Income Tax Appellate Tribunal - Ahmedabad
Bhupendrasingh Hakamsingh Luhar, ... vs Department Of Income Tax on 30 November, 2015
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'बी' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, AHMEDABAD
BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER
AND SHRI S.S. GODARA, JUDICIAL MEMBER
आयकर अपील सं./ ITA No. 2016/Ahd/2012
नधा रण वष /Assessment Year: 2008-09
The I.T.O., Shri Luhar Bhupendrasingh
Ward-1, Vs Hakamsingh,
Mehsana Prop. Bhupendra House
Crane Services, Opp. ONGC
Nagar, Highway, Mehsana
PAN : AATPL 0486 F
अपीलाथ / (Appellant) यथ / (Respondent)
Revenue by : Shri Nagendra Singh, Sr DR
Assessee(s) by : Shri S.N. Divatia, AR
सन
ु वाई क तार ख/Date of Hearing : 19/11/2015
घोषणा क तार ख /Date of Pronouncement: 30/11/2015
आदे श/O R D E R
PER ANIL CHATURVEDI, ACCOUNTANT MEMBER:
This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals), Gandhinagar, Ahmedabad dated 01.06.2012 for Assessment Year 2008-09.
2. The brief facts of the case, as culled out from the records, are as under:-
3. The assessee is an individual stated to be deriving income from crane hiring services/JCB Machines to various parties. During the course assessment proceedings, the Assessing Officer noticed that the assessee had accepted cash loan above Rs.20,000/- on various dates during financial year 2007-08, aggregating to Rs.57,50,000/- from M/s. New Bhupendra House ITA No. 2016 /Ahd/2012 ITO vs. Shri Luhar Bhupendrasingh Hakamsingh For AY 2008-09 -2- Crane Service - its sister-concern which was in violation of provisions of Section 269SS of the Act. The DCIT accordingly made a reference to the Addl. CIT for levy of penalty u/s 271D of the Act in view of the violation of provisions to Section 269SS of the Act.. Accordingly, Addl. CIT vide order dated 15.04.2011 passed u/s. 271D of the Act held that the assessee had committed default without any reasonable cause u/s 269SS of the Act and had accepted loan of Rs.55,75,000/-. He accordingly levied penalty of Rs.55,75,000/- u/s 271D of the Act. Aggrieved by the order of the Addl. CIT, the assessee carried the matter in appeal before the ld. CIT(A) who vide order dated 01.06.2012 deleted the penalty by holding as under:-
"5. I have considered the facts of the case, the penalty order, the submissions made by the appellant before the Addl. CIT and arguments against imposition of penalty filed as grounds of appeal reproduced in para. 4, earlier in this order. I had also called for the cash book of the assessee alongwlth other books of accounts during the course of appellate proceedings.
The assessee has accepted loan of Rs. 55.75 lakh from New Bhupendra House Crane Service in cash and the same is also reflected in the books of account of the assessee. New Bhupendra House Crane Service is sister concern & proprietary concern of Upkersingh B. Lunar (son of Bhupendraslngh H. Lunar). The appellant has pleaded that he is taking service from his son of hiring of Cranes & Trailers for his business. When money was needed in emergency for the business need; they had taken money in cash from the sister concern and had paid back in short time without any Interest having bonafide belief that this is not a transaction of loans or deposit but it is in nature of current a/c cum creditors a/c.
The appellant has further pleaded that he was having belief that such account is not a loan or deposit account and relied upon the decision of Hon'ble Madras High Court in the case of Idhyam Publications Limited (2006) 285 ITR 221(Mad).
