SHESHARAM NINAJI CHOUDHARY,PUNE vs. ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE - 3, PUNE

Though the assessee has raised multiple grounds of appeal, the crux of the grievance of the assessee in this appeal is with regard to imposition of penalty of Rs.5,00,000/- u/s.271D of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).

The brief facts in this case are that the assessee is an individual and agriculturist engaged as retailer in the sale of sweets and namkin etc. The assessee has filed return of income for assessment year 2012-13 on 30.03.2013 declaring total income of Rs.4,24,716/-. The case was selected for scrutiny. During the course of assessment proceedings, the Assessing Officer, Pune called for the details of unsecured loans accepted during the year. The Assessing Officer also called for the confirmation of balance outstanding in the name of various creditors. After verification of the submissions filed by the assessee, it was revealed that the assessee had accepted Rs.5,00,000/- in cash from C.B Oswal and repaid the said amount by cheque. The assessee in his submissions placed on record has stated that the said amount of Rs.5,00,000/- was not a loan or deposit but it was an advance against sale of land. The assessee had further submitted that the advance was against sale of land at Karjat which did not materialize and therefore, the advance of Rs.5,00,000/- was repaid to C.B Oswal by cheque. In this regard, the assessee has also enclosed the confirmation letter from C.B Oswal.

The Revenue, on the other hand, was of the view that since the assessee could not produce the receipt given to C.B Oswal acknowledging the advance amount or that there was no written document regarding sale of land at Karjat to C.B Oswal, therefore, the said amount of Rs.5,00,000/- was accepted by the assessee in cash as loan and hence, there was violation of provision of Section 269SS of the Act. Thus, penalty of Rs.5,00,000/- was imposed on the assessee u/s.271D of the Act.

The Ld. CIT(Appeal) while upholding the findings of the Assessing Officer observed that no documentary evidences were furnished by the assessee substantiating that the amount of Rs.5,00,000/- received by the assessee in cash and repaid by cheque was only an advance and not loan or deposit. The Ld. CIT(Appeals) even suspected or disbelieved the written confirmation filed by the assessee which was issued by C.B Oswal regarding entire transaction.

We have perused the case records and heard the rival contentions. That from the orders of the sub ordinate Authorities, it is crystal clear that though on one hand, they disbelieved the evidences placed on record specifically confirmation letter of C.B Oswal, however, they themselves have not conducted any specific enquiry or examination with regard to the facts of the case. The entire addition has been made on the premises of guess work and suspicion. It is the contention of the assessee that some land sale transactions were to be made with C.B Oswal, for which, the advance amount was paid in cash to the assessee. That however, when this transaction did not materialize, the assessee refunded the said amount of Rs.5,00,000/- in cheque back to C.B Oswal. These facts were never enquired or examined or verified by the Department. Section 269SS refers to the loan or deposit received in cash and since it was an advance taken, the amount, therefore

In the result, appeal of the assessee is allowed.

The CIT(Appeal), Pune-3. 4. The Pr. CIT-2, Pune. , आयकर अऩीऱीय अधधकरण, “बी” बेंच, 5. ववभागीय प्रतततनधध ऩुणे / DR, ITAT, “B” Bench, Pune. गार्ड फ़ाइऱ / Guard File. 6. आदेशानुसार / BY ORDER, //// तनजी सधचव / Private Secretary आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune.