SHRI RAMESHWAR PRASAD GUPTA HOSPITAL & NEUROLOGY CENTRE PVT. LTD.,KOTA vs. ADDITIONAL COMMISSIONER OF INCOME TAX, KOTA

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ITA 32/JPR/2018Status: DisposedITAT Jaipur25 September 2018AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the payment was not a repayment of loan or deposit but was towards remuneration and rent payable to the director. Therefore, Section 269T was not attracted, and no penalty under Section 271E was leviable.

What were the facts?

The assessee company repaid a sum of Rs. 1,00,000/- in cash to its director, Dr. Rameshwar Prasad Gupta. The Assessing Officer referred the case for penalty under Section 271E for violating Section 269T.

What were the issues?

Whether the cash payment made by the assessee to its director constituted a repayment of loan/deposit attracting Section 269T and consequently penalty under Section 271E.

Which sections of the Income-tax Act were involved?

Section 271E,Section 269T

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 32/JP/2018

For Appellant: Shri B.V. Maheshwari (C.A.) jktLo dh vksj ls@
Hearing: 19/09/2018Pronounced: 25/09/2018

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 32/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke Shri Rameshwar Prasad Gupta, The ACIT, Vs. Hospital & Neurology Centre Pvt. Ltd., Range-1, 1-KA-40, First Floor, Vigyan Nagar, Kota. Kota. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACCD 3130 B izR;FkhZ@Respondent vihykFkhZ@Appellant

fu/kZkfjrh dh vksj ls@ Assessee by : Shri B.V. Maheshwari (C.A.) jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (JCIT) a lquokbZ dh rkjh[k@ Date of Hearing : 19/09/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 25/09/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Kota dated 23.11.2017 for Assessment Year 2011-12 wherein he has confirmed the levy of penalty U/s 271E of the I.T. Act.

2.

Briefly, the facts of the case are that the Assessing Officer vide his letter dated 01.09.2015 has referred the case of the assessee for

ITA No. 32/JP/2018 2 Shri Rameshwar Prasad Gupta vs. ACIT

imposition of penalty U/s 271E of the Act to the ld. ACIT, Range-1, Kota stating that the assessee has repaid the loan/deposit in cash to Dr. Rameshwar Prasad Gupta in violation of provisions of Section 269T of the Act amounting to Rs. 1,00,000/-. Thereafter, based on material on record, the ld Add. CIT has held that the assessee had repaid the above said loan/deposit in cash in violation of the provisions of Section 269T of the Act without any reasonable cause. He, therefore, levied the penalty U/s 271E of the Act amounting to Rs. 1,00,000/-.

3.

Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the said levy of penalty. As per the ld. CIT(A), there were entries of cash paid during the year amounting to Rs. 1,00,000/- which constituted repayment as defined U/s 269T and the same is covered U/s 271E of the Act as not bonafide could be brought on record by the assessee for justifying such payment.

4.

Now, the assessee in appeal against the said finding of the ld. CIT(A). The ld. AR has submitted that firstly, the transaction is not in the nature of loan/deposit and it is, therefore, not a case of repayment of loan at all. It was submitted that it is the payment made by the assessee against the credit balance in the account of Dr. Rameshwar Prasad Gupta Director towards his remuneration, rent etc. It was submitted that the assessee company is maintaining two accounts of Dr. Rameshwar Prasad Gupta, one current account in which all the regular transactions were entered including the impugned transaction and another account called unsecured loan account where there are transactions of repayment of loan which has been duly paid through

ITA No. 32/JP/2018 3 Shri Rameshwar Prasad Gupta vs. ACIT

cheque. It was submitted that on analysis of the current account, it may be noted that the amount of rent and remuneration payable to Dr. Rameshwar Gupta which has been credited periodically and against the same, the impunged payment was made in cash. It was accordingly submitted that the transaction is therefore, not in the nature of loan/deposit at first place and therefore, there is no violation of section 269T of the act as contended by the lower authorities and therefore, there is no basis for levy of penalty U/s 271E of the Act.

5.

The ld. DR is heard who has relied on the findings of the lower authorities.

6.

We have heard the rival contentions and perused the material available on record. On perusal of the record, we find that there are two accounts maintained by the assessee in the name of Dr. Rameshwar Prasad Gupta. In the first account titled as Dr. Rameshwar Gupta (creditor), there are transactions in the nature of rent and remuneration payable to Dr. Rameshwar Gupta and there are transactions by way of payment of these expenses by way of cheque as well as the impunged cash payment on 28.01.2011. Further, there is another account in the name of Dr. Rameshwar Gupta (loan account) which has opening balance of 9,18,780/- and there are repayment transactions which were paid through cheque. In light of the same, we find merit in the contention of the ld. AR that the factum of the transaction being in the nature of loan/deposit has not been established by the Revenue and fact also suggests that what has been paid by the assessee to Dr. Remeshwar Prasad in cash is towards is remuneration and the rent

ITA No. 32/JP/2018 4 Shri Rameshwar Prasad Gupta vs. ACIT payable to him. In the light of the same, we are of the view that the provisions of Section 269T of the Act are not attracted in the instant case and therefore, there is no basis for levy of penalty U/s 271E of the Act. In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 25/09/2018.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 25/09/2018. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Rameshwar Prasad Gupta, Kota. 2. izR;FkhZ@ The Respondent- ACIT, Range-1, Kota. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 32/JP/2018} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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