Income Tax Appellate Tribunal - Kolkata
Ellora Mercantile Pvt Ltd., Kolkata vs Department Of Income Tax on 18 April, 2013
आयकर अपीलीय अधीकरण, Ûयायपीठ - " ए ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "A", KOLKATA
[(सम¢) ौी के.के.गुƯा,
ा, लेखा सदःय, एवं ौी महावीर िसंह, Ûयायीक सदःय]]
[Before Hon'ble Sri K.K.Gupta, AM & Hon'ble Sri Mahavir Singh, JM]
आयकर अपील संÉया /ITA No.1664/Kol/2012
िनधॉरण वषॅ/Assessment Year : 2007-08
(अपीलाथȸ/APPELLANT ) -वनाम- (ू×यथȸ/RESPONDENT)
Jt.C.I.T., Range-1, . M/s. Ellora Mercantile Pvt. Ltd.
Kolkata -versus- Kolkata
(PAN: AAACE 6028 K)
अपीलाथȸ कȧ ओर से/ For the Appellant Shri Dilip Kr.Rakshit,
Sr.DR
ू×यथȸ कȧ ओर से/For the Respondent None
सुनवाई कȧ तारȣख/Date of Hearing : 18.04.2013
घोषणा कȧ तारȣख/Date of Pronouncement : 18.04.2013.
आदे श/ORDER
Per Shri K.K.Gupta, AM
The Revenue is in appeal raising the sole ground which reads as under :-
"1. That on the facts and in the circumstances of the case the ld. CIT(A) was not justified in deleting the penalty of Rs.10,80,000/- imposed u/s 271D of the IT Act for violating the provisions of Section 269SS."
2. The ld. DR initiating his arguments submitted the brief facts that "In the instant case penalty order u/s 271 D was passed on 30.4.2010 imposing a penalty of Rs.10,80,000/- for accepting the share application money in cash in violation of section 269SS.
Ld.CIT(A)-1, Kolkata has allowed the assessee appeal vide order dated 06.08.2012 relying on the judgement of Hon'ble ITAT, Kolkata in the case of Basil Exports Ltd. Facts of the instant case is as under :-
Assessee company has received share application money from Balashri Commercial Ltd. (Formerly Balram Commercial Enterprises Ltd.) for 22,000 equity shares by paying in cash as under :-
Date Amount
ITA No.1664Kol/2012 2
05.10.06 6,00,000./-
14.10.06 2,00,000/-
31.01.07 3,00,000/-
Total 11,00,000/-
No shares was allotted by the assessee company against above mentioned share application money received. As such Rs.10,80,000/- was imposed as penalty u/s 271D accepting the deposit in the form of share application money above specified limit as prescribed in section 269SS.
Mute question involved in the present case is whether share application money received in cash comes under the definition of deposit/loan within the meaning of provison of section 269SS.
Hon'ble Jharkhand High Court in the case of Bhalotia Engineering Works Pvt. Ltd. [275ITR 399] has observed that share application money partakes of the character of deposit within the meaning of section 269SS 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 contract.
From the above it is evident that share application money partakes the character of deposit within the meaning of section 269SS till the shares are allotted. In the instant case, assessee company has received share application money in cash above specified limit but did not allot shares during the year. It means that share application money was kept by the assessee company as deposit on behalf of the subscriber. Hence considering the facts of the present case and relying on the judgement of Hon'ble Jharkhand High Court (Supra), share application money received during the year in cash above the specified limit is a deposit within the meaning of section 269SS."
3. The ld. Counsel for the assessee respondent perused the order of the ld. CIT(A) who has elaborately considered the case of the assessee appellant and noted the following :-
"After careful consideration of the penalty order u/s 271D for violation of section 269SS and the written submissions filed by the appellant, it is noticed that assessee had received share application money of Rs.11 lakh in cash. The Addl.CIT, R-1 had levied a penalty u/s 271D by relying on Jharahand High Court Judgement reported in 275 ITR 399. Assessee had placed reliance on ITAT, Kolkta Bench decision dt.21.0`1.2011. in the case of Basil Exports Ltd. to support its claim that share application money cannot be treated as 'deposit' appearing in the provisions of section 269SS and accordingly penalty u/s 271D is not applicable. Keeping in view these facts and circumstances, penalty levied u/s 271D is deleted."
4. We have heard the ld. DR and carefully perused the material available on record. On careful perusal of the orders of the authorities below we do find that the facts as brought on record by the AO did not require the visit of penalty provision u/s 271D of the Act as being dealt with by the ld. CIT(A) in an elaborate manner, in so far as, share application money cannot be treated as deposit for invoking the provision of ITA No.1664Kol/2012 3 section 269SS of the IT Act. In this view of the matter we dismiss the appeal filed by the revenue.
5. In the result the appeal of the revenue is dismissed.
Order pronounced in the open court on 18.04.2013.
Sd/- Sd/-
[ौी.महावीर िसंह, Ûयायीक सदःय ] [ौी के.के.गुƯा,, लेखा सदःय]
[Mahavir Singh ] [K.K.Gupta]
Judicial Member Accountant Member
(तारȣख)
तारȣख)Date: 18.04.2013.
R.G.(.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. M/s. Ellora Mercantile Pv.t Ltd., 1B, Black Burn Lane, 4th floor, Kolkata-700012.
2 Jt.C.I.T., Range-1, Kolkata.
3. CIT Kolkata 4. CIT(A)-I, Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
स×याǒपत ूित/True Copy, आदे शानुसार/ By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches