ITO, NEW DELHI vs. RAMBHU KUMAR RAJ, NEW DELHI

The present appeal has been filed by the Revenue assailing the correctness of the order dated 01.02.2016 of the CIT(A)-14, New Delhi, pertaining to 2010-11 assessment year on the following grounds :- “

On the facts and circumstances of the case and in law CIT(A) has erred in –

1. Deleting the penalty u/s 271E of IT Act imposed amounting to Rs. 13,05,000/- even after the assessee couldn't prove that the cheque of Rs. 30,00,000/- paid to M/s Aggarwal Corporation was actually a repayment of loan of three parties by submitting supporting documents/ledgers/confirmation from all the parties concerned.

2. Not asking for a remand report on the new facts, related to loan given by M/s Narendra Agencies to assessee during F.Y. 2006-07, presented before him during appellate proceedings, thereby not affording an opportunity to AO, verify the facts.

3. The appellant craves the right to add, alter or amend any ground of appeal before or during the course of the hearing of the appeal.”

2. No one was present on behalf of the assessee at the time of hearing. However, on perusal of the material available on record it was submitted by the Ld.Sr.DR that due to the issue addressed in Ground No.2 the procedural lapse is evident from the record itself thus it can be decided without hearing the assessee. Referring to Ground No.2 it was submitted that the evidence taken into consideration by the CIT(A) has not been confronted to the Assessing Officer as would be evident from the conclusion drawn by the ld. CIT(A) on facts. Carrying us through the said finding it was his submission that the statements of the assessee in fact have been accepted blindly as neither the CIT(A) has cared to personally

carry out any verification and arrived at a finding nor has he recorded that he personally has seen the facts and evidences. Moreover, the evidences have not been confronted to the Assessing Officer also. The finding under is challenged reproduced hereunder :- “On perusal of records it is observed that the Ld. AO has not brought anything on record to establish that the appellant repaid Rs.13,05,000/- to M/s Narender Agencies in cash. As per the above submissions of the Ld. AR the payments were made through cheques on which the provisions of section 271E are not attracted.”

2.1. Ld. Sr. DR inviting attention to the order u/s 271E submitted that admittedly the assessee had paid in cash to M/s Narender Agencies an amount of Rs.13,05,000/-. Since the payment was made in cash the proceedings were initiated requiring the assessee to explain the same. Referring to the order it was submitted that the assessee was required to demonstrate that he was required to pay as alleged by it M/s Aggarwal Corporation Rs.30,00,000/- on behalf of the following three parties :- On behalf of Narendra Agencies Rs.13,05,000/- On behalf of R. K. Enterprises Rs. 9,95,000/- On behalf of Aappico Group India Rs. 7,00,000/- Total Rs.30,00,000/- 2.2. The assessee relied upon the entries in ledger account of these parties and the assessee claimed that these three parties were debtors of M/s Aggarwal Corporation. The factual evidences in support of the said submission it was submitted were reqried to be filed since as per the assessee these three entities were either debtors of M/s Aggarwal Corporation “either due to any sales” or by any “advance/loans made to these parties.” Accordingly in order to ascertain genuineness of the claim, it was submitted summons were issued to these three entities by the AO and also to M/s Aggarwal Corporation. All these returned with the comment “no such person”. Only in the case of M/s R. K. Enterprises a reply was received but even they failed to acknowledge any transaction with M/s Aggarwal Corporation. Accordingly, in these circumstances, it was submitted penalty of Rs.13,05,000/- was levied for transaction in violation of provisions of section 369T. The following conclusion arrived at by the Assessing Officer it was submitted has not been considered nor has it been addressed by the CIT(A), who has merely blindly accepted the assessee’s version :- “Hence, it is pertinent to mention that along with his reply dated 21.01.2014, the assessee submitted copy of account of M/s R.K. Enterprises and M/s Aappico Group India and credit balance as on 31.03.2009 against them were shown at Rs.9,95,000/- and Rs.7,00,000/-; respectively but as per details available on assessment records of the assessee for A.Y. 2009-10, these persons, what to say of any balances, have not been shown in either Annexure-‘C' which contains ‘Details of Un-Secured Loan as on 31st March 2009’ or in Annexure- ‘D’ which contains ‘Details of Sundry Creditors as on 31st March 2009’. All these facts show that the assessee has furnished a false submission in respect of amount due to M/s

R. K. Enterprises and M/s Aappico Group India, which, he claimed, was paid to M/s Aggarwal Corporation and he failed to submit correct address of M/s Aggarwal Corporation so as to enable the department to verify his claim of adjustment of loan taken from M/s Narendra Agencies towards payment to M/s Aggarwal Corporation as according to the assessee Narendra Agencies was having M/s Aggarwal Corporation as creditor in their books of accounts. This makes it clear that the assessee has come up with a concocted story regarding payment to M/s Aggarwal Corporation made on behalf of M/s Narendra Agencies. From the above discussion, it is clear that assessee repaid loan of Rs.13,05,000/- otherwise than by account Payee cheque/draft. This transaction of Rs.13,05,000/- is in violation of the provisions of section 269T.”