NAMMALVAR LINGUSAMY,VALSARAVAKKAM vs. CIT [APPEALS]-14, CHENNAI

O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

2. The appeal filed by the assessee is delayed by 24 days in filing the appeal and filed a petition for condonation of delay in support of an affidavit to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay in filing of the appeal stands condoned and the appeal is admitted for adjudication.

4. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the consideration clause of the deed of sale had wrongly entered the transaction in mode of cash while in reality it was an adjustment of an existing debt through a journal entry. By relying upon the decision of the Hon’ble Madras High Court in the case of Anamallais Bus Transports (P.) Ltd. v. PCIT [2024] 158 taxmann.com 245 (Madras) and filing written submissions, the ld. counsel prayed for deleting the penalty.

5. On the other hand, the ld. DR has submitted that the case law relied on by the ld. counsel has no application to the facts of the present case in the absence of any cogent material evidence furnished either before the Assessing Officer or before the ld. CIT(A) or even before the Tribunal and pleaded for confirming the penalty levied under section 271D of the Act.

6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. As per the registered deed of sale, since the assessee sold an immovable property and received part consideration in cash of ₹.1,60,00,000/-, the Assessing Officer has issued notice under section 274 r.w.s. 271D of the Act. As the assessee has received part consideration in cash, which is in violation of the provisions of section 269SS of the Act, the Assessing Officer levied penalty under section 271D of the Act. On appeal, though the assessee has raised various grounds before the ld. CIT(A), praying for deleting the penalty levied, but, before the Tribunal, the assessee has raised a different ground that the “consideration clause of the deed of sale had wrongly entered the transaction in mode of cash”. The written submissions of the ld. DR are reproduced as under: In the present case the assessee has admitted in the sale deed before SRO admitting receipt of cash. Moreover as observed by CIT(A) in the last para of the order the details and evidences in support of his claim were not submitted. Only a vague claim was made that loan was outstanding in some group company. The confirmation filed by the lender also does not mention the creditors name specifically. Even before ITAT assessee has submitted only a balance sheet of M/s. Thirupathi Brothers Film Media Pvt. Ltd., 2013- 14 as on 31.03.2014. He has not submitted the relevant balance sheets that as on 31.03.2016 and 31.03.2017, relevant entries passed in the books of the said company, evidence that the said company belongs to the seller etc. Thus it is submitted that the decision of the Hon'ble High Court in WP no 31682 of 2023 dt 07.12.2023 , in the case of M/s.Annama11ais Bus Transports (p) Ltd, relied on by the assessee, has no application to the facts of the present case and it is prayed that the appeal may kindly be dismissed. 6.1 The written submissions filed by the assessee are reproduced as under: I herewith submit the following in response to the Written Submission of the O/o. CIT DR (ITAT), dated 30.01.20024: 1. A copy of the Audited Balance Sheet of M/s. Thirrupathi Brothers Film Media Pvt. Ltd. for the FY 2013-14 along with the Schedule of “Other Current Liabilities” was submitted since it reflects the loan taken from Mr. Chukkapalli Srinivasa Prasad and statements for FY 2013-14 were submitted only to prove the year of loan taken by the group company M/s. Thirrupathi Brothers Film Media Pvt. Ltd. and copies of the bank statements were submitted to prove that the loan was received through Bank. In this regard we have also submitted confirmation letter from the bank which proves that the loan amount was received from Mr. Chukkapalli Srinivasa Prasad during the FY 20 13-14.

3. Further, as per the Decree dated 08.01.2016 it was directed that the Appellant and the group company M/s.Thirrupathi Brothers Film Media Pvt. Ltd. was to pay Rs.2 crores on or before 07.02.2016, Rs.2 crores on or before 07.03.2016, Rs.2.10 crores on or before 07.04.2016 and Rs. 1.10 crores on or before 01.05.2016. This proves beyond doubt that the liability as shown in the financials of the group company M/s. Thirrupathi Brothers Film Media Pvt Ltd. for the FY 2013-14 continued to be in existence during the FY 2016-17 relevant to the AY 2017- 18.

before the ITAT, the assessee has raised a ground viz.,

3. That the ld. CIT(A) erred in failing to appreciate that the ‘Consideration Clause’ of the deed of sale had wrongly entered the transaction in mode of cash while in reality it is an adjustment of an existing debt through a journal entry”.

6.3 Based on the registered deed of sale, wherein, it has been mentioned that the assessee has received part of sale consideration of ₹.1,60,00,000/- in cash, which is, in violation of the provisions of section 269SS of the Act, the Assessing Officer initiated penalty proceedings and levied penalty under section 271D of the Act.

6.4 We have carefully perused the copy of the registered document No. 2767/2016 filed by the assessee, wherein, all the pages were duly signed by both the vendor and purchaser and in page 3/17; the following details of receipt of consideration are mentioned: a. ₹.1,60,00,000/- (Rupees one crore and sixty lakhs only) paid by way of cash on 26.04.2016. b. ₹.1,46,99,384/- (Rupees one crore forty six lakhs ninety nine thousand three hundred and eighty four only) loan closure amount by cheque bearing No. 848089 dated 21.04.2016 drawn on Andhra Bank, Kodambakkam branch, Chennai. c. ₹.3,00,616/- (Rupees three lakhs six hundred and sixteen only) paid by means of cheque bearing No. 000123 dated 27.04.2016, drawn on Kotak Mahindra Bank, Arcot Road, Chennai, at the time of execution of these document presents; As per registered deed of sale, it is clear that the assessee has received part of sale consideration of ₹.1,60,00,000/- in cash. However, the contention of the assessee is that the consideration clause of the deed of sale had wrongly entered the transaction in mode of cash while in reality it was an adjustment of an existing debt through a journal entry. The above contention of the assessee is not acceptable by any Court of Law, claiming to have wrong entry has been made in a document, which was duly signed by both the vendor and purchaser and registered by the Sub- Registrar of the State Revenue Department in the absence of any material evidence. The assessee should have approached the Appellate Authority of the Tamil Nadu State Revenue Department for any modification/addition/deletion, etc., which was not done in this case. Under the above facts and circumstances, we are of the opinion that the ld. CIT(A) has rightly confirmed the penalty levied under section 271D of the Act and thus, the appeal filed by the assessee is dismissed.