BEFORE FINALIZING THE DEAL. IT ONLY SHOWS THAT THE ASSESSEE HAD CONSIDERED THE AMOUNT AS A LOAN FROM THE BEGINNING AND NOT AS AN ADVANCE. REPLY. IT IS TRUE THAT THE ASSESSEE HAD UTILIZED THE ADVAN CE MONEY IN PURCHASING FACTORY AND HAS NOT KEPT THE MONEY IN SA FE CUSTODY LIKE DEPOSIT IN BANK. THE ASSESSEE HAD DECIDED TO SELL ITS AGRIC ULTURE LAND BECAUSE HE NEEDED FUNDS AND ENTERED INTO AN AGREEMENT WITH SHR I BEHARI LAL FOR SALE OF AGRICULTURE LAND FOR A TOTAL CONSIDERATION OF RS . 150.00 LACS AND RECEIVED RS. 64.00 LACS AS ADVANCE. HE UTILIZED THESE FUNDS TO PURCHASE THE FACTORY. THE ASSESSEE HAD NEVER APPREHENDED THAT THIS DEAL W ILL NOT MATERIALIZE AND ADVANCE WOULD HAVE TO BE REFUNDED SUBSEQUENTLY OTH ERWISE ALSO ONE CANNOT BE ASKED TO OR EXPECTED TO DISPOSE/UTILIZE T HE FUNDS IN A PARTICULAR MANNER. WHEN THE ASSESSEE DECIDED TO SELL ITS AGRIC ULTURE LAND TO FULFILL ITS NEED OF FUNDS IT IS VERY NATURAL THAT HE WILL UTIL IZE THE FUNDS AS PER HIS NEED. THERE IS NO STANDARD PRINCIPLE/RULE PRESCRIBE D FOR UTILIZATION OF ADVANCE AMOUNT BY A PRUDENT PERSON. HERE WE FAIL TO UNDERSTAND THE CONCLUSION THAT THE ASSESSEE CONSIDERED THE AMOUNT AS LOAN FROM THE BEGINNING AND NOT AS ADVANCE FOR THE SIMPLE REASON THAT HE DID NOT DEPOSIT THE ADVANCE IN BANK BUT UTILIZED IT FOR BUYING THE FACTORY. IT SEEMS THAT THE LD. AO HAS TRIED TO PUT HIS PERSONAL OPINION IN THE GRAB OF A PRINCIPLE AND TAKEN AN ADVERSE VIEW. A BUSINESSMAN CANNOT BE ASKE D/EXPECTED TO CONDUCT HIS BUSINESS IN A PARTICULAR MANNER/FASHION IT IS HIS OWN DECISION TO CARRY OUT THE BUSINESS. HENCE THE INFERENCE DRAW N BY LD AO IS NOT SUSTAINABLE LEGALLY. IT WOULD ALSO BE PERTINENT TO SUBMIT HERE THAT WHEN THE RECEIPT OF ADVANCE HAS BEEN FULLY ACCEPTED IN ASSESSMENT PROCE EDINGS HOW IT CAN BE VIOLATION OF SECTION 269SS. 11 ON THE OTHER HAND IF THE ASSESSEE WOULD HAVE REFUND ED THE ADVANCE TO BIHARI LAL AFTER COMPLETION OF THE ASSESSMENT IN QUESTION THERE WOULD HAVE BEEN NO WAY TO INITIATE PENALTY PROCEEDINGS FO R VIOLATION OF SECTION 269 SS AS PER THE LEGAL PRECEDENTS THERE IS DIFFERENCE BET WEEN LOAN AND ADVANCE. IN THE CASE OF LOAN THERE IS ALWAYS AN OBL IGATION TO RETURN THE AMOUNT TAKEN AS LOAN AND IT IS THE BORROWER AT WHOS E INSTANCE REQUEST AND NEED THE MONEY IS GIVEN BY THE LENDER FOR A FIXED P ERIOD OF TIME AND INTEREST AT MUTUALLY AGREED RATE OF INTEREST IS ALS O PAID WHEREAS ADVANCE IS MADE FOR PERFORMANCE OF A SPECIFIC OBLIGATION AND I T IS MADE AT THE INSTANCE OF PERSON MAKING ADVANCE. THE PERSON RECEI VING THE ADVANCE IS NOT UNDER OBLIGATION TO REPAY THE SAME BUT MAKE THE SPECIFIC PERFORMANCE. SIMILARLY THERE IS GENERALLY NO OBLIGATION TO PAY I NTEREST ON THE ADVANCE RECEIVED. SIR FROM THE PLAIN READING OF DEFINITION OF LOAN O R DEPOSIT AS GIVEN IN SECTION 269T IT BECOMES ABUNDANTLY CLEAR THAT T HE ASSESSEE HAD TAKEN ADVANCE FROM SHRI BEHARI LAL AGAINST SALE OF AGRICU LTURE LAND WHICH WAS NOT RETURNABLE OR REPAYABLE. TO COME UNDER THE DEFI NITION OF LOAN OR DEPOSIT THE AMOUNT SHOULD BE REPAYABLE AFTER A NOTI CE OR PERIOD WHEREAS IN THE CASE OF THE APPELLANT THE MONEY WAS NOT REPAYA BLE AT ALL AT THE TIME OF RECEIPT OF ADVANCE BUT DUE TO SUBSEQUENT DEVELOPMEN TS IT HAD TO BE RETURNED BACK. FURTHER IF WE GO THROUGH THE OBJECT OF INTRODUCING SECTION 269SS IT WAS TO ERADICATE THE EVIL PRACTICE OF MAKING FALSE ENTRIES IN THE ACCOUNT BOOKS AND LATER GIVING EXPLANATIONS FOR THE SAME. I N THE MATTER IN HAND THERE IS NO QUESTION OF FALSE ENTRIES OR EXPLANATIO N OF THE SAME. THE PERSON GIVING ADVANCE SHRI BEHARI LAL HAS BEEN EXAMINED B Y THE DEPARTMENT U/S 131 OF THE INCOME TAX ACT 1961 AND HE HAS EXPLAINE D THE SOURCE OF RS. 64.00 LACS GIVEN AS ADVANCE TO THE ASSESSEE TO THE FULL SATISFACTION OF THE LD. AO. THIS FACT HAS BEEN FULLY EXAMINED DURING AS SESSMENT PROCEEDINGS 12 AND HAS BEEN ACCEPTED BY THE LD. AO WHILE COMPLETIN G ASSESSMENT U/S 143(3) OF INCOME TAX ACT 1961. IT WOULD BE PERTINENT TO SUBMIT HERE THAT THE TRANS ACTION IS GENUINE AND THE GENUINENESS AND CREDITWORTHINESS OF SHRI BI HARI LAL HAS ALSO BEEN PROVED AND ACCEPTED DURING ASSESSMENT PROCEEDINGS. NO DOUBT HAS BEEN CAST ON THE GENUINENESS OF TRANSACTION DURING ASSES SMENT PROCEEDINGS. FURTHER WE HAVE EXPLAINED THE CIRCUMSTANCES OF ACCE PTING THE ADVANCE AND RETURNING THE SAME IN THE REPLY FILED DURING PENALT Y PROCEEDINGS COPY OF REPLY IS ENCLOSED FOR YOUR READY REFERENCE (PAGE 15 -18). IN VIEW OF THE ABOVE SUBMISSION THAT THE ADVANCE WA S TAKEN BY ASSESSEE FROM SHRI BIHARI LAL AS PART PAYMENT OF SA LE CONSIDERATION OF AGRICULTURE LAND AND THEREFORE IT IS NOT COVERED UN DER THE PROVISIONS OF SEC. 269SS AND FURTHER THE FACT THAT GENUINENESS OF TRAN SACTION AND SHRI BIHARI LAL HAS BEEN PROVED BEYOND DOUBT HENCE THERE BEING NO VIOLATION OF SECTION 269 SS AND PENALTY HAS BEEN LEVIED WITHOUT ANY BASIS SIMPLY ON POSSIBILITIES AND SURMISES THE IMPOSITION OF PENAL TY PROCEEDINGS U/S 271 D IS ILL CONCEIVED AND THEREFORE IT IS REQUESTED TO D ELETE THE PENALTY LEVIED U/S 271 D. THE ASSESSEE HAS RELIED UPON THE FOLLOWING CASES: CIT VS BALAJI TRADERS (2008))) 167 TAXMAN 27 (MAD .) CIT VS KUNDRATHUR FINANCE & CHIT CO. (2006) 283 I TR 329 (MAD) CIT VS. RATNA AGENCIES (2006) 284 ITR 609 (MAD) ASSTT. DIRECTOR OF INSPECTION (INVESTIGATION) VS. K UM. A.B. SHANTHI (2002) 255 ITR 258 (SC) SHRI LAXMI NARAIN SHARMA VS. ADDL. CIT RANGE -4 JA IPUR (ITA NO. 59/JP/02).. THE ADVANCE IS DIFFERENT FROM LOAN OR DEPOSIT AS D ECIDED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V/S KHAIRATI LAL & CO. (2005) 144 TAXMAN 178. IN THIS CASE ADVANCE T AKEN BY ASSESSEE WAS ADJUSTED AGAINST SALE CONSIDERATION OF TRUCK. THE H ONBLE HIGH COURT HAS HELD THAT SEC. 269 SS IS NOT APPLICABLE TO THE FACT S OF THE CASE. 13 SIMILARLY IN THE CASE OF CIT VS. KAILASH CHANDRA DE EPAK KUMAR (2009) 317 ITR 351 HONBLE ALLAHABAD HIGH COURT H AS HELD THAT SECTION 269 SS DOES NOT COVER CASH ADVANCE FOR PURPOSE OF G OODS IN FUTURE. HONBLE ITAT JAIPUR HAVE HELD IN THE CASE OF SH. L AXMINARAIN SHARMA VS. ADDL. CIT (ITA NO. 59/JP/02) THAT SECTIO N 269 SS IS APPLICABLE TO LOAN OR DEPOSIT AND NOT TO ADVANCE FO R PURCHASE OF HOUSE. IN VIEW OF THE ABOVE SUBMISSION IT IS HUMBLY REQUES TED THAT IN THE PRESENT CASE ASSESSEE HAS TAKEN ADVANCE FOR SALE OF AGRICULTURE LAND HENCE PROVISIONS OF 269SS ARE NOT APPLICABLE AND CONSEQUE NTLY PENALTY U/S 271 D IS NOT LEVIABLE HENCE SHOULD BE DELETED. THEREAFTER LD. CIT (A) AFTER DISCUSSING THE ORDER OF AO AND SCOPE OF SECTION 269SS INCLUDING THE WRITTEN SUBMISSIONS AND VARIOUS CASE LAWS HELD THAT THE PENALTY LEVIED BY AO WAS NOT JUSTIFIED ACCORDINGLY HE CANCELLED THE LEVY OF PENALTY. FINDINGS OF LD. CIT (A) HAVE BEEN RECORDED IN PARA 2.3 AT PAGES 8 TO 11 AS UNDER :- 2.3. I HAVE CAREFULLY PERUSED THE OBSERVATIONS A ND FINDINGS OF THE AO AND ALSO THE COUNTER SUBMISSIONS MADE BY THE LD. AR VIZ. THE ISSUED UNDER CONSIDERATION. THE SOLE CONTROVERSY IN THE P RESENT CASE IS THAT WHETHER A CASH ADVANCE RECEIVED TOWARDS A PURPORTED LAND DEAL WOULD BE A CONTRAVENTION OF THE PROVISIONS OF SEC. 269SS LE ADING TO THE IMPOSITION OF PENALTY U/S 271 D OR NOT. AS STATED IN THE BACK GROUND OF THE CASE DURING THE SURVEY U/S 133 A DATED 25.09.2006 THE AP PELLANT WAS FOUND MAKING AN INVESTMENT OF RS. 82 LACS IN A PROPERTY D EAL AND OUT OF THE SAME RS. 64 LACS WAS OFFERED AS HIS UNDISCLOSED IN COME. SUBSEQUENTLY HE RETRACTED FROM THE ABOVE CONFESSION AND CLAIMED THE SOURCES OF THE