C.Devaraj, Ootacamund vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, CHENNAI ी ए. मोहन अलंकामणी, लेखा सद य एवं ी वी. दग ु ा# राव, या$यक सद य केसम%

BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER

आयकर अपील सं./ITA No. 2715/Mds/2014 $नधा#रण वष# /Assessment Year : 2006-07

The Assistant Commissioner of Shri C. Devaraj, Income Tax, M/s Sri Murugan Traders, Circle - I(1), v. C.D. Chambers, Mount Road, Christo Building, 2nd floor, Coonoor - 643 102. Bank Road, Ootacamund - 643 001. PAN : ADMPD 3484 E (अपीलाथ*/Appellant) (+,यथ*/Respondent)

अपीलाथ* क- ओर से/Appellant by : Sh. P. Radhakrishnan, JCIT +,यथ* क- ओर से/Respondent by : Sh. V.S. Jayakumar, Advocate

सन ु वाई क- तार ख/Date of Hearing : 28.01.2015 घोषणा क- तार ख/Date of Pronouncement: 20.02.2015

आदे श /O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

This appeal filed by the Revenue is directed against the

order of the Commissioner of Income Tax (Appeals)-I, Coimbatore,

dated 26.08.2014 relevant to the assessment year 2006-07. 2 I.T.A. No. 2715/Mds/14

2. Facts are in brief that the assessee had filed return of

income by declaring a total income of ` 8,23,131/-. The

assessment was completed under Section 143(3) of the Income-tax

Act, 1961 (in short 'the Act'). The assessee has filed an audit report

in Form 3CB along with the return of income. On examination of the

audit report by the A.O., it is revealed that in Column No.24, sub-

column (a), (b), & (c), the auditor has mentioned NIL transaction.

However, examination of the balance sheet filed along with the

return of income revealed that the assessee has reduced his liability

under the head "Unsecured Loan". For previous year, loan was:-

(a) Dr. Ramamoorthy : ` 70,000 (b) Mr. V. Ravichandran : ` 4,68,414 (c) Mrs. Vimala Devaraj : ` 17,70,673 (d) Mr. V.K. Ravidass : ` 1,50,000 TOTAL : ` 24,59,087

Whereas for this year, it has reduced as below:-

(a) Dr. Ramamoorthy : ` 70,000 (b) Mr. V. Ravichandran : - (c) Mrs. Vimala Devaraj : ` 15,14,140 (d) Mr. V.K. Ravidass : ` 50,000 TOTAL : ` 16,34,140

Accordingly, the A.O. has come to a conclusion that the assessee

has made repayment to those parties. Therefore, Section 269SS of

the Act applicable to the assessee's case. However, the audit

report furnished by the assessee does not contain any information 3 I.T.A. No. 2715/Mds/14

on repayment of loan, i.e. whether repayment was made in cash or

any other mode than account payee cheque. Therefore, notice

under Section 271E was issued to the assessee. The assessee

has not responded to the said notice. Therefore, the A.O. issued

notice to the concerned bank. From the reply given by the bank,

based on the bank account statement, the A.O. has come to a

conclusion that the assessee has violated the provisions of Section

269T of the Act. Accordingly, penalty was levied.

3. The assessee carried the matter in appeal before the Ld.

CIT(Appeals). During the course of appellate proceedings, the

assessee has filed Vijaya Bank Account of M/s Sri Murugan Traders

wherein an amount of ` 1,00,000/- was repaid to Shri V.K. Ravidass

by account payee cheque to reduce the liability in the case of Shri

V.K. Ravidass. Similarly, in the case of Smt. Vimala Devaraj, an

amount of ` 5,00,000/- was repaid on 28.02.2006 by reducing the

liability by ` 5,00,000/-. There was also an interest credit in the

case of Smt. Vimala Devaraj as on 31.03.2006 amounting to `

2,43,467/- leaving the balance of ` 15,14,140/-. In the case of Shri

V. Ravichandran also, a cheque payment was made on 23.02.2006

in Indus Ind Bank, Coonoor. The assessee has produced the

details of bank accounts along with the ledger before the Ld. 4 I.T.A. No. 2715/Mds/14

CIT(Appeals). The Ld. CIT(Appeals), after considering the detailed

explanation given by the assessee, the bank statements and ledger,

has given his finding that - "It is very clear from the bank accounts

that the unsecured loans were reduced through account payee

cheques." By observing the above, the Ld. CIT(Appeals) directed

the A.O. to delete the penalty.

4. Even before us, the assessee filed a paper-book of which

pages 2,3,4,5 & 6 show that payments were made by the assessee

through bank accounts. In view of this, we find no infirmity in the

order passed by the Ld. CIT(Appeals).

5. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced on Friday the 20th of February, 2015 at

Chennai.

Sd/- sd/- (ए. मोहन अलंकामणी) (वी. दग ु ा# राव) (A. Mohan Alankamony) (V. Durga Rao) लेखा सद य/Accountant Member या$यक सद य/Judicial Member

चे नई/Chennai, th =दनांक/Dated, the 20 February, 2015.

Kri. 5 I.T.A. No. 2715/Mds/14

आदे श क- +$त?ल@प अAे@षत/Copy to: 1. अपीलाथ*/Appellant 2. +,यथ*/Respondent

3. आयकर आयुBत (अपील)/CIT(A)-I, Coimbatore

4. आयकर आयुBत/CIT-II, Coimbatore

5. @वभागीय +$त$न ध/DR

6. गाड# फाईल/GF.