ITO, New Delhi v. M/s Vijay Lakshmi Printing Works Pvt. Ltd.,, New Delhi

ITA 4653/DEL/2009 | 2004-2005
Pronouncement Date: 18-02-2010 | Result: Dismissed

Appeal Details

RSA Number 465320114 RSA 2009
Assessee PAN AABCV7028F
Bench Delhi
Appeal Number ITA 4653/DEL/2009
Duration Of Justice 2 month(s) 9 day(s)
Appellant ITO, New Delhi
Respondent M/s Vijay Lakshmi Printing Works Pvt. Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 18-02-2010
Date Of Final Hearing 09-02-2010
Next Hearing Date 09-02-2010
Assessment Year 2004-2005
Appeal Filed On 09-12-2009
Judgment Text
I.T.A. NO. 4653 /DEL/2009 1/7 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH H BEFORE SHRI K. G. BANSAL ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 4653/DEL/2009 (ASSESSMENT YEAR 2004-05) ITO WARD 17(3) VS. M/S. VIJAY LAKSHMI PRINTING NEW DELHI. WORKS PVT. LTD. 203 KUSHAL BAZAR 32-33 NEHRU PLACE NEW DELHI (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAABCV7028F APPELLANT BY: SHRI N K CHAND SR. DR RESPONDENT BY: SHRI TARUN CHATURVEDI CA ORDER PER GEORGE MATHAN JM: 1. THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AG AINST THE ORDER OF LD. CIT(A) XXIX NEW DELHI IN APPEAL NO.11/09-10 DATED 05.10.2009 FOR THE ASSESSMENT YEA R 2004-05 DELETING THE PENALTY LEVIED U/S 271E OF THE ACT. SHRI N K CHAND SR. DR REPRESENTED FOR THE REVENUE AND SHRI TARUN CHATURVEDI CA REPRESENTED ON BEHALF OF THE ASSESSEE. 2. IT WAS THE SUBMISSION BY THE LD. A.R. THAT IN TH E COURSE OF ASSESSMENT IT WAS NOTICED FROM THE ANNEXURE J T O THE FORM 3CD ACCOMPANYING THE AUDIT REPORT THAT THE I.T.A. NO. 4653 /DEL/2009 2/7 AUDITORS HAD MENTIONED THAT THE ASSESSEE HAD REPAID TWO LOANS OTHER THAN BY ACCOUNTS PAYEE CHEQUES/ACCOUNTS PAYEE DEMAND DRAFTS. IT WAS THE SUBMISSION THAT TH E ANNEXURE SHOWED THE PAYMENT OF RS.17 LACS TO M/S. PERFECT SOFTECH PVT. LTD. AND ANOTHER PAYMENT OF RS.4.80 LACS TO M/S. ENPRO TELECOM P. LTD. WHICH H AD BEEN MADE OTHER THAN BY ACCOUNTS PAYEE CHEQUES OR ACCOUNTS PAYEE DEMAND DRAFTS. IT WAS THE SUBMISSIO N THAT AS THE PAYMENT HAD BEEN MADE IN VIOLATION OF T HE PROVISIONS OF SECTION 269T OF THE ACT PENALTY U/S 271E OF THE ACT HAD BEEN LEVIED. IT WAS THE SUBMISSION THAT THE CIT(A) HAD DELETED THE PENALTY LEVIED ON THE GR OUND THAT THE PAYMENT TO M/S. PERFECT SOFTECH P. LTD. WA S BY ACCOUNTS PAYEE CHEQUE AND THE PAYMENT TO M/S. ENPRO TELECOM P. LTD. WAS BY BOOK ENTRY BY TRANSFERRING T HE AMOUNT TO THE ACCOUNT OF M/S. PERFECT SOFTECH P. LT D. WITH THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(A) WAS LIABLE TO BE REVERSED ON ACCOUNT OF THE FACT THAT THE AUDIT REPORT OF THE ASSESSEE ITSE LF SPECIFIES THAT THE PAYMENTS HAD BEEN MADE OTHER THA N BY ACCOUNTS PAYEE CHEQUES AND ACCOUNTS PAYEE DEMAND DRAFTS. IT WAS THE FURTHER SUBMISSION THAT THE PRI NCIPLES OF EQUITY DID NOT APPLY TO TAXATION LAW AND THE ASS ESSEE HAD NOT PAID THE AMOUNT BY ACCOUNTS PAYEE CHEQUE OR ACCOUNT PAYEE DEMAND DRAFT AND THE ORDER OF THE LD. CIT(A) IS LIABLE TO BE REVERSED. I.T.A. NO. 4653 /DEL/2009 3/7 3. IN REPLY THE LD. A.R. SUBMITTED THAT THE AMOUNT PAID OF RS.17 LACS TO M/S. PERFECT SOFTECH P. LTD. WAS BY CHEQUE