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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: SHRI RAMESH C SHARMAvk;dj vihy la-@ITA No. 01/JP/2018
ORDER PER: R.C. SHARMA, A.M. This is an appeal filed by the assessee against the order of ld.CIT(A), Ajmer dated 04/10/2017 for the A.Y. 2013-14 in the matter of imposition of penalty U/s 271D of the Income Tax Act, 1961 (in short, the Act), wherein the assessee has raised following grounds of appeal: “1. The impugned penalty order U/s 271D of the Act dated 18/06/2016 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.
2. Rs. 1,11,620/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the penalty u/s 271D of the Act of Rs.
2 ITA 01/JP/2018 Subhash Chand Nyati Vs Addl.CIT 1,11,620/-. The penalty so imposed by the A.O. and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts kindly be deleted in full.
3. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”
Rival contentions have been heard and record perused. In this case, penalty was levied U/s 271D of the Act by observing that the assessee has taken cash loan of Rs. 1,11,620/- from M/s Ram Bilas Shiv Kumar, Ajmer. By the impugned order, the ld. CIT(A) confirmed the penalty so imposed, against which the assessee is in further appeal before the ITAT.
I have heard the rival contentions and carefully gone through the orders of the authorities below. From the record, I found that there are two partners in M/s Rambilas Shiv Kumar Kumar viz Om Prakash Nyati and Ram Bilas Nyati. The assessee Subhash Chand Nyati is brother of Om Prakash Nyati and son of Ram Bilas Nyati. That the family is a joint family and both brothers and father are living together. That family's household expenses incurred are debited equally to assessee, assessee's brother Om Prakashji Nyati and assessee's father Shri Rambilasji Nyati in the books of M/s Rambilas Shiv Kumar.
3 ITA 01/JP/2018 Subhash Chand Nyati Vs Addl.CIT 4. In the penalty order, the A.O. observed that the assessee has taken loan of Rs. 1,11,620/- on different dates in cash details given below:- Date Amount Description of amount 31500/- 17/07/2012 Household Expenses 03/10/2012 24504/- Household Expenses 02/11/2012 10000/- Paid to Post Office for purchase of NSC 11/12/2012 27500/- Household Expenses 30/03/2013 18116/- Household Expenses 5. With respect to the above payments, I observe that the assessee has not taken loan in cash. Actually joint family expenses have been incurred and paid from M/s Rambilas Shiv Kumar (Sister Concern) and debited equally (i.e. 1/3 to each) to Rambilas Nyati (father), Om Prakash Nyati (brother) and Subhash Chand Nyati(assessee) and he has not taken any cash 'rom the firm except Rs. 10000/- which was too paid directly to Post Office on assessee's behalf for purchase of NSC. Copy of cash book of M/s Rambilas Shivkumar was also filed to show that household expenses have been equally debited to Rambilas Nyati (father), Om Prakash Nyati (brother) and Subhash Chand Nyati (assessee).
I also found that the copy of cash book of the relevant dates was also filed before the lower authorities indicating that it was only towards
4 ITA 01/JP/2018 Subhash Chand Nyati Vs Addl.CIT household expenses. Since the assessee is a small trader and not maintaining journal, he has entered the transaction in cash book. The entry is in both side of cash book which means assessee has not received cash. Household expenses incurred and paid from firm have been debited to assessee's a/c and accordingly journal entry has been passed in cash book crediting the A/c of firm M/s Rambilas Shiv Kumar (Sister concern) and debiting the capital a/c of Subash Chand Nyati in which narration is given as "credited to M/s Rambilas Shivkumar and debited to household expenses as such no 'money' passed from firm to the assessee.
The Coordinate Bench of ITAT Ahemdabad in the case of ACTT vs Gujarat Ambuja Proteins Ltd. (89 TTJ 324) has held that where account of sister concern was credited by the assessee by journal entries on account of payment made by sister concern on behalf of the assessee, there was no violation of the provisions of Section 269SS of the Act. Moreover, the transaction between the assessee and sister concern M/s Ram Bilas Shiv Kumar was current account in nature and was not a loan or deposit and hence there is no violation of section 269SS as held by the Hon'ble High Court of Madras in the case of CIT vs ldhayam Publication Ltd. (285 1TR 221) Copy of 5 ITA 01/JP/2018 Subhash Chand Nyati Vs Addl.CIT account of the assessee in the books of sister concern M/s Rambilas Shivkumar clear indicate that it is a current account and as such provisions of Section 269SS/ 271D are not applicable.
In view of the above, I do not find any justification in the penalty imposed U/s 271D of the Act. The A.O. is directed to delete the same.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on 20th June, 2019.
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