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TMI Blog2015 (11) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... gal position therein it was canvassed that the penalty order may be quashed. 3. The Ld.Sr.DR relying upon the impugned orders stated that the departmental stand is supported by the decision of the Hon'ble Jharkhand High Court in Bhalotia Engineering Works (P.) Ltd. vs CIT (2005) 275 ITR 399 relied upon by the CIT(A) canvassed that the appeals of the assessee may be dismissed as on facts violations of the relevant provisions stands demonstrated on facts. It was also her stand addressing the case law relied upon by the Ld.AR that facts in each case are different and in the peculiar facts of the present case the decision of the Hon'ble Jharkhand High Court is fully applicable. 4. Accordingly in view of the above stated stand of the parties, it is considered appropriate to first bring out the facts and the arguments thereon briefly in each of these appeals:- ITA No.856/Del/2014 5. The assessee in ITA No.856/Del/2014 assails the correctness of the order dated 19.12.2013 of CIT(A)-XXXI, New Delhi pertaining to 2006-07 assessment year wherein the penalty imposed by the Assessing Officer u/s 271D of the Income tax Act, 1961 has been upheld in appeal by the CIT(A). 5.1. The com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs Raugmini Ram Raghav Spinners (P.) Ltd 304 ITR 417 (2008) (Mad.); 9. CIT vs Speedways Rubber (P.) Ltd. 326 ITR 31 (Punjab & Haryana High Court); 10. CIT vs Kardah Lexoplast (P.) Ltd. [ITA No.-184/99] (Allahabad High Court) 6.1. Accordingly relying upon the aforesaid decisions it was submitted that if for a moment it is considered that there is a decision of the Hon'ble Jurisdictional High Court in the case of Bhalotia Engineers Works (P.) Ltd. (cited supra) than considering the plethora of decisions cited before the AO and the CIT(A) there was a difference of opinion which stood established thus relying upon the judgement of the Apex Court in the case of CIT vs Vegetables Products Ltd. 88 ITR 192 (SC) the benefit of decisions in favour of the assessee should have been given by the tax authorities. The said proposition it was submitted had been upheld by the Hon'ble Delhi High Court in the case of CIT vs I.P.India P.Ltd. 343 ITR 353 (Del.) and it was cited before the CIT(A) and in judicial propriety it should have been followed as being the decision of the Jurisdictional High Court it was binding on the tax authorities. The CIT(A) it was submitted by not following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances was relied upon. In these circumstances, it was his submission that on facts where the assessee was under bonafide belief that borrowing of cash from a sister concern to tide over the financial urgency which at that point of time was contemplated would be adjusted by allotting share application money and ultimately it was repaid by cheque on 22.06.2007. In these circumstances, it was his submission that the penalty deserves to be quashed. 6.4. It was further submitted that on facts the decision of the Hon'ble Jharkhand High Court in Bhalotia Engineering Works Ltd. (cited supra) was distinguishable. ITA No.785/Del/2014 7. In ITA No.785/Del/2014 the assessee assails the correctness of the order dated 19.12.2013 of CIT(A)-XXXI, New Delhi pertaining to 2005-06 assessment year again wherein as a result of the same search proceedings u/s 132 in the Rajdarbar Group of companies, the assessee was required to file a return. The AO vide order dated 31.11.2010 u/s 153 r.w.s 143(3) accepted the NIL return filed by the assessee. However, in regard to the receipt of cash as share application money from a sister concern M/s Gagan Buildwell Pvt. Ltd for similar reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee assails the order dated 19.12.2013 of CIT(A)-XXXI, New Delhi pertaining to 2007-08 assessment year wherein also it was pleaded that the AO has accepted the transaction as genuine as no addition u/s 68 has been made. This fact it was submitted is found recorded at page 2 of the impugned order. The receipt of Rs. 4 lacs cash as share application money from M/s. Fortune Buildwell Pvt. Ltd. a sister concern was accepted due to a peculiar position. Inviting attention to para 3 of the impugned order it was pleaded that the need arose due to commercial expediency as there was a deadline for registering and execution of sale deed for land at Nadri Sonari. Herein also it was submitted the agreement had been entered into for purchase of land with the agriculturists and the amount was utilized for making payments towards court fee and stamp duty etc. Herein also originally the intention was to adjust the receipt in cash by way of share application however, the amount as per record it was submitted was returned by cheque on 16.06.2010. Accordingly it was his submission the penalty has wrongly been imposed and upheld. ITA No.-855/Del/2014 10. In ITA No.-855/Del/2014, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt that there is a cleavage of judicial opinion on the point of reasonable cause u/s 273B thus following the judicial precedent by applying the judgement of the Hon'ble Supreme Court in the case of CIT vs Vegetables Products Ltd. (cited supra), I am of the view that the penalty imposed in each of these cases deserves to be quashed. Nothing has been brought on record by the Revenue to show that the assessee as a result of his business and interactions with the department in the earlier years had been made aware that accepting and repaying in cash to sister concerns in order to tide over financial emergencies were in violation of the provision of the Act. In the absence of any such evidence the plea of bonafide belief in the peculiar circumstances cannot be discarded. It is seen that the assessee has consistently canvassed that there was a bonafide belief that the amount taken from the sister concern in cash is not a violation of any provision. Similarly for the purposes of ITA No.855/Del/2014 the return of loan by cash to the sister concern under a bonafide belief that the transaction with sister concerns is not in violation for similar reasons in the absence of any evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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