AND THIS WAS ALSO WITHIN THE KNOWLEDGE OF TH E A.O. AND EVEN IN THE PENALTY ORDER THE DETAILS WER E AVAILABLE. IT WAS THE SUBMISSION THAT WHILE LEVYIN G THE PENALTY THE ADDITIONAL CIT HAD RAISED A QUERY AS TO WHY THE DEBIT TO THE ASSESSEES ACCOUNTS WAS ON 03.01.2 004 WHEREAS CREDIT TO THE ACCOUNTS OF PERFECT SOFTECH P VT. LTD. WAS ON 02.01.2004. IT WAS THE SUBMISSION BEFO RE THE LD. CIT(A) THAT THE ASSESSEE HAD ALSO PRODUCED THE COPY OF THE CHEQUE WHICH WAS OBTAINED FROM HDFC BANK WHICH SHOWED THAT THE CHEQUE WAS DATED 01.01.2004 AND THE ACCOUNTS OF THE ASSESSEE HAS BEE N DEBITED ON 03.01.2004 ON ACCOUNT OF CLEARING AND TH E ACCOUNTS OF M/S. PERFECT SOFTECH P. LTD. SHOWED THE TRANSACTION DATED AS 02.01.2004 WHEREAS THE VALUE D ATE WAS 03.01.2004. IT WAS THE FURTHER SUBMISSION THAT EVEN IN ANNEXURE 2 OF THE AUDIT REPORT IN RESPECT OF COL UMN; WHETHER THE REPAYMENT WAS MADE OTHER THAN BY ACCOUNTS PAYEE CHEQUES OR ACCOUNTS PAYEE DEMAND DRAFTS IT WAS ONLY WRITTEN AS YES WHICH ACTUALL Y WAS INTENDING TO MEAN THAT THE AMOUNT HAS BEEN PAID BY ACCOUNTS PAYEE CHEQUE. IT WAS THE FURTHER SUBMISSI ON THAT THE CHEQUE ITSELF SHOWED THAT THE CHEQUE AS AN ACCOUNT PAYEE CHEQUE AND THE FACT THAT IT HAS BEEN CLEARED THROUGH BANK ACCOUNT CLEARLY SHOWS THAT IT IS AN I.T.A. NO. 4653 /DEL/2009 4/7 A/C PAYEE CHEQUE ONLY. IN RESPECT OF THE PAYMENT T O M/S. ENPRO TELECOM P. LTD. IT WAS THE SUBMISSION T HAT BOTH ENPRO TELECOM P. LTD. AND PERFECT SOFTECH P. L TD. WERE CONNECTED BUSINESSES AND THEY HAVE THE SAME ADDRESS AS WAS EVIDENT FORM THE ANNEXURE I OF THE AUDIT REPORT. THE ASSESSEE HAD TRANSFERRED THE LOAN FROM THE ACCOUNT OF M/S ENPRO TELECOM P. LTD. TO THE ACCOUNT OF M/S. PERFECT SOFTECH P. LTD. ON THE INSTRUCTIONS RE CEIVED FROM THE TWO COMPANIES. IT WAS THE SUBMISSION THAT THE ANNEXURE TO THE AUDIT REPORT ITSELF SHOWED THAT AN AMOUNT OF RS.1 31 77 130/- WAS THE MAXIMUM OUTSTANDING IN THE ACCOUNT IN RESPECT OF M/S. PERFE CT SOFTECH P. LTD. AND BY BOOK ENTRIES THE ASSESSEE H AD TRANSFERRED THE AMOUNT OF RS.4.80 LACS WHICH WAS IN THE NAME OF M/S. ENPRO TELECOM P. LTD. TO THE ACCOUNT O F M/S. PERFECT SOFTECH P. LTD. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD IN FACT NOT RETURNED ANY LOAN BUT HAD ONLY TRANSFERRED THE LOAN IN RESPECT OF M/S. ENPRO TELECOM P. LTD. IT WAS THE SUBMISSION THAT THE LOA N WAS NOT DISPUTED AS A BOGUS ENTRY. IT WAS THE FURTHER SUBMISSION THAT AS IT WAS ONLY THE TRANSFER OF LOAN FROM ONE CONCERN TO ANOTHER CONCERN BOTH OF WHICH WERE CONNECTED CONCERNS HAVING THE ACCOUNT IN THE ASSESSEES BOOKS OF ACCOUNT THE ASSESSEE WAS OF TH E BONA FIDE BELIEF THAT NO ACCOUNT PAYEE CHEQUE OR DEMAND DRAFT WAS REQUIRED TO BE ISSUED AND A BOOK I.T.A. NO. 4653 /DEL/2009 5/7 ENTRY WAS FULLY PERMISSIBLE. IT WAS THE SUBMISSION THAT IN VIEW OF THE PROVISIONS OF SECTION 273 B OF THE A CT THE REASONABLE CAUSE SHOULD BE ACCEPTED AND THE PEN ALTY AS CANCELLED BY THE LD. CIT(A) OF THE LOAN TRANSFER RED FROM M/S. ENPRO TELECOM P. LTD. TO M/S. PERFECT SOFTECH P. LTD. WAS ALSO NOT HIT BY THE PROVISIONS OF SECTION 269T IN VIEW OF THE FOLLOWING DECISIONS: CIT VS GOVIND KUMAR 119 TAXMAN 110 (RAJ.) SUNFLOWER BUILDERS P. LTD. VS DCIT 61 ITD 227 (PUNE) ITO V. AMAR NAATH SHIVRAJ (HUF) 1 SOT 346 (AGRA) ACIT VS. GUJARAT AMBUJA PROTEINS LTD. 3 SOT 811 (AHD.) 