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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
Appellant by Shri Ashish Goyal & Shri N.D. Patwa, A.Rs Respondent by Shri V.J. Boricha, D.R. Date of Hearing: 06.08.2019 Date of Pronouncement: 07.08.2019 आदेश / O R D E R PER KUL BHARAT, J.M: These two appeals by the assessee pertaining to the assessment years 2011-012 & 2012-13 against consolidated order of the Ld. CIT(A)-1, Bhopal dated
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] 20.9.2017 whereby the Ld. CIT has confirmed levy of penalty u/s 271E & 271D of the Income Tax Act, 1961 (hereinafter called as ‘the Act’). First we take up the assessee’s appeal in ITA No.835/Ind/2017. The assessee has raised following grounds of appeals:-
1. That on the facts and in the circumstances of the case and in law, the findings of learned A.O. are bad and opposed to facts, equity and law and are, therefore, unsustainable law.
2. That on the facts and in the circumstances of the case and in law, the learned A.O. erred in making a scrutiny assessment u/s 143(3) of the Act and wrongly assumed loans and advance of Rs.10.00 lacs from L.N. Gupta, without reason and open the case u/s 148 of the Act. 3. That on the facts and in the circumstances of the case and in law, the learned A.O. erred in imposing penalty of section 271D of Rs.10.00 lacs without appropriate reasons and justification. 4. Because the Ld. Commissioner IT (Appeals) has dismissed the appeal of assessee and confirmed the additions of Rs.10,00,000.00 lacs as cash deposits without appropriate opportunity of hearing. 5. The appellant craves leave to add/alter any of the grounds of appeal
before or at the time of hearing.
2. Briefly stated facts are that a search & seizure operation was carried out at the residential premises of Gupta sons group of cases u/s 132(1) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) on 28.10.2010. During the course of search at residential premises of Shri
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] L.N. Gupta at E-1/55, Arera Colony, Bhopal, loose papers LPS pages 82 and 83 were found and seized. It was observed by the A.O. that as per the documents so seized, the assessee had taken unsecured loan of Rs.10 lakhs from Shri Anil Gupta in cash on 24.10.2010. Further, the assessee deposited a security cheque dated 24.4.2011 of Andhra Bank with Shri Anil Gupta. The loan was to be repaid on 24.4.2011. The case of the assessee was reopened after recording the reasons. During the course of assessment, the assessee was asked to explain the taking of loan and repayment of the same. The A.O. after considering the submissions, came to the conclusion that the assessee had received an unsecured loan of Rs.10 lakhs from Shri Anil Gupta during the financial year 2010- 11 in violation of provision of section 269SS of the Act. Therefore, a notice u/s 271D of the Act was issued and after considering the submissions, the A.O. levied penalty u/s 271D of the Act of Rs.10 lakhs.
Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A), who after considering the submissions sustained the penalty. Before us, Ld. Counsel for the [ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] assessee reiterated the submissions as made in the written submissions which are reproduced as under:
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal]
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal]
Ld. D.R. opposed these submissions and supported the order of the authorities below. Ld. D.R. relied on the provisions of section 271D of the Act and submitted that there is no ambiguity either on facts or on law. Therefore, the A.O. was justified in imposing the penalty.
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. During the course of hearing, Ld. Counsel for the assessee fairly conceded that the assessee has not challenged the addition of this amount. Therefore, the factum of obtaining loan is proved. Considering the rival submissions and the facts available on record, the assessee could not controvert the finding of the authorities below in respect of the evidences gathered during the search which proves receipt of loan in cash, therefore, we do not see any reason to interfere in the finding of the authorities below. The grounds raised in this appeal are [ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] dismissed. Appeal of the assessee in is dismissed.
Now coming to ITA No.836/Ind/2017. The assessee has raised following grounds of appeal:
1. That on the facts and in the circumstances of the case and in law, the findings of learned A.O. are bad and opposed to facts, equity and law and are, therefore, unsustainable law.
That on the facts and in the circumstances of the case and in law, the learned A.O. erred in making a scrutiny assessment u/s 143(3) of the Act and wrongly assumed loans and advance of Rs.10.00 lacs from L.N. Gupta, without reason and open the case u/s 148 of the Act. 3. That on the facts and in the circumstances of the case and in law, the learned A.O. erred in imposing penalty of section 271E of Rs.10.00 lacs without appropriate reasons and justification. 4. Because the Ld. Commissioner IT (Appeals)-I has dismissed the appeal of assessee and confirmed the additions of Rs.10,00,000.00 lacs as cash deposits without appropriate opportunity of hearing. 5. The appellant craves leave to add/alter any of the grounds of appeal before or at the time of hearing.
The facts are identical as were in except that in the present case it is inferred that the repayment of loan was made in cash.
Before the A.O., it was submitted by the assessee that there is no evidence suggesting that the loan was repaid in 7
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] cash. However, the A.O. did not accept the contention of the assessee and proceeded to impose penalty u/s 271E of the Act. The assessee preferred an appeal before Ld. CIT(A), who sustained the imposition of penalty. Ld. Counsel for the assessee submitted that the penalty has been levied purely on the guess work. He relied on the provisions of section 271E of the Act and also the provisions of section 269T. He submitted that the penalty can be levied only in the event where the assessee has repaid the loan in cash. It is not the case where the authorities below have found any evidence of making repayment of loan in cash. Ld. D.R. opposed the submissions and supported the orders of the authorities below.
We have heard the rival submissions, perused the materials available on record and gone through the orders
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] of the authorities below. We find that the Ld. CIT(A) has decided the issue in paras 4, 5 & 6 of her order as under:
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal]
We find merit into the contention of Ld. A.R. that there is nothing on record suggesting that the loan amount was repaid in cash by the assessee. The revenue has considered the terms of loan as if the same has been repaid in cash. There is no receipt by the person who has given loan to the assessee accepting or acknowledging the repayment of the loan in cash by the assessee. Even in the statement recorded by the revenue authorities, nothing of this sort is stated by Shri L.N. Gupta, father of Shri Anil
[ITA Nos.835 & 836/Ind/2017] [Shri Tejinder Singh, Bhopal] Gupta. Therefore, under the facts of the present case and in the absence of the proof that assessee had made repayment of loan in cash, in our considered view, imposition of penalty u/s 271E would not be justified. The A.O. ought to have brought some material suggesting that the assessee has made repayment of loan in cash, therefore, we hereby direct the A.O. to delete the penalty.
Therefore, the appeal of the assessee in is allowed.
In the result, the appeal of the assessee in is dismissed and the appeal of the assessee in ITA No.836/Ind/2017 is allowed.
Order was pronounced in the open court on 07 .08.2019.