ABOVE CASH INVESTMENT WAS MAINLY OUT OF AN ADVANCE OF RS. 64 LACS RECEIVED IN CASH FROM ONE MR. BIHARI LAL TOWARDS THE SALE DEAL OF HIS LAND PROPERTY. HOWEVER IT WAS FURTHER SUBMITTED THAT AS THE ABOVE DEAL COULD NOT BE MATERIALIZED THEREFORE SUBSEQUENTLY HE HAD PAID B ACK THE ABOVE ADVANCE 14 OF RS. 64 LACS TO SHRI BIHARI LAL. THE AO FOR THE DETAILED REASONS GIVEN IN THE IMPUGNED ORDER WAS OF OPINION THAT ONCE THE DE AL GOT CANCELLED THE CASH ADVANCE OF RS. 64 LACS RECEIVED AGAINST SUCH D EAL CONVERTED INTO LOAN/DEPOSIT IN THE HAND OF THE APPELLANT THEREFOR E THE SAME IS STRUCK BY THE PROHIBITORY PROVISIONS OF SEC. 269 SS AND ACCOR DINGLY LIABLE FOR PENALTY U/S 271 D OF THE ACT. ON THE CONTRARY THE LD. AR ARGUED THAT SEC. 269 SS COVERS THE CASH LOAN AND DEPOSITS OVER AND ABOVE A PARTICULAR LIMITS ONLY AND THE TRANSACTION IN THE NATURE OF C ASH ADVANCES DO NOT FALL UNDER ITS AMBIT. THE LD. AR ALSO RELIED UPON THE DE CISIONS OF VARIOUS COURTS I.E. KHAIRATILAL & CO. (144 TAXMAN 178 (P& H) KAILASH CHANDRA DEEPAK KUMAR (317 ITR 351 (ALL) AND LAXMINARAIN SHA RMA (ITAT-JAIPUR BENCH) WHEREIN IT HAS BEEN UPHELD THAT THE CASH A DVANCE DOES NOT ATTRACT THE PROVISIONS OF SEC. 269 SS AS THE SAID SECTION DEALS WITH THE ISSUES RELATED TO LOANS AND DEPOSIT TRANSACTIONS ON LY. IN THE LIGHT OF THE ABOVE RIVAL STANDS OF THE AO AND THE LD. AR I AM A RRIVED AT THE FOLLOWING CONCLUSIONS- I) MEANING OF RELEVANT TERMS:- FOR THE BATTER UNDERSTA NDING OF THE ABOVE ASPECT THE PROPER MEANING OF THE RELEVANT WO RDS/PHRASES UNDER CONSIDERATION ARE ALSO REQUIRED TO BE EXAMIN ED. THOUGH THESE TERMS HAVE NOT BEEN DEFINED IN THE ACT HOWEV ER AS PER BASED ON THE DICTIONARY MEANING AND IN COMMON PARLA NCE THE MEANINGS OF SUCH WORDS CAN BE UNDERSTOOD AS UNDER:- I. LOANS : - SOME THING LENT NORMALLY IN MONEY TERMS TO RETU RN NORMALLY WITH INTEREST. II. DEPOSITS:- ANY THING STORES OR ENTRUSTED FOR SAFE K EEPING OR AS PLEDGE FOR A BUSINESS / FINANCIAL DEAL AND NORMALLY RETURNABLE OR PAYABLE ON SHORT TERM BASIS. III. ADVANCE :- A PART PAYMENT OF MONEY BEFORE DUE DATE TOWARDS A BUSINESS OR FINANCIAL DEAL. 15 FROM THE ABOVE IT IS EVIDENT THAT THE ABOVE WORDS / PHRASES ARE DIFFERENT TRANSACTIONS IN NATURE AND THEREFORE NEED S TO BE TREATED ACCORDINGLY. II) SCOPE OF SEC. 269 SS:- SIMILARLY IN VIEW OF THE DIVERGENT UNDERSTANDING OF THE PROVISION OF THE LAW ON THE PA RT OF THE AO AND LD. AR AND ALSO TO UNDERSTAND THE CORRECT SCOPE OF THE SEC. 269 SS THE HELP OF THE OF PRINCIPLE OF INTERPRETATION OF LAW WAS CONSIDERED RELEVANT AND ESSENTIAL UNDER THE GIVEN CIRCUMSTANCES. IN THIS REGARD THE CARDINAL RULE OF INTERPRETATION OF LAW STIPULATES THAT WHEN THE MEANING OF THE WORDS / PHRASE USED I N THE STATUE IS CLEAR AND UNAMBIGUOUS THEN SUCH WORDS TO BE GIVEN ITS PLAIN AND GRAMMATICAL MEANING ONLY AND EFFECT OF THE PROVISIO NS OF LAW HAS TO BE GIVEN ACCORDINGLY. IN SUCH SITUATION THE CO URT SHOULD NOT ADD OR SUBTRACT ANYTHING TO THE STATUTORY PROVISION TO ACHIEVE A PARTICULAR RESULT. IN SIMPLER TERM WHEN THERE IS N O AMBIGUITY IN THE LANGUAGE OF THE STATUE THEN SUCH PROVISIONS CANNOT BE INTERPRETED IN DIFFERENT MANNER THEN WHAT IS EMITTED FROM ITS A PPARENT CONSTRUCTION THEREOF AS SUCH. IN THIS REGARD THE R ELIANCE IS PLACED ON FOLLOWING DECISIONS:- II) DHARMENDRA TEXTILE LTD. -306 ITR 277 (SC) III)VIJAY KUMAR & OTHERS -151 ITR 48 (KAR.) IV)T.