I have found from the cash book that whenever the cash amounts were taken from his son's concern, these were many a times on the same day or the very next day utilized for making business payments. The Instances where the cash has been utilized for business on the very day include taking of credit and utilization of cash on 9/5/2007, 11/5/2007, 16/5/2007, 18/5/2007, 28/5/2007, 31/5/2007, 4/6/2007, 9/6/2007, 11/6/2007 etc. These instances support the assessee's stand that the cash was taken in case of emergency of ITA No. 2016 /Ahd/2012 ITO vs. Shri Luhar Bhupendrasingh Hakamsingh For AY 2008-09 -3- business purpose. I agree with the appellant that the instances where the cash has not been utilized on the same day does not prove the contrary because the cash may have been taken expecting payments on some days which may not have actually materialized. In general, it can be said that the appellant has been able to prove that the cash was taken for meeting emergent business expenses like Salary & Wages, Repairs and Maintenance etc. I agree with the appellant that its case is squarely covered by the decision of Hon'ble Punjab & Haryana High Court in the case of CIT v/s. Sunilkumar Goel (2009) 315 I.T.R. 163. The gist of the decision is as under:
"A family transaction between two independent assessees based on an act of casualness, especially in a case where disclosure thereof is contained in compilation of accounts and which has no tax effect, establishes 'reasonable cause' under section 273B- Assessing Officer imposed penalty under sections 271D and 271E upon assessee for accepting or returning cash loans in violation of provisions of sections 269SS and 269T - On appeal, Tribunal, taking note of facts that cash transactions of assessee were with sister concern and due to business exigency; that assessee had produced his cash books depleting loans taken by him unilaterally before revenue; and that no prejudice was caused to revenue inasmuch as assessee did not attempt by impugned act to avoid any tax liability, held that assessee had shown reasonable cause for not abiding by provisions of sections 269SS and 269T - It, therefore, deleted penalty imposed upon assessee
- Whether on facts, Tribunal had taken correct decision - Held, yes"
In this case also, the transactions are between two independent related assessees, in fact father and son. Not only are the transactions depicted in the account books, in fact, the repayment of amounts is through cheques which further proves the bonafides of the assessee. The amount was taken due to business exigency; the assesses has produced his cash books depicting bans taken by him unilaterally before revenue; and that no prejudice was caused to revenue inasmuch as assessee did not attempt by impugned act to avoid any tax liability. Therefore, following the above referred Judgment of the Hon'ble Punjab & Haryana High Court, it is held that there was a reasonable cause with the assessee for not abiding by provisions of section 269SS. Reliance is also placed on the decision of Hon'ble ITAT, Ahmedabad in the case of Shreenath Builders 66 TTJ H3, wherein the penalty was held to be not imposable on similar facts where amounts in cash were taken during regular course of business and the transactions were held bonafide and genuine. The Hon'ble jurisdictional ITAT had cancelled the penalty saying that a technical breach where the ITA No. 2016 /Ahd/2012 ITO vs. Shri Luhar Bhupendrasingh Hakamsingh For AY 2008-09 -4- breach follows a bonafide belief does not lead to imposition of penalty. In the present case also there is no allegation even of the transactions being not genuine. Therefore, the penalty imposed is directed to be cancelled on the grounds of existence of reasonable cause and bonafide belief.
4. Aggrieved by the order of the ld. CIT(A), the Revenue is now in appeal and has raised the following grounds:-
"1. The learned CIT (Appeals) has erred in law and on facts deleting the penalty imposed u/s 271D amounting to Rs.55,75,000/- made by the AO.
2. On the facts and circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer."
5. Before us, the ld. Departmental Representative took us through the penalty order of the Addl. CIT & supported his order. On the other hand, ld. Authorized Representative reiterated the submissions made before the Addl. CIT and CIT(A); and further placed reliance on the decision rendered by the Hon'ble Gujarat High Court in the case of CIT vs. Maa Khodiyar Construction, reported in (2014) 365 ITR 474 (Guj.) and in the case of CIT vs. Shree Ambica Flour Mills Corporation, reported in (2008) 6 DTR 169. He also placed on record the copies of above stated decisions. He, thus, supported the order of ld. CIT(A).
6. We have heard the rival submissions and perused the material placed on record. The issue in the present case is with regard to levy of penalty u/s 271D of the Act. It is an undisputed fact that during the year the assessee had taken money aggregating to Rs. 55.75 lacs in cash from the proprietary concern of his son. It is also a fact that the amounts were repaid by cheques and were reflected in the books of assessee. We find that ld. CIT(A), while deleting the penalty, has given a finding that the assessee has been able to prove that the cash was taken for meeting business exigency, the transactions were between two independent related assessees, the ITA No. 2016 /Ahd/2012 ITO vs. Shri Luhar Bhupendrasingh Hakamsingh For AY 2008-09 -5- repayment of amounts were made through cheques which also proved the bona fides of the assessee; and that there were no allegations about the transactions being not genuine which leads to the conclusion of existence of reasonable cause and bona fide belief on the part of the assessee. We further find that the Hon'ble Gujarat High Court in the case of CIT vs. Maa Khodiyar Construction (supra) has concluded that the penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or act in conscious disregard to its obligation. Before us, the Revenue has not pointed out any fallacy in the finding of the ld. CIT(A) nor has placed on record any contrary binding decision in its support. In view of the aforesaid facts, we find no reason to interfere with the order of the CIT(A) and therefore the ground of the Revenue is dismissed.
7. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on 30th November, 2015 at Ahmedabad.
Sd/- Sd/-
(S.S. GODARA) (ANIL CHATURVEDI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 30/11/2015
*Biju T, PS
आदे श क त!ल"प अ#े"षत/Copy of the Order forwarded to :
1.
अपीलाथ / The Appellant
2.
यथ / The Respondent.
3.
संब"ं धत आयकर आय#
ु त / Concerned CIT
4.
आयकर आय#
ु त(अपील) / The CIT(A)
5.
&वभागीय त न"ध, आयकर अपील य अ"धकरण, अहमदाबाद / DR, ITAT,
Ahmedabad
6.
गाड फाईल / Guard file.
आदे शानस
ु ार/ BY ORDER,
//TRUE COPY//
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील
य अ धकरण, अहमदाबाद / ITAT, Ahmedabad