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TAXAP/1226/2009 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1226 of 2009
=========================================================
JOINT
COMMISSIONER OF INCOME TAX (ASSESSMENT) - Appellant(s)
Versus
B
D PATEL & CO - Opponent(s)
=========================================================
Appearance
:
MR
KM PARIKH for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 22/02/2011
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE AKIL KURESHI)
Revenue
is in appeal against judgment dated 7.11.07 of the Tribunal to the
extent the same is against the Revenue. Short facts are as follows:
Respondent-assessee
had accepted series of loans during the relevant assessment year all
exceeding Rs.20,000/- in cash. Such loans from various sources being
in cash and in excess of Rs.20,000/- was not permitted under section
269-SS of the Income Tax Act, 1961. Assessing Officer, therefore,
imposed penalty on the assessee under section 271D of the Act. The
assessee carried the issue in appeal. CIT (Appeals) allowed the
appeal, reversed the order of the AO and set aside the penalty.
Revenue carried the issue further before the Tribunal. The Tribunal
though substantially allowed the appeal and reversed the order of
the CIT (Appeals) and reinforced the penalty imposed by the Assessing
Officer with respect to loans received by the assessee from various
financiers, with respect to different loans totaling Rs.4,42,000/-
accepted by the assessee from HUF of the partners of the assessee
firm, upheld the deletion of penalty.
Counsel
for the appellant vehemently contended that the Tribunal erred in
drawing a distinction between two situations when facts were
otherwise identical. He submitted that if the penalty for loans
accepted from individual financiers was found to be opposed to
section 269-SS, it is difficult to appreciate how the Tribunal
deleted penalty for the loans accepted from the HUF of the partners
of the assessee. He submitted that the HUF and individual partners
being two separate entities, section 269-SS squarely apply. Penalty
was therefore leviable under section 271D.
From
the perusal of the orders on record, we however, find that neither
the Assessing Officer nor the CIT (Appeals) nor the Tribunal doubted
the genuineness of the transactions. It is not the case of the
Revenue that such loans were never advanced. Further, the assessee
had also shown justification for accepting cash loans stating that
receiving cheques, depositing in the bank and then making payments
would consume considerable time. The assessee was in the business of
construction requiring urgent payment for its construction work and
labour charges. The Tribunal was also of the opinion that section
273B permitted the Assessing Officer to waive the penalty if it is
found that the assessee had shown sufficient reasons for accepting
such loans in cash. Reference was also made to the decision of the
Apex Court in the case of Assistant Director of Inspection v.
Km. A.B.Shanthi, 255 ITR 258 wherein the vires of statutory
provisions in question were upheld relying on the provisions of
section 273B giving discretion under certain circumstances not to
impose penalty.
We
are of the view that the Tribunal committed no error particularly
when the loan transactions were not in doubt and the loans were
received from HUF of the partners of the firm and when justification
was shown for accepting such loans in cash instead of cheque. No
question of law arises for consideration in this appeal. The appeal
is therefore dismissed.
(Akil
Kureshi, J.)
(Ms.Sonia
Gokani, J.)
(vjn)
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