Income Tax Appellate Tribunal - Kolkata
Basil Express Limited, Kolkata vs Assessee
आयकर अपीलीय अधीकरण, Ûयायपीठ - " ए ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "ए" BENCH : KOLKATA
(सम¢)Before ौी डȣ.
डȣ. के. ×यागी,
×यागी, Ûयायीक सदःय, एवं/and ौी सी.
सी.डȣ.
डȣ.राव,
राव लेखा सदःय)
[Before Hon'ble Sri D. K. Tyagi, JM & Hon'ble Sri C. D. Rao, AM]
आयकर अपील संÉया / I.T.A Nos. 1912 to 1914/Kol/2009
िनधॉरण वषॅ/Assessment Years : 2002-03 to 2004-05
&
आयकर अपील संÉया / I.T.A No. 1915 /Kol/2009
िनधॉरण वषॅ/Assessment Year : 2004-05
&
आयकर अपील संÉया / I.T.A Nos. 1916 & 1917/Kol/2009
िनधॉरण वषॅ/Assessment Years : 2007-08
Basil Exports Ltd. -Vs- Deputy Commissioner of Income-tax,
(PA No.AACCB 2213 R) C.C-XXII, Kolkata
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
For the Appellant: Sri A.. K. Tibrewal
For the Respondent : Sri S. C. Jain
आदे श/ORDER
Per Bench :
These appeals filed by the assessee are directed against the common order passed by the Ld. CIT(A), Kolkata dated 01.09.2009 for assessment years 2002-03 to 2004-05 and 2007-08 on the ground of confirming the penalty u/s. 271D and 271E of the I. T. Act. Since facts are identical and grounds are common, we dispose of all the appeals by this consolidated order for the sake of convenience.
2. Facts in brief are that the assessee had filed four appeals against the penalty orders passed by the Ld. CIT(A) u/s. 271D of the I. T. Act for AYs. 2002-03 to 2004-05 and 2007-08 confirming the penalty of Rs.25,56,000/-, Rs.25,81,000/-, Rs.7,53,000/- and Rs.3,57,500/- respectively. The assessee has also filed two appeals against the penalty order passed by the Ld. CIT(A) u/s. 271E of the I. T. Act for AYs. 2004-05 and 2007-08 confirming penalty of Rs.5,15,300/- and Rs.3,57,500/- respectively. The Income Tax Department had carried out a search & seizure operations U/s.132 of the 2 Income tax Act. 1961 against the Basil/Appelline Group of cases of which the assessee was part of, on 27.12.2006. Following the search notices U/S. 153A of the Income Tax Act, 961 had been issued and on the basis of the returns file by the assessee the Assessing Officer had made assessments U/s. 153A of the Income Tax Act,1961 on 14- 07-2008. The Assessing Officer had intimated the Addl. CIT, Range VI, Kolkata of the fact of the assessee accepting monies on account of Preference Shares / Debentures amounting to Rs.20,000/- or more from any particular person otherwise than by an account payee cheque or account payee bank draft in the assessment years under appeal. The Addl, CIT , Range VI, Kolkata had, after hearing the assessee, levied Penalty u/s. 271D of the Income Tax Act, 1961 in the said assessment years on 31-12-2008. Similarly, on the intimation by the Assessing Officer of the assessee had made repayment of monies taken on account of Preference Shares / Debentures amounting to Rs.20,000/- or more to any particular person otherwise than by an account payee cheque or account payee bank draft in the assessment years under appeal, the Addl. CIT, Range VI. Kolkata, had after hearing the assessee, levied Penalty U/s.271E of the Income Tax Act, 1961 for the assessment years under appeal on 31-12-2008.
The Addl.CIT, in his similar penalty orders under section 271D, had held that the assessee had not denied the fact of receipt of cash over Rs.20,000/- from any single person nor it objected to the aggregate of such amount accepted in cash. Similarly, the Addl. CIT, in his similar penalty orders under section 271E, had held that the assesee had not denied the fact of repayment in cash over Rs.20,000/- to any single person nor it objected to the aggregate of such amount repaid in cash. After establishing the fact of receipt of Preference share / Debenture application amounts in cash by the assessee from the applicants and the fact of repayment of Preference share/ Debenture in cash by the Assessee to the applicants , the Addl.CIT had placed reliance upon the Judgement of the Hon'ble Jharkhand High Court in the case of Bhalotia Engineering Works (P) Ltd Vs CIT. 275 ITR 399, to hold that share application money is a Deposit and acceptance of share application money by the assessee in cash in excess of Rs.20,000/- violated the provisions of Section 269 SS of the Income Tax Act, 1961, and repayment of share application money by the assessee in cash in excess of Rs.20,000/- violated the provisions of Section.269T of the Income Tax Act,1961. The gist of the Judgement is as under:
3"Section 269S5 of the I.T. Act, 1961, was inserted with a view to prevent transactions in black money and to ensure that payment of Rs.20,000/- and above are traceable to transactions through a bank. If the mischief that is sought to be averted is kept in mind, it will be appropriate to hold that any payment of Rs. 20,000/-or above made to a company as share application money hold be as provided in Section 269SS. Even if share application cannot be considered to be a loan within the meaning of Sec..269 SS it partakes of the character of a deposit, since it is repayable in specie on refusal to allot shares and is repayable if recalled by the applicant, before allotment of shares and the conclusion of the contract. Hence, the acceptance of share application money in cash amounting to Rs.20,000/-. or more violates the provisions of Sec.269SS."
The Addl CIT had also held, in the context of levy of penalty under section 271E, that it is clear that if the acceptance of cash for the purpose of contribution to share capital/debenture is held as violated the provisions of Sec.269SS of the IT Act it is equally clear that the repayment of such money exceeding Rs.20,000/- in cash to a particular person violated the provisions of Sec.269T of the 1 T Act. Further, the debenture, as per the Addl. CIT, itself means debt or loan and the repayment of this money in cash will definitely attract the provisions of Sec.269T of the I T Act.
Accordingly, the Addl.CIT had held that the assessee had contravened the provisions of Sec.269SS by accepting preference share capital or debenture money amounting to Rs.25,56,000/-,Rs.25,81,000/-, Rs.7,53,000/- and Rs.3,57,500/- for Assmt Years 2002-03,2003-04 2004-05 and 2007-08 respectively otherwise than by account payee cheque or account payee bank draft . The Addl.CIT had, therefore, levied penalty U/s.271 D of Rs.25,56,000/-,Rs.25,81,000/- Rs.7,53,000/- and Rs.3,57,500/- for Assmt Years 2002-03, 2003-04, 2004-05, and 2007-08 respectively against the assessee.
The Addl.CIT had also held that the assessee had contravened the provisions of Sec.269T by repaying the preference share capital or debenture money amounting to Rs.5,15,300/- and Rs.3,57,500/- for Assmt Years 2004-05, and 2007-08 respectively otherwise than by account payee cheque or account payee bank draft . Accordingly, the Addl. CIT had levied penalty U/s.271T of Rs.5,15,300/- and Rs.3,57,500/- for Assmt Years 2004-05, and 2007-08 respectively against the assessee. In appeal, the Ld. CIT(A) confirmed the action of the Assessing Officer. Being further aggrieved, the assessee is in appeal before us.
3. At the time of hearing before us both the parties conceded that the issue is covered in favour of the assesee by the following series of judgments :
4i) M/s. Pravez Constructions (P) Ltd. Vs. Addl. CIT, ITA No. 1206/K/2005 for A.Y. 2002-03 dated 8.9.2006,
ii) VLS Foods (P) Ltd. Vs. Addl. CIT (2010) 128 TTJ 1N (TDEL),
iii) CIT Vs. Rugmini Ram Ragav Spinners P. Ltd. (2008) 304 ITR 0417,
iv) Pradip J. Mehta Vs. CIT (2008) 300 ITR 231 (SC),
v) ITO Vs. Avadh Rubber Ltd., ITA No. 1853/K/2008 for A.Y. 1999-2000 dt.
28.5.2010,
vi) CIT Vs. Speedways Rubber Pvt. Ltd. (2010) 326 ITR 31 (P&H) and
vii) ITO Vs. Cookme (Spice) Pvt. Ltd. ITA Nos. 999/K/2008, 599/K/2009 and 42/K/2010 date 16.11.2010.
