THE ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD vs. SHRI MAHESH CHHOTALAL SHAH, AHMEDABAD

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ITA 2920/AHD/2016Status: DisposedITAT Ahmedabad03 December 2018AY 2010-114 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of the penalty. It found that the CIT(A)'s factual finding that no cash loan was accepted in contravention of Section 269SS during AY 2010-11 was not rebutted by the Revenue.

What were the facts?

The Revenue appealed against the deletion of a penalty of Rs. 75 Lakhs levied under Section 271D for AY 2010-11. The CIT(A) had deleted the penalty, finding no cash transactions of loan acceptance during the relevant financial year.

What were the issues?

Whether the penalty under Section 271D is sustainable when there are no factual findings of accepting loans or deposits in cash in contravention of Section 269SS for the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMADABAD

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Hearing: 05/12/2018

PER : Rajpal Yadav, Judicial Member

Aggrieved with the deletion of penalty amounting to Rs.75 Lakhs levied under s.271D of the Act, Revenue is in appeal before the Tribunal against the order of the learned CIT(A)-12, Ahmedabad, dated 27.08.2016 passed for A.Y. 2010-11.

ITA No. 2920/Ahd/16 A.Y.2010-11 (ACIT vs. Shri Mahesh C. shah) Page 2

2.

In response to the notice of hearing, no one has come present on behalf of the assessee, therefore, with the assistance of learned DR, we have gone through the record carefully and proceed to decide the appeal ex parte qua the assessee.

3.

It emerges out from the record that AO has imposed a penalty of Rs.75 Lakhs in AY 2010-11 under s.271D of the Income Tax Act. Similarly in AY 2011-12, he has imposed penalty of Rs.1,01,00,000/-. Learned first appellate authority had decided both the appeals by way of impugned common order. He confirmed the penalty at Rs.81Lakhs in AY 2011-12 but deleted the penalty of Rs.75 Lakhs in AY 2010-11. We are concerned with deletion of penalty in AY 2010-11. The finding of the CIT(A) in this connection is worth to note. It read as under:

“4. Thus, it has already been held by the Ld. CIT(A) in case of the Shri Dilip G. Purohit that as per the seized documents the amounts of cash as under have been advanced by Shri Dilip Purohit and accepted by the appellant as loan:

As noted on BF-3 page 24 25000/00 29/12/10 11230/00 5/2/11(11 lacs + small amounts)* 20000/00 5/2/11 16000/00 9/2/11 1464/00 (interest calculation)* 10000/00 18/2/11 81,00,000 Total loan in cash accepted by appellant during F.Y.

4.1 Though the appellant has made neither any appearance nor filed an written submissions, the facts with regard to transactions with the appellant as already noted by the Ld. CIT(A) would obviously need to be taken note of by me while deciding these appeals. It is thus categorical that there is no transaction of cash advance accepted by the appellant during F.Y.2009-10 relatable to A.Y.2010-11.

ITA No. 2920/Ahd/16 A.Y.2010-11 (ACIT vs. Shri Mahesh C. shah) Page 3

Thus, there is no question of levy of penalty u/s 271D for A.Y.2010-1 L. Moreover, the appellant has been right in the Statement of Fact that the JCIT has not recorded the exact details and dates of alleged transactions of acceptance of cash deposits by the appellant. The Ld. CIT(A) has clearly held, on the contrary, that no amount of unaccounted cash on account of any cash advance to the appellant is sustainable in the hands of Shri Dilip G. Purohit for A.Y 2010-11 as no cash in fact has been recorded in seized documents as advance made to the appellant by Dilip Purohit during F.Y.2009-10. In view of this factual matrix, the penalty of Rs.75,00,000/-- for A.Y.2010-11 is found not to be sustainable on facts and therefore, the penalty for A.Y.2010-11 is cancelled. Thus, the appellant succeeds for A.Y.2010-11 and gets relief of Rs.75,00,000/-.

4.

Section 271D of the Act has a direct bearing on the controversy, therefore, it is worth to take note of the Section. It read as under:

“271D [(1)] If a person takes or accepts any loan or deposit [or specified sum] in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit [or specified sum] so taken or accepted.] [(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.]”

5.

On perusal of the Section would indicate that penalty under this Section would be imposable, if a person accepts any loan or deposit in contravention of Section 269SS i.e. if these are being taken in cash exceeding a prescribed limit then penalty would be imposable. A perusal of the finding of the CIT(A) would show that no cash transaction has taken place in accounting year relevant to AY 2010-11. This is a categorical finding of fact which has not been rebutted by the Revenue, if there is no transaction of cash showing acceptance of loan or deposits then how penalty

ITA No. 2920/Ahd/16 A.Y.2010-11 (ACIT vs. Shri Mahesh C. shah) Page 4

would be imposable. Learned first appellate authority therefore rightly deleted the penalty and we do not find any merit in this appeal, it dismissed.

6.

In the result, appeal of the Revenue is dismissed.

This Order pronounced in open Court on 05/12/2018

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 05/12/2018 True Copy S.K.Sinha आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. अपीलाथ� / Appellant 2. ��यथ� / Respondent 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

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