Commissioner Of Income Tax-Iii v. Ritu Rayon Private Limited....opponent(S

O/TAXAP/2525/2009 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 2525 of 2009 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER =========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX-III....Appellant(s) Versus RITU RAYON PRIVATE LIMITED....Opponent(s) ================================================================ Appearance: MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIand HONOURABLE MR.JUSTICE K.J.THAKERDate : 27/11/2014ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.Mr. M.M. Bhatt, learned senior advocate appears with Ms. Bhatt, learned advocate for the appellant. 2.By way of this appeal, the appellant-revenue has challenged the order dated 03.07.2009 passed by the Income Tax Appellate Tribunal [for short “the Tribunal”] in ITA No. 1927/Ahd/2006, whereby the appeal filed by the revenue was dismissed by the Tribunal. 3.The facts of this case are that the assessee filed its return for the Assessment Year 2001-02 on 29.01.2001 and declared a loss of Rs.23,129/-. The return was processed under Section 143(1) of the Income Tax Act. The Assessing Officer took the view that the assessee had violated the provisions of Section 269T of the Act and therefore, was liable to penalty under Section 271E of the Act. The jurisdiction to impose the penalty vested with the Additional Commissioner of Income Tax therefore, the matter was referred to him. The Additional Commissioner of Income Tax issued a show cause notice. In response to the show cause notice, the assessee filed its reply. However, the Additional Commissioner of Income Tax did not accept the reply of the assessee and imposed a penalty of Rs.56,14,066/- on the assessee. 3.1.Aggrieved by the order of the Additional Commissioner of Income Tax, the assessee filed an O/TAXAP/2525/2009 JUDGMENT appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee and cancelled the penalty imposed on the assessee. Being aggrieved by the same, the revenue filed an appeal before the Tribunal. The Tribunal vide impugned order dated 03.07.2009 dismissed the appeal of the revenue. Hence, this appeal is filed at the instance of the revenue. 4.In the present appeal, the following question of law is proposed to be raised:- “Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT(A) in deleting the penalty of Rs.56,14,066/- levied u/s. 271E of the Act ?” 5.Learned senior advocate for the appellant has drawn our attention to the fact that the issue involved in this appeal is already concluded by the decision of this Court rendered in Tax Appeal No.2074 of 2009. 4.In the present appeal, the following question of law is proposed to be raised:- “Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT(A) in deleting the penalty of Rs.56,14,066/- levied u/s. 271E of the Act ?” 5.Learned senior advocate for the appellant has drawn our attention to the fact that the issue involved in this appeal is already concluded by the decision of this Court rendered in Tax Appeal No.2074 of 2009. 6.We have heard learned senior advocate for appellant and perused the material on record. We have also perused the decision of this Court relied upon by learned senior advocate for the appellant rendered in Tax Appeal No.2074 of 2009 where question of law raised was similar to the question of law raised in this appeal. Relevant paragraphs of the said decision reads as under:- We, however, find that the CIT [A] in its Order observed that there is no dispute regarding genuineness of the transactions, and the source of funds are proved and are not doubted. It was further observed that the sale and purchase were cancelled after two-three years on account of earthquake and such time gap cannot suggest that the appellant's claim of purchase and sale of the flats earlier was not genuine. We, therefore, believe that the receipt of cash against the sale of flats and payment of cash against the purchase of the flats was not within the purview of loan or deposit, and therefore, not in violation of Section 271T of the Act. No penalty under Section 271E of the Act, therefore, could have been imposed. The Tribunal also concurred with the view of the CIT [A] observing that the Assessing Officer simply doubted the transactions for purchase and sale but did not bring any evidence on record that the transactions were not genuine. The Tribunal further observed that the transactions for purchase and sale of the properties cannot be regarded to be transactions for receiving or advancing the loan. We find that CIT [A] as well as Tribunal found on facts that the amounts received on sale of flats cannot be regarded to be transactions for receiving or advancing the loan, the same did not breach Section 269T transactions for receiving or advancing the loan, the same did not breach Section 269T of the Act. In the result, no substantial question of law arises. Tax Appeal is dismissed. 7.In view of the aforesaid, we concur with the findings recorded by the earlier Division Bench. Even otherwise, the Tribunal has given cogent and convincing reasons in arriving at the conclusion. After considering facts and circumstances of the case the Tribunal has rightly held that the assessee had not violated the provisions of Section 269T of the Income Tax Act, which would attract the penalty under Section 271E of the Act. Therefore, we do no find find any reason to interfere with the order of the Tribunal. We are in complete agreement with the view taken by the Tribunal. 8.In that view of the matter, we are of the considered view that the present appeal deserves to be dismissed and the same is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) pawan