The Co-ordinate Bench of this Tribunal in the case of ITO Vs. M/s. Avadh Rubber Ltd. in ITA No.1853/K/2008 for Assessment Year 1999-2000 dated 28th May, 2010 has held as under :
"5. After hearing the rival submissions, carefully perusing the material on record and case laws cited by both the parties, we find that the sole dispute is whether the contribution of Abhisek Saraf in cash towards share application money in the sum of Rs. 3 lacs should be construed to be a deposit within the meaning of s. 269SS in order to apply the provisions of s. 271D. Before we embark on the controversy involved in the only issue, it is apposite to consider the provisions which led to the dispute. The provisions of s. 271D reads as under:
"Penalty for failure to comply with the provisions of section 269SS. 271D. (1) If a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner."
Therefore the conditions precedent for imposing penalty u/s. 271D are satisfied only when the assessee accepts loans or deposits in infringement of the provisions of s. 269SS and not otherwise. The provisions of s. 269SS read as under:
"Mode of taking or accepting certain loans and deposits.
269SS. No persons shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if, -
(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or
(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or
(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is [twenty] thousand rupees or more:
Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,-
(a) Government; (b) any banking company, post office savings bank or co-operative bank; 5 (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in section 617 of the Companies Act, 1956 (1 o0f 1956); (e) Such other institution, association or body or class of institutions, associations or bodies
which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette:
Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither or them has any income chargeable to tax under this Act.
Explanation. - For the purpose of this section,-
(i) "Banking company" means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank of banking institution referred to in section 51 of that Act;
(ii) "Co-operative bank" shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949);
(iii) "loan or deposit" means loan or deposit of money."
In order to ascertain the object of the enactment, we are of the considered opinion that the rationale behind the provision is required to be understood in the correct perspective. The Hon'ble Apex Court in the case of ADIT -Vs- Kumari A. B. Shanti (supra), dealt with the object of introduction of the provision of s. 269SS as under:
"The object of introducing section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he makes some false entries, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so-called lender also to manipulate his records to suit the plea of the taxpayer. The main object of section 269SS was to curb this menace of making false entries in the account books and later giving an explanation for the same."
The Central Board of Direct Taxes in Circular No. 387 dated 06-07-1984 has in explanatory notes issued after the Finance Act, 1984 has considered the same as under:
"32.1 Unaccounted cash found in the course of searches carried out by the Income Tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons. Unaccounted income is also brought into the books of account in the form of such loans and deposits, and taxpayers are also able to get confirmatory letters from such persons in support of their explanation.
32.2 With a view to countering this device, which enables taxpayers to explain away unaccounted cash or unaccounted deposits, the Finance Act has inserted a new section 269SS in the Income Tax Act debarring persons from taking or accepting, after 30th June, 1984 from any other person, any loan or deposit otherwise than by an account payee cheque or account payee bank draft if the amount of such loan or deposit or the aggregate amount of such loan and deposits is Rs. 10,000/- or more....."
Therefore in our considered opinion the provision was introduced to eliminate the proliferation of black money in the society at large and not otherwise. In the instant case, there was no violation of the Legislative intent behind the introduction of s. 269SS 6 inasmuch as the transaction has duly been properly recorded in the accounts with proper narration. We find the only confusion may have arisen because in the audit report u/s. 44AB of the Income Tax Act, 1961 such amount was inadvertently included in the schedule of "Loans". However, in the course of proceedings against the assessment order before the Ld. CIT(A) such mistake was corrected and the addition was deleted by the first appellate authority after considering the genuineness of the amount received, a copy of such order is enclosed at paper book page 24, which was upheld by the ITAT "D" Bench Kolkata in I.T.A. No. 1767 /Kol/ 2003 dated 27/04/2004, a copy of which order is enclosed at paper book page 17. It is therefore not in dispute that the Share Application Money did not partake of the character of evil which was sought to be rooted out by incorporating the provision of s. 269SS and as such there is no malafide intention in this respect. It is not in dispute that the Share Application Money of Rs. 3,00,000/- received from Shri Abhisek Saraf is genuine and that there was no intention to deceive the Revenue. Therefore, in our considered opinion, there is no contravention of the law if we read the facts of the case keeping in mind the intention of the Legislature. Further it was the contention of the Revenue that the provision of s. 269SS has to be construed by giving effect to the mischief rule and on such premise, reliance was placed on the decisions in the cases of Mysore Sales International Ltd. -Vs- DCIT supra and State of Bihar & Another -Vs- CIT supra. However, we find that the provisions of s. 269SS read with s. 271D are penal in nature. Therefore, in our considered opinion, the rule of strict construction will apply while interpreting a penal statute, which cannot cover cases not specifically included within its letter. This finding of ours is also fortified with the decision of the Hon'ble Jurisdictional High Court in the case of Ganesh Properties P. Ltd. -Vs- CIT (1993) 202 ITR 434 (CAL) wherein it was settled that a penal provision must be construed strictly in accordance with the conditions laid down therein. Therefore, the interpretation of the provision of s. 269SS read with s. 271D should be strictly construed and this argument of the Ld. DR is rejected. Now coming to the issue at hand, both the parties have relied upon the catena of judgments in support of their respective claims. The Ld. DR has relied on the following decisions which are dealt with as under:
i) J. J. Foams (P) Ltd. -Vs- CIT supra In this case, the assessee itself had treated the amounts raised by it as deposits and paid interest thereupon without shares being allotted and on such premise it was held that the provisions of s. 40A(8) were applicable. In the instant case, the issue is one of penalty u/s. 271D read with s. 269SS wherein the contribution in cash towards share application money received which was considered to be a deposit within the meaning of that enactment. In the case before us, the shares had been allotted to the applicant and as such, the facts and the issues are entirely different and hence not applicable.
