Madhya Pradesh High Court
Commissioner Of Income-Tax vs Makhija Construction Co. on 14 March, 2002
Equivalent citations: [2002]257ITR8(MP)
Author: Deepak Verma
Bench: Deepak Verma
JUDGMENT
1. Heard Shri R.L. Jain, learned counsel for the appellant on the question of admission.
2.The Revenue has filed this appeal under Section 260A of the Income-tax Act, 1961, against the order of the Income-tax Appellate Tribunal, Indore, dated August 22, 2001, whereby the appeal of the Revenue has been rejected. The brief facts material for deciding the said case, are mentioned hereinbelow.
3. The respondent-assessee-firm raised loans from six parties amounting to Rs. 2,15,000. These loans were not through account-payee cheques but were only through crossed cheques. Penalty proceedings were initiated by the Deputy Commissioner of Income-tax, Indore. In response to the show-cause notice issued to the assessee, it was submitted by it that the six creditors were members of the same family. The family had two partnership firms, known as Gujarat Construction Company and the assessee, Makhija Construction Company, in which different family members were partners.
4. On consideration of the submissions so advanced the Deputy Commissioner imposed a penalty of Rs. 2,15,000 on the assessee. The assessee being aggrieved by the said penalty preferred an appeal before the Commissioner of Income-tax (Appeals). The appellate authority recorded a finding that there was only a minor deviation as instead of paying the amounts by crossed account-payee cheques, the same were paid only by crossed cheques. Thus, the penalty imposed by the Deputy Commissioner of Income-tax was quashed. Feeling aggrieved by the said order, the Revenue preferred an appeal before the Tribunal. The Tribunal has rejected the appeal of the Revenue mainly on the ground that cheques were crossed and were deposited in the account of the assessee-firm through banking channel. Consequently and in the result, the provisions of Section 269SS of the Act could not be attracted. A further finding has been recorded that the bank has also issued a certificate in this regard that all the amounts of six creditors have been shown in the account of Makhija Construction Company, i.e., the assessee. The bank has further mentioned that all the six transactions in question were as per the banking norms and there was no flaw in the transactions, whereby the aforesaid amount of Rs. 2,15,000 was transferred in the account of the assessee. The Tribunal has come to the conclusion that for such minor deviation, no penalty could have been imposed on the assessee as otherwise the transaction appears to be genuine, proper and bona fide.
5. In view of the aforesaid finding recorded by the Tribunal, we find that there is no merit and substance in this appeal. It does not involve any substantial question of law and the appeal hereby fails and is dismissed.