Punjab-Haryana High Court
Commissioner Of Income-Tax vs Kharaiti Lal And Co. on 18 March, 2004
Equivalent citations: [2004]270ITR445(P&H)
Author: N.K. Sud
Bench: N.K. Sud, Hemant Gupta
JUDGMENT N.K. Sud, J.
1. The Revenue has filed this appeal under Section 260A of the Income-tax Act, 1961 (for short "the Act"), against the order of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (for short "the Tribunal"), dated June 30, 2003, allowing the appeal of the assessee and cancelling penalty of Rs. 4,24,930 levied by the Assessing Officer under Section 271D of the Act.
2. The sole question for determination before the Tribunal was as to whether the amount of Rs. 6,49,344 advanced by M/s. Daljit Singh and Bros. to the assessee was an advance for purchase of truck or was a loan or deposit. The Assessing Officer had levied the penalty by considering this amount as a loan or deposit. He discarded the explanation of the assessee that the amount was an advance for purchase of truck on the ground that no agreement had been executed while advancing the amount and the same had been executed after the return had been filed. The Tribunal, on the other hand, accepted the explanation of the assessee on the basis of the evidence on record. The findings of the Tribunal are contained in para. 7 of its order, which is reproduced here-under for the sake of convenience :
"7. We have heard learned representative of both the parties at length and have carefully gone through the material available on record. In the instant case it is noticed that the assessee received a sum of Rs. 6,49,348 from M/s. Daljit Singh and Bros., Amritsar, it was the claim of the assessee that the aforesaid amount has been received as an advance against the sale of truck No. PB02N9594. The question before us is as to whether the amount received by the assessee was an advance for the loan. On perusing the copy of account of the assessee in the books of M/s. Daljit Singh and Bros. (copy available and page No. 11 of the assessee's paper book) it would be clear that out of the amount of Rs. 6,49,344, the payer, i.e., M/s. Daljit Singh and Bros., had given D.D. on account of instalments for truck on April 8, 1997, April 23, 1997, August 2, 1997, August 18, 1997, December 31, 1997 and December 16, 1997, a sum of Rs. 50,000, Rs. 50,473, Rs. 24,951, Rs. 24,200, Rs. 49,200 and Rs. 24,900, respectively. The aforesaid amount totalling to Rs. 2,24,424 had not been treated by the Assessing Officer as a deposit/loan while imposing the penalty under Section 271D of the Act, since those amounts had been paid by way of drafts/ of course, to the financier, M/s. Tata Finance Ltd., on behalf of the assessee. The remaining amount of Rs. 4,24,930 has been considered as a loan, the aforesaid amount included Rs. 8,800 and Rs. 1 lakh paid on account of cabin body on May 21, 1997, and May 23, 1997. Another amount of Rs, 300 has been paid on May 6, 1997, for R. C, which shows that M/s. Daljit Singh and Bros., had made the payments either to M/s. Tata Finance Ltd., or to any persons making the cabin body and R. C. also as a loan in violation of Section 269SS of the Act. It is true that the advance and the deposit/loans are separate terms. We are of the view that for an advance the payer always takes something in lieu of the amount paid while in the case of deposit/loan the amount is returned by the payee to the depositor along with interest if any. In the instant case it is not the case of the Department that any interest was paid by the assessee to M/s. Daljit Singh and Bros., or the amount received has been repaid. On the contrary, the amount was adjusted against the value of the truck. This fact has also not been denied by the Department one of the objections of the Commissioner of Income-tax (Appeals) in not treating the amount, in question, as advance was that there was a gap of four years in between the oral agreement and the actual date of transfer. However, the learned Commissioner of Income-tax (Appeals) had not doubted that there was actual transfer of the truck. The Assessing Officer also objected that the affidavit had been accepted on April 1, 1999, i.e., after the expiry of the assessment year and after the return being filed on January 29, 1999. He, therefore, held that it was a cover up story. However, it is noticed that notice under Section 271D on the Act, had been issued by the Assessing Officer to the assessee on February 23, 2001, i.e., much after the affidavits were executed by both the parties, i.e., the asses-see and the purchaser of the truck, namely, M/s. Daljit Singh and Bros. We, therefore, are of the view that the Assessing Officer was not justified in observing that it was a cover up story of the assessee. In the instant case it is not in dispute that the truck has been transferred by the assessee to M/s. Daljit Singh and Bros. as per the oral agreement between the parties. This claim has been made by the assessee before the Assessing Officer as well as before the Commissioner of Income-tax (Appeals). It is true that as far as the oral agreement is concerned, the existence of such claim agreement has to be inferred from the circumstantial evidence as well as the conduct of the party. In the instant case it is noticed that the amount received by the assessee from M/s. Daljit Singh and Bros. has been utilised partly from making the payment of the financier, M/s. Tata Finance Ltd., and certain amount has been utilised for making cabin body. From the circumstantial evidence, it would be clear that the amount received was in the shape of advance and not in the form of loan or deposit. The provisions of Section 269SS are applicable to the loan. It is also well settled that there is no bar in taking the advances much before the execution of the contract/agreement. The only requirement to consider the amount as an advance is that the amount should be adjusted against the sale consideration. Since in the instant case, the amount has been utilised by the assessee for making the payment of the instalments against the loan received from M/s. Tata Finance Ltd. and also for making the cabin body, which proves that the amount received by the assessee was related to the transaction involving the sale of the truck. Furthermore, both the parties furnished the affidavit dated April 1, 1999, has not been rebutted by the Assessing Officer by bringing out any material on record. It seems that the authorities below have not correctly appreciated the true nature of the transaction between the assessee and M/s. Daljit Singh and Bros. as well as M/s. Tata Finance Ltd. In our view, the amount received by the assessee was in the form of advance and not a loan as alleged by the Department. Therefore, the provisions of sections 269SS are not applicable to the facts of the present case. In that view of the matter, no penalty under Section 271D is leviable to the facts of the instant case. Accordingly, we delete the penalty imposed by the Assessing Officer and sustained by the Commissioner of Income-tax (Appeals)."
A bare perusal of the above shows that the findings recorded by the Tribunal are pure findings of fact based on appraisal of evidence on record. The Tribunal has taken a possible view which has not been shown to be perverse in any manner. We are, therefore, satisfied that no substantial question of law arises out of the order of the Tribunal for consideration by this court. It is well settled law that this court cannot reappraise the evidence and substitute its own findings for the findings of the Tribunal.
3. Accordingly, the appeal is dismissed in limine.