Asnew Barrels Pvt.ltd v. The Commissioner Of Income Tax

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.228 OF 2013 Asnew Barrels Pvt.Ltd.. ..Appellant -Versus- The Commissioner of Income Tax...Respondent ........... Mr.B.M.Chatterjee, Senior Advocate i/by Suresh H. Sharma, for the Appellant.Mr.Arvind Pinto, for the Respondent. ...........CORAM: S.C. DHARMADHIKARIAND GIRISH S. KULKARNI, JJ. DATE :- 10[th] March, 2014 PC: 1Heard Mr.Chatterjee, learned Senior Counsel appearing for the Appellant/ Assessee. 2The submission of Mr.Chatterjee is that in this case on the admitted facts Section 269T of the Income Tax Act, 1961 was not attracted. It was not attracted because repayment is not in the sum of Rs.20,000/- or more. Section 269T is entitled “mode of repayment of certain loans or deposits”. In such situation, the Tribunal was not justified in allowing the Appeal of the Appellant only in part. This is not a case where there was no reasonable cause shown. Alternatively and without prejudice, even if Section 269T was attracted yet the cause shown was reasonable, namely, the amount was paid in installments on account of serious illness of the father of Amrutpal Singh Sandhu. Since the amount was required for illness, this was not the case where penalty of twice the amount could have been imposed. 3We are not impressed by any of these contentions. Firstly, Mr.Chatterjee would read Section 269T by omitting completely from consideration the clauses (a) and (b). They stipulate that if the amount has been repaid by the mode other than permissible, what is to be reckoned is not the figure or quantum of repayment, but the amount of loan. Section 269T deals with “mode of repayment of certain loans or deposits”. However, it mandates that no branch of a banking company or a cooperative bank and no other person or firm shall repay any loan or deposit made with them otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the loan or deposit. Then, it stipulates that the section would be attracted if the amount of the loan or deposit together with interest payable thereon or the aggregate amount of loans or deposits held by such person with the Branch of the banking company or cooperative bank, as the case may be, the other company or cooperative society or firm or other person either in his own name or jointly with any other person on the date of such repayment together with the interest payable on such loans or deposits, is Rs.20,000/- or more. That is to be read, therefore, in the context of the loan or deposit. The clauses (a) and (b) have been inserted so as to clarify the aspect of a single loan or deposit or multiple loans or deposits. Thereafter, the provisos are inserted. Lastly, Mr.Chatterjee would rely upon the Explanation (iii) which is the explanation for the entire section and which clarifies that “loan or deposit” means any loan or deposit of money which is repayable after notice or after a period and in the case of a person other than a company, includes loan or deposit of any nature. 4Therefore, the Explanation (iii) cannot be of any assistance. In the present case, the Tribunal found and undisputedly that the Appellant/ Assessee has repaid part of the loans to Mrs.Depinder Kaur Sandhu and Mr.Amrutpal Singh Sandhu in cash aggregating to Rs.2,63,607/- and Rs.2,55,000/- respectively on various dates varying 4Therefore, the Explanation (iii) cannot be of any assistance. In the present case, the Tribunal found and undisputedly that the Appellant/ Assessee has repaid part of the loans to Mrs.Depinder Kaur Sandhu and Mr.Amrutpal Singh Sandhu in cash aggregating to Rs.2,63,607/- and Rs.2,55,000/- respectively on various dates varying from 12.04.2005 to 31.03.2006. The Assessee has not paid the amount on one date, but over a period of one year, to each of the loan creditor. The Commissioner of Income Tax (Appeals), as also, the Tribunal found that the explanation of the Assessee was that the loan was repaid in cash as the father of Amrutpal Singh Sandhu was not well and the amount was required for illness. This explanation was not found to be reasonable, but lacking in bonafides. Once the undisputed facts show that the loan has been repaid in cash and which loan is to the extent indicated in Section 269T, namely, Rs.20,000/- or more, then, we are of the opinion that the present Appeal does not give rise to any substantial question of law and much less as projected by Mr.Chatterjee. 5The judgment of the Division Bench of the Gujarat High Court in the case of Income Tax Officer, Ward 5(2), Baroda v/s VS Hostel reported in (2012) 27 Taxmann 18 (Guj.), is of no assistance as in that case, the issue was, whether, what was advanced was a loan or deposit. It is in the context of deciding that controversy, the Division Bench refers to Sections 269SS and 269T. The Chapter in which Sections 269SS and 269T are placed, has been introduced in 1981. However, as far as Section 269T is concerned, it has been substituted post several amendments and to take care and ensure that the loans are not repaid in a manner otherwise than indicated in the section. The object and purpose is obvious and to encourage the loans being repaid and of huge amounts by account payee cheque or by bank draft. In these circumstances we do not find that there is any error of law or perversity on the part of the Tribunal or the Commissioner of Income Tax (Appeals). The Appeal does not give rise to any substantial question of law and it fails. The Appeal is dismissed. No costs. (GIRISH S. KULKARNI, J.) (S.C. DHARMADHIKARI, J.)