ii) Dhaniji R. Zalte -Vs- ACIT supra In this case a search operation was carried out at the residential and other premises of an advocate assessee who was found to have violated the provisions of s. 269SS and 269T inasmuch as loans and deposits were accepted and repaid in cash and on such premise penalties imposed u/s. 271D & E respectively were upheld. In the instant case, the issue is regarding the receipt of share application money in cash which was not a deposit and against which shares were issued. Therefore, the facts in the case cited are totally distinguishable and hence not applicable in the instant case.
iii) Kasi Consultant Corporation -Vs- DCIT supra In this case the assessee firm has accepted deposits from public for the purpose of its business. Penalty proceeding u/s. 271D was initiated as it was found that the assessee 7 has contravened the provisions of s. 269SS and as it had failed to demonstrate the shortage of cash in the business which made the assessee accept the cash. In such circumstances, the penalty was levied and upheld. Whereas, in the instant case, the issue was one of share application money against which shares were actually issued and therefore, the facts have no relevance to the case before us.
iv) Thenamal Chharjjer -Vs- JCIT supra In this case it was observed that the assessee had not recorded the cash transactions in its books of accounts and those transactions surfaced only after a survey was conducted by the Department. Therefore, the facts of the case are altogether different from the facts in the case under appeal before us.
v) ITO -VS- Sunil M. Kasliwal supra In this case it was found that the assessee had accepted cash loan from his minor children, wife and two other ladies which were in contravention of s. 269SS and as such penalty was imposed u/s. 271D. It was held that the penalty could not be maintained in respect of the loans taken by assessee from his minor children and wife whereas the penalty was sustained in respect of loan from two ladies in absence of reasonable cause. In the case before us, the issue is entirely different and the ratio of the decision in the matter cited is not applicable at all.
vi) CIT -Vs- Sunil Kumar Goel supra In this case the issue decided was that it was the duty of an Appellate Authority to give its reasons in the order and the conclusions reached therein. In the instant case, the order of the Ld. CIT(A) is a very reasoned order and he has followed the directions given by the ITAT, "C" Bench, Kolkata in ITA No. 487/Kol/2005 dated 04/07/2005 in toto. Therefore, in our considered opinion, there was no violation of the dictum of speaking order so that the decision relied on has no relevance in the facts of the case.
vii) Chaubey Overseas Corporation -Vs- CIT supra In this case the assessee has received cash for supply of silk fabric which could not be executed in time and the money so received was treated to be a deposit as the assessee was under obligation to return it and in such circumstances, the penalty for contravention of s. 269SS was levied and upheld. Whereas in the instant case the money received from Sri Abhisek Saraf in the sum of Rs. 3,00,000/- on 31-03-1999 was fully absorbed and set off against the issue of shares and as such the very conception of deposit is not applicable in this case.
viii) CIT -Vs- Shanta Electrical Industries supra In this case the issue involved was the question of application of the provisions of s. 271(1(a) centering on the question of "reasonable cause". Since the issue of reasonable cause is not relevant in the context of the instant case therefore, the ratio of such judgment has no application.
ix) CIT -Vs- Capital Electronics (Gariahat) supra The issue involved in this case was also one of "reasonable cause" for default. Since in the appeal before us the issue of reasonable cause has no application, the decision is not applicable in the facts of the present case.
Thus, the ratio as laid down in the case laws relied on by the Revenue is not applicable to the facts of this case.
8The case laws relied upon by the Ld. Counsel of the assessee are dealt with as under:
i) CIT -Vs- Rugmini Ram Ragav Spinners P. Ltd. supra In this case, the issue was regarding levy of penalty under s. 271E for cash payments made by the assessee pertaining to refund of share application money. While deciding this issue, it was held that the money retained by the assessee company was neither deposit nor loan because the same was received towards allotment of shares from sixteen persons. It was also held that the provisions of ss. 269SS and 269T have application only in limited way in respect of deposits or loans and when it is neither deposit nor loan, the provisions of ss. 269SS and 269T have no application at all. It was held that no penalty can be imposed under s. 271D also because once it is held that the receipt of share application money is neither loan nor deposit, the provisions of ss. 269SS and 271D are, not attracted because these provisions are applicable only when the assessee receives loan or deposit in cash.
ii) Jagvijay Auto Finance P. Ltd. -Vs- ACIT supra In this case, the issue was that the assessee received cash contribution towards share application money and in such scenario, it was held that it would be incorrect to construe share application money as loan or deposit inasmuch even after enlargement of meaning of 'deposit' by Direct Tax (Amendment) Act, 1987 to include 'deposit of any nature' for the purposes of interpreting s. 269SS.
iii) CIT -Vs- Vegetable Products Ltd. supra It was settled that if the Court finds that the language of a taxing provision is ambiguous or capable of more meaning than one, then the Court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of penalty.
iv) VLS Foods (P) Ltd. -Vs- Addl. CIT supra In this case, the issue is more apposite to the one at hand. In fact, the said decision has already been taken into consideration in the ratios of the decisions rendered in the cases of Bhalotia Engineering Works supra relied on by the Revenue and Rugmini Ram Ragav supra relied on by the assessee. It was so held as under:
"We find that it is an admitted position that in the present case, the impugned amount of Rs. 8.55 lakhs was received by the assessee in cash as share application money. In the case of Rugmini Ram Ragav (supra), the issue before Hon'ble Madras High Court was regarding levy of penalty under s. 271E for cash payments made by the assessee pertaining to refund of share application money. While deciding this issue, it was held by Hon'ble Madras High Court that the money retained by the assessee company was neither deposit nor loan because the same was received towards allotment of shares from sixteen persons. It was also held that the provisions of ss. 269SS and 269T have application only in limited way in respect of deposits or loans and when it is neither deposit nor loan, the provisions of ss. 269SS and 269T have no application at all. As per this judgment of Hon'ble Madras High Court, no penalty can be imposed under s. 271D also because once it is held that the receipt of share application money is neither loan nor deposit, the provisions of ss. 269SS and 271D are, also not applicable because these provisions are applicable only when the assessee receives loan or deposit in cash. The judgment of Hon'ble Jharkhand High Court rendered in the case of Bhalotia Engineering Works (supra) is against the assessee. In this case, it was held by 9 the Hon'ble Jharkhand High Court that share application money received by the assessee is a deposit and hence the provisions of s. 269SS are applicable. Under this factual position, we find that there are two judgments of two different High Courts available on this issue out of which one judgment of Hon'ble Madras High Court is in favour of the assessee whereas the other judgment of Hon'ble Jharkhand High Court is against the assessee. Under these facts, we have to decide as to which judgment should be followed by us. Under this situation, we are guided by Hon'ble Apex Court and as per the judgment in the case of Vegetable Products Ltd. (supra), it was held by Hon'ble Apex Court that if two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted. Respectfully following this judgment of Hon'ble Apex Court, we are of the considered opinion that we are bound to follow the judgment of Hon'ble Madras High Court rendered in the case of Rugmini Ram Ragav (supra) because this judgment is in favour of the assessee and no judgment of Hon'ble Apex Court or of Hon'ble jurisdictional High Court on the issue before us was brought to our notice. It was held by the Hon'ble Madras High Court that receipt of share application money is neither loan nor deposit. Once we hold and accept that receipt of share application money is neither loan nor deposit, the provisions of ss. 269SS and 271D are not applicable because the provisions of s. 269SS are in connection with acceptance of the loan and deposit and the provisions of s. 271D are in connection with violation of s. 269SS. We, therefore, hold that since in the present case, the alleged amount of Rs. 8.55 lakhs was received by the assessee in cash on account of share application money, penalty under s. 271D cannot be levied because the receipt of share application money is neither loan nor deposit and hence the impugned receipt of Rs. 8.55 lakhs is not governed by s. 269SS of the Act."
