KEYUR MADHUSUDAN SHAH,MUMBAI vs. ADDL CIT RG 14(1), MUMBAI

The assessee has filed the present appeal against the order dated 09.10.2012 passed by the Commissioner of Income Tax (Appeals)-25, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2007- 08.

The assessee has raised the following grounds:- “1. The Commissioner of income Tax(Appeals)-25, Mumbai has ignored all the documentary facts & evidence submitted by the Appellant during the appeal hearings including copies of all the bills/vouchers of expenses aggregating to Rs.9,59,925/- which were also submitted to him, and instead only relied upon his own interpretation of the narration in one entry in the ledger statement.

The CIT(A)-25 Mumbai has acted in a very biased manner by throwing away the appellant’s contention which is strongly supported with documentary facts & evidence. 4. The CIT(A)-25 Mumbai has not been fair in arriving at his decision because he has just blindly thrown away the appellant’s submission while conjecturing his own theory, basing it only on the narration in one entry in the ledger statement. 5. The appellant prays that the penalty u/s 271D be set aside completely. 6. The appellant craves leave to add, to amend or alter the above Grounds of Appeal.” The brief facts of the case are that on account verification of the 3. account of the assessee relevant to the A.Y. 2007-08, it was noticed that the assessee had taken loan to the tune of Rs.9,59,925/- in cash from his wife Smt. Kavita keyur Shah. Therefore the notice was issued and finding no satisfactory reply, the penalty to the tune of Rs.9,59,925/- was imposed on account of contravention of Section 269SS of the Act u/s 271D of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the penalty, therefore, the assessee has filed the present appeal before us.

We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The assessee has filed the present appeal 142 days delayed. The assessee filed an application for condonation of delay and the reasons mentioned therein that the health of the assessee was not proper. Therefore, the present appeal has been filed delayed. The application is supported by Keyur Madhusudan affidavit and medical certificate of different hospital on record which speaks about admission of the assessee for different periods. The said certificate has been annexed as annexure 5 on the record. Since, we found proper explanation for the condonation of delay, therefore, we condone the delay. The penalty u/s 271D of the Act has been levied by the AO on account of taking the loan by the assessee to the tune of Rs.9,59,925/- from his wife in cash. The explanation of the assessee was that the appellant and his wife have been jointly carrying the business and they were contributing to the expenses of reconstruction and redevelopment. Based upon their independent cash flows they were making payment to the contractor and vendors directly. At the end of the financial year all expenses of reconstruction and redevelopment were consolidated and accountant in the appellants books of account. His wife never gave any loan to appellant nor charged any interest. The entry was passed at the end of the year. Nothing was concealed. She was paying the bill in cash receipt or also issuing the cheques for payments. The important thing is that the copies of all the bills and vouchers of expenses aggregating to Rs.9,59,925/- were also submitted before them. Since everything was explained. Documentary evidence was produced. There is no iota of evidence on the file which may speak about the loan transaction between husband and wife. No doubts everything has not been explained properly at the time of assessment. Any how the assessee