& ARVINDA REDDY - 120 ITR 461 (SC) V)IPCA LABORATORY LTD. -26 6 ITR 5221 (SC) FROM THE WORDINGS OF THE RELEVANT LAW I.E. SEC. 26 9 SS OF THE ACT THE LEGISLATURE HAS INCORPORATED ONLY TWO TYPE OF T RANSACTIONS I.E. (I) THE RECEIPTS OF ANY LOAN OR (II)DEPOSIT IN CASH FORMAT ONLY. IN MY CONSIDERED VIEW WHEN THE LAWMAKER HAS MENTIONED SUCH SPECIFIC WORDS/PHRASES ONLY THEN IT LEAVES NO ROOM TO ADD OR SUBTRACTS ANY OTHE R WORDS THEREIN. THIS IS SO AS THE TRANSACTIONS LIKE LOANS DEPOSIT AND ADVANCE ARE DIFFERENT 16 IN NATURE THUS CANT BE USED AS SYNONYMOUS TO EACH OTHER IN THE NORMAL COMMERCIAL TERMINOLOGY. III) FINDINGS: - AS DISCUSSED ABOVE SINCE THE MEANING AND ESSENCE OF THE ABOVE PHRASES ARE ALTOGETHER DIFFERENT TO EACH OTHER THEREFORE THEY ARE MUTUALLY EXCLUSIVE IN NATURE AND CANNOT BE USED IN PLACE OF EACH OTHER IN NORMAL CIRCUMSTANCES. THUS NON IN CLUSION OF PHRASE ADVANCE IN SEC. 269SS IS A CRUCIAL ASPECT WHICH THE AO HAS FAILED TO APPRECIATE AS SUCH. MOREOVER I AM ALS O NOT AGREED WITH THE VIEW OF THE AO THAT THE ONCE THE LAND DEAL WAS CANCELLED THE ADVANCE RECEIVED BY THE APPELLANT DID CONVERT I N TO A DEPOSIT AS SUCH. IN MY OPINION THE NATURE OF TRANSACTION IS B ASICALLY DECIDED BY THE INITIAL INTENTION/PURPOSE OF THE PARTIES INV OLVED THEREIN AND NOT THE SUBSEQUENT DEVELOPMENT THEREOF. THIS IS SO IT IS AN ACCEPTABLE PROPOSITION THAT THE WORDS TAKE COLOUR F ROM THE CONTEXT IN WHICH THEY ARE USED AS ALSO UPHELD BY HONBLE S .C. IN THE CASE OF M/S VENKETESWARA HATCHERIES PVT. LTD. (237 ITR 1 74). IT IS AN UNDISPUTED FACT THAT WHEN THE AMOUNT WAS RECEIVED B Y THE APPELLANT IT WAS AN ADVANCE TOWARDS THE LAND DEAL ONLY. ACCORDINGLY THE SAME WOULD REMAIN AS AN ADVANCE EV EN AFTER CANCELLATION OF IMPUGNED DEAL. ONCE IT IS ESTABLISH ED THAT THE NATURE OF IMPUGNED TRANSACTION IS AN ADVANCE ONLY THEN NATURALLY IN THE LIGHT OF THE VARIOUS COURTS DECISIONS AS RE LIED UPON THE APPELLANT (SUPRA) THE PROVISION OF SEC 269SS WOUL D NOT BE APPLICABLE TO SUCH TRANSACTION. CONCLUSION:- IN VIEW OF THE ABOVE DELIBERATION I A M INCLINED TO AGREE WITH THE CONTENTION OF THE LD. AR THAT THE PR OVISION OF SEC. 269SS IS NOT APPLICABLE ON THE ADVANCE RECEIVED BY THE APPEL LANT TOWARDS LAND DEAL UNDER THE GIVEN FACTUAL AND LEGAL POSITION. ACCORDI NGLY THE PENALTY OF RS. 64 LACS IMPOSED U/S 271D IS HEREBY CANCELLED. CONSE QUENTLY THIS GROUND OF APPEAL IS UPHELD. 17 6. THE LD. D/R WHO APPEARED ON BEHALF OF THE DEPART MENT FILED WRITTEN SUBMISSIONS COMPRISING OF 9 PAGES AND HAS ALSO PLACED RELIANCE ON THE DECISION IN CASE OF SUKHDEV RATHI 211 ITR 157 (GUJ.) COPY OF WHICH IS PLACED ON RECORD. RELIANCE HAS ALSO BEEN PLACED IN CASE OF KUM A.B. SHANTHI 255 ITR 258 (SC ) COPY OF THE SAME IS ALSO PLACED ON RECORD. 7. THE LD. D/R EXPLAINED THE WRITTEN SUBMISSIONS FI LED BY HIM AND STATED THAT LD. CIT (A) WAS WRONG IN DRAWING INFERENCE THAT PROVISIONS OF SECTION 269SS ARE NOT APPLICABLE AND THEREFORE PENALTY LEVIED UNDER SECTION 271D W AS NOT CORRECT. IN RESPECT TO PERVERSITY OF THE ORDER ATTENTION OF THE BENCH WAS DRAWN ON WRITTEN SUBMISSIONS WHEREIN IT HAS BEEN EXPLAINED OUT THE ORDER OF LD. CIT (A) IS PERVERSED. 8. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE FIRST PLACED RELIANCE ON THE ORDER OF LD. CIT (A). IT WAS FURTHER SUBMITTED TH AT AO HIMSELF HAS ADMITTED THAT ADVANCE OF RS. 64 LACS WAS TAKEN BY THE ASSESSEE FROM ONE S HRI BIHARI LAL HUF WHICH WAS AGAINST SALE OF SOME AGRICULTURAL LAND AND ONCE IT IS ESTAB LISHED THAT ANY SUM HAS BEEN TAKEN AS ADVANCE ON ACCOUNT OF SALE OF ANY PROPERTY THEN PRO VISIONS OF SECTION 269SS CANNOT BE INVOKED. THE LD. CIT (A) HAS EXAMINED THIS ASPECT IN DETAIL AND THEN ONLY HAS CONCLUDED THAT PENALTY LEVIED UNDER SECTION 271D WAS NOT JUST IFIED. THE ORDER OF LD. CIT (A) IS CORRECT WHICH IS IN ACCORDANCE WITH PROVISIONS OF L AW. THEREFORE IT CANNOT BE TERMED AS PERVERSE. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HEM CAREFULLY. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER PENALTY ORDER ORDER OF LD. CIT (A) AND THE WRITTEN SUBMISSIONS OF LD. D/R AND LD. COUNSEL OF THE ASSES SEE. COPY OF ASSESSMENT ORDER IS 18 PLACED IN THE APPEAL FOLDER. IN PARA 5 THE FOLLOW ING OBSERVATION HAS BEEN MADE BY THE AO :- 5. THE STATEMENT OF SHRI OM PRAKASH SHARMA WAS A GAIN RECORDED ON 8.11.2006 IN WHICH HE REITERATED WHAT HAS BEEN STA TED IN THE SWORN AFFIDAVIT. SHRI BEHARI LAL WAS SUMMONED UNDER SECTI ON 131 AND HIS STATEMENT WAS ALSO RECORDED ON 07.12.2006. IN HIS S TATEMENT HE STATED THAT HE ADVANCED A SUM OF RS. 64 00 000/- IN CASH TO M/S . LADULAL GHISALAL ON 10.06.2006 AGAINST PURCHASE OF AGRICULTURAL LAND. A COPY OF AGREEMENT FOR SALE OF AGRICULTURAL LAND SIGNED BY GHISALAL AND BE HARI LAL IS AVAILABLE ON RECORD. THE SOURCE OF ADVANCE AMOUNT OF RS. 64 00 0 00/- HAS BEEN EXPLAINED TO BE FROM THE SALE PROCEEDS OF AGRICULTU RAL LAND BELONGING TO HIM AND HIS BROTHER SHRI RAM LAL. IT WAS BROUGHT TO HIS NOTICE THAT THE AGRICULTURAL LAND WHICH HE INTENDS TO SELL TO M/S. LADULAL GHISALAL IS WITHIN 8 KM OF MUNICIPAL LIMIT AND HE IS LIABLE TO PAY CA PITAL GAIN TAX. TO THIS HE STATED THAT IF HE IS LIABLE TO PAY TAX ON CAPITA L GAIN HE IS READY TO PAY THE SAME. A PHOTO COPY OF BANK ACCOUNT OF SHRI BEH ARI LAL WITH ORIENTAL BANK OF COMMERCE AJMER ROAD JAIPUR IN WHICH A DE POSIT OF RS. 80 00 000/- HAS BEEN SHOWN IS AVAILABLE ON FILE F ROM WHICH HE HAS WITHDRAWN A SUM OF RS. 70 00 000/- IN CASH ON 05.06 .2006. IN THESE CIRCUMSTANCES I AM OF THE VIEW THAT THE ASSESSEE H AS GENUINELY ESTABLISHED THAT THE MONEY WAS RECEIVED FROM SHRI BERHARI LAL. HOWEVER IN PARA 6 THE AO HAS OBSERVED THAT THE AD VANCE WAS GIVEN ON 10.06.2006 AND THE SAME WAS RETURNED IN MAY 2008 AND JUNE 2008 O N VARIOUS DATES. THESE DATES HAVE ALSO BEEN MENTIONED BY THE AO. FOR THE SAKE OF CLA RIFY WE WOULD LIKE TO REPRODUCE THE FINDING OF AO GIVEN IN PARA 6 ALSO AS UNDER :- 19 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE VIDE LETTER DATED 27.10.2009 STATED THAT THE ASSESSEE HAS RETUR NED THE ADVANCE AMOUNT OF RS. 64 00 000/- TO SHRI BEHARI LAL DURING THE FI NANCIAL YEAR 2008-09 DUE TO CANCELLATION OF THE AGREEMENT FOR PURCHASE O F AGRICULTURAL LAND FROM SHRI BEHARI LAL. IN SUPPORT OF THIS THE ASSESSEE F URNISHED A COPY OF ITS BANK ACCOUNT. A PERUSAL OF THE BANK ACCOUNT REVEALE D THAT THE AMOUNT OF RS. 64 00 000 LAC WAS RETURNED IN INSTALMENTS I.E. RS. 9 LAKH EACH ON 21.05.2008 26.05.08 30.05.08 02.06.08 04.06.08 AND RS. 9.50 LAKH EACH ON 06.06.08 AND 09.06.08 AND NOT IN ONE GO. IT IS ALSO NOTICED THAT THOUGH THE AMOUNT OF RS. 64 LAKHS WAS RETURNED AFTER TWO Y EARS NO INTEREST IS PAID BY THE ASSESSEE TO SHRI BEHARI LAL. THUS IT IS VE RY CLEAR THAT IT WAS AN INTEREST FREE LOAN ADVANCED BY SHRI BEHARI LAL AND RECEIVED BY THE ASSESSEE. THEREFORE VIDE THIS OFFICE LETTER DATED 03.12.2009 THE ASSESSEE WAS ASKED TO STATE AS TO WHY THE ACCEPTANCE OF THE AMOUNT OF RS. 64 LAKHS IN CASH BE NOT TREATED AS LOAN FROM SHRI BEHARI LAL WHICH IS IN VIOLATION OF SECTION 269SS OF THE IT ACT 1961. THE AO WAS SATISFIED IN RESPECT TO THE SOURCE OF AD VANCE GIVEN TO THE ASSESSEE. THEREFORE AO HAS NOT MADE ANY ADDITION UNDER SECTI ON 68. HOWEVER HE HAS OBSERVED IN HIS ORDER THAT PROVISIONS OF SECTION 269SS HAS BEEN VIOLATED. AFTER THAT THE MATTER WAS REFERRED TO THE ADDITIONAL COMMISSIONER OF INCOME-T AX FOR LEVYING THE PENALTY UNDER SECTION 271D. ACCORDINGLY THE ADDITIONAL COMMISSI ONER WHO LEVIED THE PENALTY ISSUED NOTICE FOR PENALTY UNDER SECTION 271D FIXING HEARIN G ON 20.5.2010. DETAILED REPLY WAS FILED. HOWEVER THE ADDITIONAL COMMISSIONER WAS NOT SATISFIED WITH THE REPLY. ACCORDING TO HIM THE PROVISIONS OF SECTION 269SS VI OLATED AND THEREFORE HE LEVIED THE PENALTY OF RS. 64 00 000/-. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS AS MENTIONED ABOVE FOUND THAT ONCE IT IS ESTABLISHED T HAT THE ADVANCE WAS RECEIVED AGAINST 20 SALE OF ANY PROPERTY THEN PROVISIONS OF SECTION 26 9SS ARE NOT APPLICABLE. TAKING INTO CONSIDERATION VARIOUS CASE LAWS THE PENALTY LEVIED BY AO WAS DELETED. FINDINGS OF LD. CIT (A) HAVE BEEN REPRODUCED SOMEWHERE ABOVE IN THI S ORDER. WE HAVE SEEN THE ORDER OF AO AND FOUND THAT AO HAS HIMSELF ADMITTED THAT A SUM OF RS. 64 00 000/- WAS RECEIVED AS ADVANCE AGAINST SALE OF LAND BY THE ASS ESSEE. THIS FINDING HAS BEEN RECORDED IN PARA 5 OF ASSESSMENT ORDER WHICH ARE REPRODUCED SOMEWHERE ABOVE IN THIS ORDER. THE PENALTY UNDER SECTION 271D IS LEVIABLE ON ACCOUNT O F VIOLATION OF PROVISIONS OF SECTION 269SS AND THE CAUSE OF ACTION WILL BE SEEN ON THE D ATE OF TRANSACTION BY WHICH CASH AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE. THE CASH AMOUNT WAS RECEIVED IN THE YEAR OF 2006 AND AO HAS HIMSELF ADMITTED THAT ADVANCE OF RS . 64 00 000/- WAS RECEIVED BY THE ASSESSEE ON ACCOUNT OF SALE OF LAND TO SHRI BEHARI LAL. SALE AGREEMENT WAS EXAMINED. SOURCE OF ADVANCEMENT OF RS. 64 00 000/- WAS EXAMIN ED. STATEMENT OF SHRI BEHARI LAL WAS RECORDED BY WHICH IT HAS BEEN CLEARLY ADMITTED BY HIM THAT IF ANY CAPITAL GAIN IS LIABLE TO BE PAID ON ACCOUNT OF SALE OF AGREED LAND THEN HE WILL PAY THE CAPITAL GAIN. IT MEANS SOURCE HAS BEEN EXPLAINED. THEREAFTER SALE A GREEMENT WAS ENTERED WITH THE ASSESSEE WHICH WAS ALSO FOUND CORRECT AND THEREFOR E AO HAS GIVEN A FINDING THAT ADVANCE GIVEN TO THE ASSESSEE WAS GENUINE AND NO AD DITION HAS BEEN MADE UNDER SECTION 68. HOWEVER THE AO INFERRED THAT THIS WAS NOT ADV ANCE BUT WAS LOAN AS THE SAME WAS RETURNED AFTER TWO YEARS. IN OUR VIEW THIS OBSERV ATION OF AO IS WITHOUT ANY COGENT REASON. THE BASIC POINT IS THAT ON WHICH ACCOUNT T HE AMOUNT WAS RECEIVED BY THE ASSESSEE AND IT HAS BEEN ESTABLISHED THAT THE AMOUNT RECEIVE D BY ASSESSEE IN CASH WAS ON ACCOUNT OF SALE OF LAND THROUGH AN AGREEMENT WHICH WAS SIGN ED BY THE ASSESSEE AS WELL AS SHRI BEHARI LAL AND ON ACCOUNT OF ADVANCE RECEIVED AGAIN ST SALE OF PROPERTY PROVISIONS OF 21 SECTION 269SS ARE NOT APPLICABLE. THERE IS NO DISP UTE IN THIS REGARD. LATER ON SALE AGREEMENT WAS CANCELLED BECAUSE OF SOME REASON AND THE AMOUNT OF ADVANCE RECEIVED WAS RETURNED IN THE YEAR 2008. THERE IS NO MATERIA L ON RECORD THAT SHRI BEHARI LAL HAS GIVEN THIS AMOUNT AS LOAN. HIS STATEMENT WAS RECOR DED BY WHICH HE HAS CATEGORICALLY ADMITTED THAT ADVANCE WAS GIVEN BY HIM FOR PURCHASE OF LAND FROM THE ASSESSEE. NOTHING WAS BROUGHT ON RECORD THAT THIS ADVANCE GIVEN IN 20 06 WAS ON ACCOUNT OF LOAN. THEREFORE MERELY ON THE BASIS OF SUSPICION THE AMOUNT GIVEN A S ADVANCE WAS TREATED AS LOAN IN OUR CONSIDERED VIEW WAS NOT JUSTIFIED. THE LD. CIT (A ) HAS TAKEN INTO CONSIDERATION THIS ASPECT. A FINDING HAS BEEN RECORDED IN THIS RESPEC T AT PAGES 9 TO 11 WHERE SCOPE OF SECTION 269SS IS EXPLAINED AND THEREAFTER IT IS HEL D THAT ON ACCOUNT OF SUM TAKEN AS ADVANCE PENALTY CANNOT BE LEVIED UNDER SECTION 269 SS. 10. NOW WE WILL DEAL WITH THE WRITTEN SUBMISSION FI LED ON BEHALF OF THE DEPARTMENT. IN PARAS 1 TO 9 THE FACTS OF THE CASE AND FINDING OF LD. CIT (A) HAS BEEN DISCUSSED BY LD. D/R IN HIS WRITTEN SUBMISSION. THEREAFTER THE ARGU MENT HAS BEEN GIVEN AT PAGES 5 TO 9. IN PARA-A OF HIS WRITTEN SUBMISSION THE LD. D/R HA S MENTIONED THAT ASSESSMENT ORDER PASSED BY AO GIVING FINDING OF VIOLATION OF PROVISI ONS OF SECTION 269SS HAVE BEEN CHALLENGED BELATEDLY BEFORE LD. CIT (A). SUCH APPE AL IS NOT MAINTAINABLE. THEREFORE THE FINDING OF AO IN RESPECT OF VIOLATION OF SECTION 26 9SS IS FACTUAL AND ONCE PROVISIONS OF SECTION 269SS HAS BEEN HELD AS APPLICABLE PENALTY LEVIED BY AO WAS CORRECT. 11. IN THIS RESPECT WE WOULD LIKE TO HOLD THAT THIS WAS JUST INITIATION OF PROCEEDINGS UNDER SECTION 269SS IN THE ASSESSMENT ORDER AND PEN ALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT. THEREFORE THE AO HAS REFERRED THE MATTER TO THE ADDITIONAL COMMISSIONER WHO WAS EMPOWERED TO LEVY THE PENALTY AND ADDITIONAL COMMISSIONER 22 HAS GIVEN A SHOW CAUSE NOTICE THAT WHY PENALTY UNDE R SECTION 271D BE NOT IMPOSED AND AFTER AFFORDING OPPORTUNITY THE ADDITIONAL COMMISS IONER HAS LEVIED THE PENALTY. THEREFORE MERELY THAT PROVISIONS OF SECTION 269SS ARE APPLICABLE PENALTY IS JUSTIFIED IN OUR VIEW IS NOT CORRECT. WHETHER ASSESSEE HAS FILE D APPEAL BEFORE LD. CIT (A) BELATEDLY AGAINST ASSESSMENT ORDER WILL NOT DETERMINE THE LEV Y OF PENALTY BECAUSE IN THAT APPEAL THE ASSESSEE HAS NOT CHALLENGED ANY LEVY OF PENALTY. L EVY OF PENALTY IS APPEALABLE SEPARATELY. INITIATION OF PENALTY PROCEEDINGS IS P RE-MATURE AND CANNOT BE DECIDED BEFORE LEVYING OF THE PENALTY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE FIND NO WEIGHT IN THE ARGUMENT OF THE LD. D/R. 11.1. IN PARA-B AND C THE LD. D/R HAS MENTIONED TH AT SHRI OM PRAKASH SHARMA HAVING ADMITTED UNDISCLOSED INCOME OF RS. 65 65 000/- DURI NG SURVEY RETRACTED FROM HIS STATEMENT ALLEGING COERCION AND FILED AFFIDAVIT ON 03.10.2006 AND HAD SUBMITTED THAT A SUM OF RS. 64 00 000/- WAS TAKEN AS ADVANCE FROM SH RI BEHARI LAL AGAINST SALE OF LAND OF HUF. SUCH RETRACTION IS NOT ACCEPTABLE AS THE ASS ESSEE HAS FAILED TO PROVE GENUINENESS OF THE CLAIM OF AGREEMENT OF SALE OF HUF LAND. VAR IOUS CASE LAWS HAVE BEEN RELIED UPON BY LD. D/R. THEREAFTER HIS WRITTEN SUBMISSIONS ARE IN THIS RESPECT. 12. AFTER CONSIDERING THESE ARGUMENTS WE FIND THAT THESE ARGUMENTS ARE NOT ACCEPTABLE FOR THE SIMPLE REASON THAT THE AO HIMSEL F ADMITTED THAT ADVANCE GIVEN TO THE HUF OF SHRI OM PRAKASH SHARMA WHO WAS THE KARTA OF HUF AND THEREFORE NO ADDITION HAS BEEN MADE WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3). THE AO HIMSELF ADMITTED THAT THE ADVANCE GIVEN IS GENUINE. NOW RA ISING AT THIS POINT OF TIME THAT THE AMOUNT OF ADVANCE OF RS. 64 00 000/- WAS NOT GENUIN E DOES NOT HOLD GOOD. ACCORDINGLY WE REJECT THIS ARGUMENT ALSO. 23 12.1. IN PARA D IT HAS BEEN STATED THAT IT IS NOT APPRECIATED THAT LD. CIT (A) HAS DECIDED AND ALLOWED THE APPEAL AGAINST PENALTY ORDER HOLDIN G THAT PROVISIONS OF SECTION 269SS ARE NOT VIOLATED WITHOUT DECIDING THE APPEAL WHICH WAS TIME BARRED FILED AGAINST THE ASSESSMENT ORDER. WHETHER LD. CIT (A) HAS DECIDED THE APPEAL FILED AGAINST THE ASSESSMENT ORDER BELATEDLY OR NOT IS NOT RELEVANT A T THIS POINT OF TIME AS ADDITIONAL COMMISSIONER WHO WAS EMPOWERED TO LEVY PENALTY HAS LEVIED THE PENALTY AND AGAINST THIS ORDER THE APPEAL WAS FILED IN TIME AND LD. CIT (A) DISCUSSING THE ISSUE IN DETAIL HAS HELD THAT PROVISIONS OF SECTION 269SS ARE NOT APPLI CABLE. MOREOVER NOTHING HAS BEEN BROUGHT ON RECORD TO THE NOTICE OF LD. CIT (A) BY T HE AO THAT IF THERE IS ANY APPEAL AGAINST ASSESSMENT ORDER THAT SHOULD BE DECIDED FIR ST. IT IS PERTINENT TO NOTE THAT BEFORE TAKING UP THE MATTER IN APPEAL EVERY CIT (A) ISSUE S NOTICE TO THE ASSESSEE AS WELL AS TO THE AO. IF AO WAS OF THE VIEW THAT SOMETHING HAS TO BE ARGUED ON BEHALF OF THE DEPARTMENT THEN HE SHOULD HAVE APPEARED BEFORE LD. CIT (A) ON THE DATE GIVEN. NEITHER THE AO APPEARED BEFORE THE LD. CIT (A) NOR ANY INFO RMATION WAS BROUGHT TO THE NOTICE OF LD. CIT (A). THE LD. CIT (A) HAS DECIDED THE APPEA L WHICH WAS PENDING BEFORE HIM. THEREFORE THIS ARGUMENT OF LD. D/R ALSO DOES NOT H OLD GOOD. THEREFORE THE SAME IS ALSO REJECTED. 12.2. IN PARA E IT HAS BEEN MENTIONED THAT LD. CIT (A) HAS TAKEN INTO CONSIDERATION VARIOUS CASE LAWS WHICH WERE ON DIFFERENT FOOTING. FOR EXAMPLE THE DECISION RELIED UPON IN CASE OF DHARMENDRA TEXTILE LTD. 306 ITR 277 (SC ) RELATES TO PENALTY UNDER SECTION 271(1)(C). THEREFORE THE SAME IS NOT APPLICABLE. ANOTHER DECISION IS IN CASE OF PATIL VIJAY KUMAR 151 ITR 48 (KER.) WHICH WAS IN RESPECT OF EXEMPTION UNDER SECTION 10(13A). THEREFORE SAME IS NOT APPLICABLE. ANOTHE R DECISION IS IN CASE OF T.N. ARVIND 24 REDDY 120 ITR 46 (SC) WHICH IS IN RESPECT OF EXEMP TION UNDER SECTION 54. THEREFORE THE SAME IS NOT APPLICABLE. ANOTHER DECISION IS IN CASE OF IPCA LABORATORIES 266 ITR 521 (SC) WHICH RELATES TO SECTION 80HHC. THEREFORE THE SAME IS NOT APPLICABLE. ANOTHER DECISION IS IN CASE OF VENKATESHWAR HATCHERIES PVT. LTD. 237 ITR 174 (SC) WHICH IS IN RESPECT OF SECTION 80HHA 80-I 80-J. THEREFORE TH E SAME IS NOT APPLICABLE. 13. WE HAVE SEEN THE ORDER OF LD. CIT (A). THESE D ECISIONS ARE MENTIONED AND WE FIND THAT LD. CIT (A) HAS NOT GIVEN THE FINDING ON THE BASIS OF THESE DECISIONS BUT HE HAS GIVEN FINDING BY ASCERTAINING THE FACTUAL ASPECTS T HAT THE ASSESSEE RECEIVED ADVANCE IN LIEU OF SALE OF LAND THROUGH AGREEMENT. THESE CASE S WERE CONSIDERED BY LD. CIT (A) FOR THE PURPOSE OF DRAWING INTERPRETATION OF LOAN DISPU TE AND ADVANCE. THE LD. CIT (A) HAS MENTIONED THAT IN THE CASE OF M/S. VENKATESHWAR HAT CHERIES PVT. LTD. (SUPRA) WHEREIN IT WAS ACCEPTED THAT PROPOSITION OF WORDS TAKE COLOUR FROM THE CONTEXT IN WHICH THEY ARE USED. OTHERWISE LD. CIT (A) HAS NOT CONSIDERED TH IS DECISION FOR THE REASON THAT PROVISIONS OF SECTION 269SS ARE NOT APPLICABLE. TH EREAFTER THE LD. CIT (A) HAS CLEARLY MENTIONED THAT THE ASSESSEE HAS RECEIVED ADVANCE AG AINST THE SALE OF LAND AND ON ADVANCE PROVISIONS OF SECTION 269SS ARE NOT APPLICABLE. TH EREFORE WE HOLD THAT THIS CONTENTION OF LD. D/R ALSO DOES NOT ESTABLISH THE ORDER OF LD. CI T (A) AS PERVERSE. 13.1. REGARDING THE DECISION OF KUM A.B. SHANTHI 2 55 ITR 258 (SC) AND THE DECISION IN CASE OF SUKHDEV RATHI 211 ITR 157 (GUJ.) IT WA S STATED THAT THEY ARE IN FAVOUR OF THE DEPARTMENT AND NOT IN FAVOUR OF THE ASSESSEE. THER EFORE LD. CIT (A) WAS NOT JUSTIFIED IN TAKING INTO CONSIDERATION THESE DECISIONS ALSO. 14. WE HAVE SEEN THE ORDER OF LD. CIT (A) AND WE DO NOT FIND ANYWHERE THAT LD. CIT (A) HAS DELETED THE ADDITION ON THE BASIS OF THESE DECISIONS. WE HAVE ALSO SEEN THESE 25 DECISIONS COPIES OF WHICH ARE PLACED ON RECORD AND NOTED THAT THESE DECISIONS ARE NOT IN RESPECT OF ADVANCE RECEIVED AGAINST SALE OF ANY LAN D. THEREFORE IT CANNOT BE SAID THAT THIS IS IN FAVOUR OF THE DEPARTMENT OR IN FAVOUR OF THE ASSESSEE. THESE DECISIONS MAY BE RELIED UPON BEFORE LD. CIT (A) FOR ANY OTHER PURPOSE OR FO R MITIGATING THE PROVISIONS OF SECTION 273B. IN CASE OF 271D ALSO THE PROVISIONS OF SECT ION 273B HAS TO BE TAKEN INTO CONSIDERATION IF THERE WAS ANY BONA FIDE INTENTION. HOWEVER AS DISCUSSED ABOVE THE FACTS OF THE PRESENT CASE ARE VERY CLEAR AS THE AMO UNT WAS TAKEN AS ADVANCE AND NOT AS LOAN OR DEPOSIT. THEREFORE PROVISIONS OF SECTION 2 69SS ARE NOT APPLICABLE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE RE ASONING GIVEN BY LD. CIT (A) WE ;HOLD THAT THE ORDER OF LD. CIT (A) IS CORRECT WHICH WAS IN ACCORDANCE WITH PROVISIONS OF LAW AND THEREFORE THE ORDER OF LD. CIT (A) IS FAR AWA Y FROM ANY PERVERSITY. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT (A). 15. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISM ISSED. 16. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 02 .02.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR D/- COPY FORWARDED TO :- THE ITO WARD 7(2) JAIPUR. M/S. LADDU LAL GHEESA LAL HUF JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 953/JP/2011) BY ORDER AR ITAT JAIPUR. 26