O/TAXAP/2525/2009 JUDGMENT IN 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 judgment ? 2 To be referred to Reporter or not ? 3 Whether their Lordships wish to see fair copy of judgment ? 4 Whether this case involves substantial question of law as to interpretation of Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to civil judge ? COMMISSIONER OF INCOME TAX-III....Appellant(s) Versus RITU RAYON PRIVATE LIMITED....Opponent(s) Appearance: MRS MAUNA M BHATT, ADVOCATE for Appellant(s) No. 1 CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 27/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) Page 1 of 5 Downloaded on : Sat May 16 15:17:44 IST 2020 O/TAXAP/2525/2009 JUDGMENT 1. Mr. M.M. Bhatt, learned senior advocate appears with Ms. Bhatt, learned advocate for appellant. 2. By way of this appeal, appellant revenue has challenged order dated 03.07.2009 passed by Income Tax Appellate Tribunal [for short Tribunal ] in ITA No. 1927/Ahd/2006, whereby appeal filed by revenue was dismissed by Tribunal. 3. facts of this case are that assessee filed its return for Assessment Year 2001 02 on 29.01.2001 and declared loss of Rs.23,129/ . return was processed under Section 143(1) of Income Tax Act. Assessing Officer took view that assessee had violated provisions of Section 269T of Act and therefore, was liable to penalty under Section 271E of Act. jurisdiction to impose penalty vested with Additional Commissioner of Income Tax therefore, matter was referred to him. Additional Commissioner of Income Tax issued show cause notice. In response to show cause notice, assessee filed its reply. However, Additional Commissioner of Income Tax did not accept reply of assessee and imposed penalty of Rs.56,14,066/ on assessee. 3.1. Aggrieved by order of Additional Commissioner of Income Tax, assessee filed Page 2 of 5 Downloaded on : Sat May 16 15:17:44 IST 2020 O/TAXAP/2525/2009 JUDGMENT appeal before CIT(A). CIT(A) allowed appeal of assessee and cancelled penalty imposed on assessee. Being aggrieved by same, revenue filed appeal before Tribunal. Tribunal vide impugned order dated 03.07.2009 dismissed appeal of revenue. Hence, this appeal is filed at instance of revenue. 4. In present appeal, following question of law is proposed to be raised: Whether Appellate Tribunal is right in law and on facts in confirming order passed by CIT(A) in deleting penalty of Rs.56,14,066/ levied u/s. 271E of Act ? 5. Learned senior advocate for appellant has drawn our attention to fact that issue involved in this appeal is already concluded by decision of this Court rendered in Tax Appeal No.2074 of 2009. 6. We have heard learned senior advocate for appellant and perused material on record. We have also perused decision of this Court relied upon by learned senior advocate for appellant rendered in Tax Appeal No.2074 of 2009 where question of law raised was similar to question of law raised in this appeal. Relevant paragraphs of said decision reads as under: Page 3 of 5 Downloaded on : Sat May 16 15:17:44 IST 2020 O/TAXAP/2525/2009 JUDGMENT We, however, find that CIT [A] in its Order observed that there is no dispute regarding genuineness of transactions, and source of funds are proved and are not doubted. It was further observed that sale and purchase were cancelled after two three years on account of earthquake and such time gap cannot suggest that appellant's claim of purchase and sale of flats earlier was not genuine. We, therefore, believe that receipt of cash against sale of flats and payment of cash against purchase of flats was not within purview of loan or deposit, and therefore, not in violation of Section 271T of Act. No penalty under Section 271E of Act, therefore, could have been imposed. Tribunal also concurred with view of CIT [A] observing that Assessing Officer simply doubted transactions for purchase and sale but did not bring any evidence on record that transactions were not genuine. Tribunal further observed that transactions for purchase and sale of properties cannot be regarded to be transactions for receiving or advancing loan. We find that CIT [A] as well as Tribunal found on facts that amounts received on sale of flats cannot be regarded to be transactions for receiving or advancing loan, same did not breach Section 269T of Act. In result, no substantial question of law arises. Tax Appeal is dismissed. 7. In view of aforesaid, we concur with findings recorded by earlier Division Bench. Even otherwise, Tribunal has given cogent and convincing reasons in arriving at conclusion. After considering facts and Page 4 of 5 Downloaded on : Sat May 16 15:17:44 IST 2020 O/TAXAP/2525/2009 JUDGMENT circumstances of case Tribunal has rightly held that assessee had not violated provisions of Section 269T of Income Tax Act, which would attract penalty under Section 271E of Act. Therefore, we do no find find any reason to interfere with order of Tribunal. We are in complete agreement with view taken by Tribunal. 8. In that view of matter, we are of considered view that present appeal deserves to be dismissed and same is dismissed. (K.S.JHAVERI, J.) (K.J.THAKER, J) pawan Page 5 of 5 Downloaded on : Sat May 16 15:17:44 IST 2020 Commissioner of Income-tax-III v. Ritu Rayon Private Limited