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE PENALTY ORDER OF THE CIT(A). A PE RUSAL OF THE PENALTY ORDER SHOWS THAT THE AMOUNT OF RS.17 LACS HAS BEEN CLEARED THROUGH CHEQUE NO.25984 DATED 03.01.2004 FROM THE ACCOUNT OF THE ASSESSEE. THE ACCOUNTS OF M/S. PERFECT SOFTECH P. LTD. EXTRACTED IN THE PENALTY ORDER CLEARLY SHOWS THAT THE TRANSACTION DA TED (TXN DATA) IS SHOWN AS 02.01.2004 AND THE VALUE DAT E (VAL. DATE) IS SHOWN AS 03.01.2004 AND CHEQUE NUMBE R HAS ALSO BEEN IDENTIFIED AS 025984. A PERUSAL OF THE COPY OF THE CHEQUE ALSO SHOWS THAT THE CHEQUE HAS B EEN ISSUED ON 01.01.2004 AND IS AN ACCOUNT PAYEE CHEQUE . IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FINDING OF LD. CIT(A) IN RESPECT OF DELETION OF THE I.T.A. NO. 4653 /DEL/2009 6/7 PENALTY LEVIED ON THE REPAYMENT OF LOAN TO M/S. PER FECT SOFTECH P. LTD. FOR THE AMOUNT OF RS.17 LACS IS ON RIGHT FOOTING AND IS UPHELD. 5. IN RESPECT OF THE BOOK ENTRY PASSED IN RESPECT O F THE LOAN FROM M/S. ENPRO TELECOM P. LTD. BY WHICH THE ACCOUN TS OF THE ASSESSEE WAS DEBITED IN THE BOOKS OF M/S. PE RFECT SOFTECH P. LTD. ON 31.03.2004 FOR AN AMOUNT OF RS.4 .80 LACS AND CORRESPONDINGLY THE ACCOUNTS OF THE ASSESS EE WAS CREDITED IN THE BOOKS OF M/S. ENPRO TELECOM P. LTD. ON 3.103.2004 FOR THE AMOUNT OF RS.4.80 LACS CLEARLY SHOWS THAT THE LOAN TAKEN FROM M/S. ENPRO TELECOM P. LTD. HAS BEEN TRANSFERRED TO THE ACCOUNT S OF M/S. PERFECT SOFTECH P. LTD. TRUE THIS IS ONLY A B OOK ENTRY AND THERE IS NO TRANSFER OF CASH. THE ANNEXU RE TO THE AUDIT REPORT ALSO SHOWS THAT BOTH M/S. PERFECT SOFTECH P. LTD. AND M/S. ENPRO TELECOM P. LTD. HAVE THE SAME ADDRESS. IN THE AUDIT REPORT ALSO IT HAS BEEN CLEARLY MENTIONED THAT THE LOAN WAS REPAID BY TRANSFERRING THE AMOUNT TO M/S. PERFECT SOFTECH P. LTD. AS THE LOAN WAS GIVEN BY M/S. ENPRO TELECOM P. LTD. ON BEHALF OF M/S. PERFECT SOFTECH P. LTD. THUS I N FACT WHAT HAS HAPPENED IS THAT BOTH M/S. PERFECT SOFTECH P. LTD. AND M/S. ENPRO TELECOM P. LTD. HAVE ADJUSTED T HE ENTRIES IN THEIR BOOKS BY PASSING THE NECESSARY TRA NSFER ENTRIES AND THE CORRESPONDING TRANSFER ENTRY BEING A BOOK ENTRY HAS ALSO TAKEN PLACE IN THE ASSESSEES B OOKS. I.T.A. NO. 4653 /DEL/2009 7/7 IN THESE CIRCUMSTANCES IT CANNOT BE SAID THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269 T OF THE ACT. IN THESE CIRCUMSTANCES THE EXPLANATION G IVEN BY THE ASSESSEE IS FOUND TO BE A BONA FIDE EXPLANAT ION AND CONSEQUENTLY THE PROVISIONS OF SECTION 273B OF THE ACT WOULD APPLY AND THE PENALTY LEVIED U/S 271E OF THE ACT IS HELD TO BE RIGHTLY DELETED BY THE LD. CIT(A) . IN THESE CIRCUMSTANCES THE FINDING OF LD. CIT(A) IN DELETING THE PENALTY LEVIED U/S 271E IS FOUND TO BE ON RIGHT FOOTING AND THE SAME IS UPHELD. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 7. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 18 TH FEB. 2010. SD./- SD./- (K. G. BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:18 TH FEB. 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI