9911796707
TMI Blog2003 (4) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... e, these appeals are being decided at the admission stage itself, after they were certified by the Registry as being ready. The appellant, an advocate enrolled and commenced his practice in 1968 at Chalisgaon in Jalgaon district, claims to have specialised in land acquisition cases under the Land Acquisition Act, 1894 ("the Acquisition Act," for short), from 1984 onwards. He claims that his exclusive practice network is spread over in different districts like Jalgaon, Buldhana, Nasik, Dhule, Aurangabad and Thane, etc., with his associates/colleagues being present at each district headquarters. He was an income-tax payer of fifteen years standing. One Shri Vishnu Laxman Patil, who was purportedly one of his associates (advocate's clerk most likely) provided information to the income-tax authorities and consequently a raid and search operation was carried out at his residential and other premises by the Income-tax Department from August 21, 1995, to August 22, 1995, in which various incriminating documents, records were seized. His statement was recorded along with the statement of Shri Vishnu Laxman Patil and others during the course of search. On August 24, 1996, the Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice issued under section 269SS for imposing penalty under section 271D of the Income-tax Act, the Deputy Commissioner of Income-tax, Jalgaon, by his order dated March 24, 1997, confirmed the show cause notice for six assessment years, i.e., yearwise 199091 to 1995-96. These six orders passed separately were challenged in an appeal before the Commissioner of Income-tax (Appeals) at Nashik and by common order dated March 11, 1998, these appeals came to be decided. The Commissioner observed that the assessee had contravened the provisions of section 269SS by obtaining loans otherwise than by account payee cheques or by demand drafts for the assessment years 1990-91 to 1995-96 and, therefore, was liable for penalty under section 271D of the Income-tax Act. However, it was noticed during the course of the appellate proceedings that in the assessment years 1993-94 to 1995-96 even deposits, which were below the ceiling limits of Rs. 20,000 were also taken into consideration. In view of the amendment effected to the provisions of section 269SS with effect from April 1, 1989, the Commissioner (Appeals) directed the Assessing Officer to exclude the amount for these years w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1996, was issued were not made available to the appellant-assessee for a long time and after the copies of the same were served on him he was apprehending that the Assessing Officer, while passing his order dated March 24, 1997, did not verify these documents and the assessment was confirmed mechanically. He further submitted that even when the Commissioner (Appeals) decided these claims on 11th documents. These submissions are required to be considered only for being rejected. The orders of both the authorities below very clearly refer to the documents at serial No. 10 (file containing loose documents loan transactions), 14 (diary styled as inward/outward diary), 15 (file containing various cheques and other loose papers indicating receipts, etc.), 21 (file containing loose documents), 22 (file containing loose papers/cheques/promissory notes, etc.), 42 (register showing money transactions), 44 (register showing money transactions), 45 (register showing money transactions), 46 (register showing money transactions) and 26 (receipt book) of the inventory attached to the panchanama dated August 22, 1995, drawn at the time of search and seizure operation. The said documents have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the strict sense. While interpreting the term "books of account" referred to in sub-clause (1) of Explanation 5 to section 271(1)(c) of the Income-tax Act, a Division Bench of this court in the case of Sheraton Apparels v. Asst. CIT [2002] 256 ITR 20 held that the said term means those books of account whose main object was to provide credible data of accounts and information to file a tax return and it must answer all the qualifications for calculating profit or loss, to depict the financial position of the business; to portray liquidity position; to provide up to date information of assets and liabilities so as to provide a profit and loss account and to have a balance-sheet to determine income and the source thereof. Now coming to the scheme of section 269SS its constitutional validity has been upheld by the apex court in the case of Assistant Director of Inspection (Investigation) v. Kumari A.B. Shanti [2002] 255 ITR 258. 5ections 269SS and 271D of the Income-tax Act read thus: "269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om April 1, 1984, and was made operative from July 1, 1984. The Income-tax Department, in the course of searches carried out from time to time, recovered large amounts of unaccounted cash from the taxpayers who often give explanation to the effect that they had borrowed loans or received deposits from or by other persons. Sometimes it was noticed that unaccounted income was brought into the books of account in the forms of loans and deposits. The Department was not able to unearth such unaccounted cash. In order to plug the loopholes and to put an end to the practice of giving false and spurious explanations by the taxpayers, Parliament sought to introduce a new provision debarring parties from taking or accepting from any other person any loan or deposit. Originally the ceiling amount of cash transaction was at Rs. 10,000 and the same was subsequently increased to Rs. 20,000 with effect from April 1, 1989. Section 27600 stated that if a party-person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be punishable with imprisonment for a term which may extend to two years and shall also be liable to fine to the extent of equal amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipts as well as disbursements. Some computerised statements from the seized documents also indicate that annual interest has been charged by the assessee on purported advances given by him to the higher compensation claimants and almost all these transactions are cash transactions. The said Shri Patil is not a third party. The answers to questions Nos. 3, 4, 5, 6, 7, 8, 9 and 10 given by the assessee during the course of recording his statement by the Enforcement Officer on August 22, 1995, are self-speaking and did not leave any scope for the assessee who is a legally trained mind to take any substantial or material defence. Having given our anxious consideration to all the issues raised before us by the assessee and the concurrent findings recorded by the authorities below we do not find any merit in these appeals and no case is made out to take a view different than that of the Commissioner (Appeals). In the result, these appeals fail and they are hereby dismissed by confirming the orders passed by both the appellate authorities below. No costs. In view of final disposal of these appeals, the notices of motion/civil applications in all these appeals, if any, stand dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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