In light of the facts of this case and the legal position on this issue and in absence of any judgment of Hon'ble Apex Court or of Hon'ble jurisdictional High Court on the issue before us, we are of the considered opinion that the contribution towards share application money received in cash from Sri Abhisek Saraf in the sum of Rs 3 lacs does not come within the scope and ambit of the expression 'deposit' appearing in the provisions of s. 269SS in order to justify the levy penalty u/s. 271D and hence the Ld. CIT(A) was correct in law in deleting penalty u/s. 271D of Rs. 3 lacs in the circumstances of the case and after due deliberation, we are inclined to uphold the same."
We also find that the Coordinate bench in the case ITO Vs. Cookme (Spice) Pvt. Ltd. in ITA Nos. 999/K/2008, 599/K/2009 and 42/K/2010 for A.Y. 2003-04 dated 16.11.2010 has held as under :
"5. After hearing the rival parties , perusing the material available on record, and the case laws cited by the parties, we find that while deleting the penalty the Ld. CIT(A) has dealt the issue as under :10
"I have carefully considered the assessment order submissions made by the appellant and the provisions of section 269SS, 271D, 269T, 271E of the I. T. Act and the different decisions and circulars of CBDT cited above.
I find that the appellant and M/s. Krishna Chandra Dutta (Cookme) Pvt. Ltd. are sister concerns. Mr. Sarbajit Dutta and Mr. Surojit Dutta hold majority shares in both the companies. The appellant maintains a current account with M/s. Krishna Chandra Dutta (Cookme) Pvt. Ltd. It takes advances from said M/s. Krishna Chandra Dutta (Cookme) Pvt. Ltd. time to time for meeting the business needs. The advances received does not bear any interest and also does not contain any stipulation with respect to time for return of such advance. Ahmedabad Bench in the case of ACIT Vs. G.P.Taparia (2004) 84 TTJ (Jd) 34 and Mumbai Bench in the case of Karnataka Ginning & Pressing Factory vs. Jt. CIT (2001) 72 TTJ (Mumbai) 307 have held that the money received or paid in the above circumstances specially between sister concerns are current account transactions and at best can be treated in the nature of advance and not loan or deposit as contemplated in sec.269SS or 269T.
Further the advances received by the appellant were from proper source and there is no doubt the genuineness of the transactions. In such circumstances Judhpur Bench in the case of ACIT v. Alfa Hydromec Pvt. Ltd 99 TTJ 405 (Jd) has held that penalty u/s.271D should not be levied. In view of above, respectfully following the decisions cited above and keeping in mind the intent and purpose of incorporating sec.269SS and sec.269T as explained by CBDT Circular No.387 reported in 152 ITR (St)1, I delete the penalty levied by the A.O. u/s.271D and sec.271E."
In view of the above and in the absence of any contrary material brought on record by the revenue authorities, we do not find any necessity to interfere with the order of the Ld. CIT(A) and the same is hereby upheld. Besides, the Ld. CIT(A) has deleted the penalty by following the decisions of the ITAT, Ahmedabad Bench, Mumbai Bench, Jodhpur Bench and the CBDT Circular also. Therefore, the appeals filed by the revenue are dismissed."
In view of the above, the penalty so sustained by the Ld. CIT(A) u/s. 271D and 271E are hereby deleted.
4. In the result, all the appeals of the assessee are allowed.
5. Order is pronounced in the open court on 21.1.2011 Sd/- Sd/-
सी.डȣ.राव, लेखा सदःय डȣ. के. ×यागी, Ûयायीक सदःय
(C. D. Rao) (D. K. Tyagi)
Accountant Member Judicial Member
तारȣख)
तारȣख) Dated : 21st January, 2011
(तारȣख
11
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - Basil Express Limited, 12A, Amrita Banerjee Lane, Kolkata-26 2 ू×यथȸ/ Respondent, DCIT, C.C.XXII, Kolkata.
3. आयकर किमशनर/The CIT, Kolkata
4. आयकर किमशनर (अपील)/The CIT(A), Kolkata.
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, उप पंजीकार/Deputy Registrar.