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TMI Blog2019 (9) TMI 1623X X X X Extracts X X X X X X X X Extracts X X X X ..... there exited reasonable cause for accepting the loans by way of journal entries and thus do not find any infirmity in the order of ld. CIT(A). Since the case of the assessee is fully covered as discussed above, we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the revenue. - ITA No.7123, 7130 & 7133/M/2016 in CO No.207/M/2018 - - - Dated:- 13-9-2019 - SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER Appellant by : Shri Vijay Mehta, A.R. Respondent by : Shri Manoj Kumar Singh, D.R. Shri S. Abhirama Kaartikeyan, D.R ORDER Per Rajesh Kumar, Accountant Member: The above titled appeals and cross objections have been preferred against the orders dated 15.09.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2008-09, 2009-10 2011-12. 2. Since the facts and issues involved therein are identical in nature, hence the same are heard together and are being disposed of by this common order. 3. For the sake of convenience, the grounds from ITA No.7123/M/2016 A.Y. 2011-12 of Revenue s appeal are taken which are reproduced as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 269T by repaying loans by way of journal entries and thus levied penalty of ₹ 173,56,50,689/- under section 271E vide order dated 10.09.2014. The Ld. CIT(A) allowed the appeal of the assessee by observing and holding as under: 5.4.4 Respectfully, following the above decision, the contention of the appellant that the journal entries are not covered within the provisions of Section 269T is rejected. However, the transactions covered by the journal entries are made in regular course of business with the sister concerns by the appellant. Even in the present case, there is no adverse finding of the AO either in the penalty order u/s 271E of the Act or in the remand report dated 09.08.2016 that any of the impugned transactions is aimed at non commercial reasons and outside the normal business operation. Therefore, though the appellant has violated the provisions of section 269T of the Act in respect of Journal entries, it has shown reasonable cause and therefore the penalty under section 271E is not leviable. 6. The Ld. A.R., at the outset submitted that the issue involved in the present appeal is squarely covered by the decision of the co-ordinate bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in assessee s own case in ITA No.6608/M/2016 A.Y. 2011-12 wherein the co-ordinate bench of the Tribunal has held as under: 5. We have heard the argument advanced by the Ld. Representative of the parties and perused the material available on record. The Ld. Representative of the revenue has argued that the CIT(A) has wrongly deleted the penalty, therefore, the finding of the CIT(A) is wrong and against law and facts and is liable to be set aside. However on the other hand, the Ld. Representative of the assessee has refuted the said contention. At the outset, the learned AR of the assessee submits that the grounds of appeal raised by revenue is covered in favour of assessee by the decision of Hon ble jurisdictional High Court in assessee s group cases in CIT Vs AjinathHitech builders Private Limited others in ITA s No. 171, 172, 202, 2.3, 218 and 219 of 2015 dated 06th February 2018 and further by the decision of coordinate bench of Tribunal in CIT versus Aasthavinayak Estate Company Ltd ( ITA No. 602/M/ 2017 dated 31 May 2018 and CIT Vs National Standard India Ltd ( ITA No.6607/M/2016 and 6609/M/2016 dated 6th June 2018, therefore, the CIT(A) has passed the order judiciously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade tax. The finding of the CIT(A) is based upon the decision of Bombay High Court in the assessee s sister concern case title as CIT Vs AjinathHitech builders Private Limited others in ITA s No. 171, 172, 202, 2.3, 218 and 219 of 2015 dated 06th February 2018. The ratio of other judgments relied by the assessee is also applicable to the facts and circumstances of the present case. The assessee relied upon the other judgments such as CIT versus Aasthavinayak Estate Company Ltd ( ITA No. 602/M/ 2017 dated 31 May 2018 and CIT Vs National Standard India Ltd ( ITA No. 6607/M/2016 and 6609/M/2016 dated 6th June 2018. Further, it also came into noticed that the case of the assessee pertains to the A.Y. of 2012-13, therefore, the ratio of decision in case title as CIT Vs Trump International (I) Ltd dated 12 June 2012 (345 ITR 270)/ [22 Taxmann.com 138(Bom)] is not applicable. Accordingly, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Resultantly, the appeal of the revenue is hereby ordered to be dismissed. 6. Cross-objection Since the matter of controversy has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present facts. This is so as the Tribunal holds that the failure to comply with Section 269SS of the Act was on account of reasonable cause on the part of the respondents. This finding of reasonable cause was on the application of parameters laid down by this Court in Triumph International Finance (supra) to determine reasonable cause for not complying with the provisions of Section 269SS of the Act. (c) Mr. Mohanty, the learned Counsel for the Revenue seeks to challenge the impugned order of the Tribunal on the ground that Section 273B of the Act will have no application as the test of reasonable cause is not satisfied in the present facts for the following reasons :- (i) the decision of this Court in Triumph International Finance (supra) will have no application as that was of the case of only one transaction while in this case, there are numerous transactions reflected through the passing of journal entries; (ii) the reasons set out for taking advances / deposits by way of journal entry would not satisfy the test of reasonable cause; and (iii) the non-satisfaction of showing reasonable cause as required under Section 273B of the Act gives rise to a question of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd / or issue of interpretation is to be made. The decision relied upon by the Revenue in case of Premier Breweries Ltd. (supra) concerned itself with the issue of a claim for deduction under Section 37 of the Act on the basis of the Agreements entered into between the parties. The inference of law in that case was whether on the facts, it could be inferred that the claim for deduction is in respect of expenditure incurred wholly and exclusively for the purposes of the business. Thus, it would involve a question of interpretation of the agreements etc. from which an inference is to be drawn. Further, it also involves application of principles of law to the facts for the purposes of deductions and, therefore, it would lead to a question of law. Therefore, the Court held in the facts of that case that a question of law does arise. (f) In this case, the issue of reasonable cause is an inference of fact from facts and, therefore, a question of fact. The Supreme Court decision in Sree Meenakshi Mills Ltd. Vs. Commissioner of Income Tax, 31 ITR 28 had laid down the tests to determine a question of law and / or fact. In the above context, the Court observed that when the finding is one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bridge Co. Ltd. (supra) were holding the field. Thus, not in breach of Section 269SS of the Act. In the above view, while agreeing with the submission of Mr. Mohanty, learned Counsel for the appellant that the decision of this Court in Triumph International Finance (supra) has only clarified / stated the position as always existing in law, the receiving of deposits / loans through journal entries would certainly be hit by Section 269SS of the Act. Nevertheless, prior to the decision of this Court in Triumph International Finance (supra), there was reasonable cause for respondents to receive deposit / loan through journal entries. This non-compliance with Section 269SS of the Act would certainly be a reasonable cause under Section 273B of the Act for nonimposition of penalty under Section 271D of the Act. (j) In the above circumstances, the view taken by the Tribunal in the impugned order holding that no penalty can be imposed upon the respondents as there was a reasonable cause in terms of Section 271B of the Act for having received loans / deposits through journal entries is at the very least is a possible view in the facts of the case. (k) Therefore, the question as posed d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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