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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI CHANDRA POOJARI
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Chennai, dated under Section 271D of the Income-tax Act, 1961 (in short 'the Act').
Shri S. Sridhar, the Ld.counsel for the assessee, submitted that there was a delay of 36 days in filing the appeal before this Tribunal. According to the Ld. counsel, the assessee incurred a huge loss during the financial year 2014-15 in share trading business. Therefore, he could not afford to pay fees for filing appeal before this Tribunal. The Ld.counsel explained that the assessee was under the bonafide belief that the appeal fee was `10,000/- and he could not even pay that amount. After clarification, the assessee was advised to pay `500/- as appeal fee for filing appeal against the penalty order. Even this amount of `500/- could not be paid by the assessee. With great difficulty, the assessee was able to generate funds and thereafter he was able to file the appeal. Therefore, the Ld.counsel prayed that the delay of 36 days may be condoned.
We heard Shri A.V. Sreekanth, the Ld. Departmental Representative also. The Ld. D.R. submitted that during the assessment year 2008-09, the assessee earned profit of `26,02,390/- and the total income assessed by the Assessing Officer was `28,02,390/-. The claim of the assessee is that he suffered a loss during the financial year 2014-15. Therefore, he appeal before this Tribunal. This claim of the assessee is not controverted by the Department. Therefore, this Tribunal is of the considered opinion that the financial difficulty faced by the assessee in filing the appeal before this Tribunal has to be construed as sufficient cause for not filing appeal before this Tribunal.
Accordingly, the delay of 36 days is condoned and the appeal is admitted.
Now coming to the merit of the appeal, the Assessing Officer found that the assessee received `2,30,000/- from his father Shri G.
Bharathan. The assessee also received a sum of ` 1,60,000/- from his mother Smt. B. Pushpa. Another sum of ` 1,25,000/- was received by the assessee from one Smt. D. Vijaya, who is his mother’s sister. According to the Ld. counsel, due to urgent commercial necessity, the assessee borrowed funds in cash and deposited the same on the very same day in the bank account for clearing the cheque issued by the assessee. Referring to the copies of the bank statements, the Ld.counsel submitted that the cash received by the assessee from his close relatives were deposited in the bank account and the same was cleared immediately on the next day for clearing the cheque. Therefore,
On the contrary, Shri A.V. Sreekanth, the Ld. Departmental Representative, submitted that admitted the assessee has received cash exceeding `20,000/- from three persons. There was no reasonable cause which forced the assessee to receive the money in cash. Placing reliance on the decision of this Bench of the Tribunal in Thenamal Chhajjer v. JCIT (2005) 96 ITD 210, the Ld. D.R. submitted that even for genuine loan or deposit, the assessee has to explain why it was obtained in cash. If the explanation was reasonable or acceptable, then penalty may not be levied under Section 271D of the Act. In this case, there was no explanation except to say that the assessee needed money urgently for business purpose. The Ld. D.R. has also placed his reliance on the judgment of Madras High Court in P.Baskar v. CIT (2012) 340 ITR 560.
We have considered the rival submissions on either side and perused the relevant material on record. It is not in dispute that the assessee received money from his own father, mother and mother’s sister. The assessee filed copies of the bank statements to show that the amount was deposited in the bank and it was cleared on the Tribunal found that the Madras High Court in CIT v. Smt. M.
Yesodha (2013) 351 ITR 265 had an occasion to consider an identical issue. The Madras High Court found that a transaction between close relatives, i.e. assessee and his daughter-in-law and father-in-law, was a reasonable transaction and genuine one due to urgent necessity in paying the money to seller. In this case also, the assessee admittedly received cash from his father, mother and mother’s sister. In view of the close relationship between the assessee and from whom the money was received, this Tribunal is of the considered opinion that the judgment of Madras High Court in Smt. M. Yesodha (supra) is squarely applicable to the facts of the case. The assessee has also demonstrated that the money received in cash was deposited in the bank account for clearing the cheque issued due to commercial expediency. Therefore, this Tribunal is of the considered opinion that there was a reasonable cause on the part of the assessee in receiving the money in cash as found by the Madras High Court in Smt. M. Yesodha (supra).
We have also carefully gone through the judgment of Madras High Court in P. Baskar (supra). In the case before the High Court, it is not the case of the assessee that the money was received from 6 close relatives. The assessee has received money from various persons. Therefore, this Tribunal is of the considered opinion that the judgment of Madras High Court in P. Baskar (supra) may not be applicable. Similarly, the decision of this Bench of the Tribunal in Thenamal Chhajjer (supra) is also not applicable to the facts of the case, since it was not the case of receiving money from close relatives. Hence, by following the judgment of Madras High Court in Smt. M. Yesodha (supra), the orders of the lower authorities are set aside and the penalty is deleted.
In the result, the appeal of the assessee stands allowed.
Order pronounced on 21st August, 2015 at Chennai.