DCIT v. Platinum Towers (P) Ltd.

Case Laws Analysis
REFERRED Pr. CIT v. Aman Sharma 2023 TaxPub(DT) 1266 (P&H-HC)
REFERRED K.S. Chawla & Sons (HUF) v. JCIT 2019 TaxPub(DT) 5851 (Del-Trib)
REFERRED CIT v. R.P. Singh & Co. (P) Ltd. 2012 TaxPub(DT) 0673 (Del-HC)
REFERRED CIT v. Standard Brands Ltd. 2006 TaxPub(DT) 1722 (Del-HC)
REFERRED Assistant Director of Inspection (Investigation) v. Kum. A.B. Shanthi 2002 TaxPub(DT) 1375 (SC)
REFERRED Chamundi Granites (P) Ltd. v. Deputy CIT & Anr. 1999 TaxPub(DT) 1335 (Karn-HC)

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The Tax Publishers2024 TaxPub(DT) 805 (Del-Trib) IN THE ITAT DELHI SH. C. N. PRASAD, J.M. & DR. B. R. R. KUMAR, A.M. DCIT v. Platinum Towers (P) Ltd. ITA No. 1307/Del/2020 5 January, 2024 Appellant : Parikshit Agarwal, CA Respondent : Vivek Vardhan, Sr. DR ORDER *Dr. B. R. R. Kumar, A.M.* The present appeal has been filed by the Revenue against the order of Learned commissioner (appeals)-3, Gurgaon, dated 16-3-2020 for the assessment year 2013-14. 2. The Revenue has raised the following grounds of appeal are as under:- i) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty under section 271D of the Act relying on the order of the Hon'ble ITAT wherein it was held that the payment of Rs. 2,00,00,000 made by M/s Spaze Towers Put. Ltd. to the assessee was not a loan transaction made in contravention of the provisions of section 269SS of the Income Tax Act. ii) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals)has erred in deleting the penalty under section 271D of the Act despite the fact that from the funds flow submitted by Ms Spaze Tower Pvt. Ltd. before the Hon'ble Settlement Commission it is evident that M/s Spaze Tower Pvt. Ltd. had discharged the liabilities of the assessee by making payments in cash which is violation of the provisions of section 269SS of the Act. iii) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that since M/s Spaze Towers Pvt. Ltd. incurred expenditure towards the personal needs of the directors/promoters, the same was acknowledged as liability by them but the same cannot be construed as loan or deposit despite admission of the assessee before thecommissioner (appeals) in quantum appellate proceedings that these cash transactions were made between two separate entities on returnable basis as loan/ deposits in violation of the provisions of section 269SS of the Act. iv) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that penalty us 271D is without any satisfaction and therefore, no such penalty can be levied. 3. A Search and seizure operation under section 132 of the Act was carried out on 17-2-2016 in the case of M/s Spaze Towers Pvt. Ltd. Pursuant to the search proceedings under section 153A of the Act were initiated. The Assessing Officer in the assessment order under section 153A of the Act made addition of the amount in the case of assessee by treating the expenses incurred on Platinum Farm House towards interior/ furniture/ fixtures and are effect by M/s Spaze Towers Pvt. Ltd. and relating to assessee during the year under consideration as income of the assessee. The learned commissioner (appeals) deleted the addition made by the Assessing Officer in the hands of the assessee in view of the Hon'ble ITSC order in the case of Spaze Towers Pvt. Ltd. Thereafter, the Assessing Officer initiated penalty proceedings under section 271D of the Act in the case of the assessee company on the ground that by accepting loans from M/s Spaze Towers Pvt. Ltd., the assessee had violated the provisions of section 269SS of the Act, thereby making him liable for penalty provisions under section 271D of the Act. Penalty under section 271D amounting Rs. 2,00,00,000 was thereafter imposed by JCIT, Central Range, Gurgaon in the case of assessee. The similar issue in one of the cases of the group covered under section 153A stands adjudicated by the Co-ordinate Bench of ITAT Delhi 'D' Bench in the case of K.S. Chawla & Sons (HUF) v. JCIT[ITA No. 5614/Del/2019, dt. 28-8-2019] : 2019 TaxPub(DT) 5851 (Del-Trib) (lead judgment) & others dated 28-8-2019 has adjudicated as under on similar facts in other group cases as hereunder: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 805 (Del-Trib)

IN THE ITAT DELHI

SH. C. N. PRASAD, J.M. & DR. B. R. R. KUMAR, A.M.

DCIT v. Platinum Towers (P) Ltd.

ITA No. 1307/Del/2020

5 January, 2024

Appellant : Parikshit Agarwal, CA

Respondent : Vivek Vardhan, Sr. DR

ORDER

Dr. B. R. R. Kumar, A.M.

The present appeal has been filed by the Revenue against the order of Learned commissioner (appeals)-3, Gurgaon, dated 16-3-2020 for the assessment year 2013-14.

2. The Revenue has raised the following grounds of appeal are as under:-

i) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty under section 271D of the Act relying on the order of the Hon'ble ITAT wherein it was held that the payment of Rs. 2,00,00,000 made by M/s Spaze Towers Put. Ltd. to the assessee was not a loan transaction made in contravention of the provisions of section 269SS of the Income Tax Act.

ii) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals)has erred in deleting the penalty under section 271D of the Act despite the fact that from the funds flow submitted by Ms Spaze Tower Pvt. Ltd. before the Hon'ble Settlement Commission it is evident that M/s Spaze Tower Pvt. Ltd. had discharged the liabilities of the assessee by making payments in cash which is violation of the provisions of section 269SS of the Act.

iii) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that since M/s Spaze Towers Pvt. Ltd. incurred expenditure towards the personal needs of the directors/promoters, the same was acknowledged as liability by them but the same cannot be construed as loan or deposit despite admission of the assessee before thecommissioner (appeals) in quantum appellate proceedings that these cash transactions were made between two separate entities on returnable basis as loan/ deposits in violation of the provisions of section 269SS of the Act.

iv) Whether on the facts and in the circumstances of the case, the Learned commissioner (appeals) has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that penalty us 271D is without any satisfaction and therefore, no such penalty can be levied.

3. A Search and seizure operation under section 132 of the Act was carried out on 17-2-2016 in the case of M/s Spaze Towers Pvt. Ltd. Pursuant to the search proceedings under section 153A of the Act were initiated. The Assessing Officer in the assessment order under section 153A of the Act made addition of the amount in the case of assessee by treating the expenses incurred on Platinum Farm House towards interior/ furniture/ fixtures and are effect by M/s Spaze Towers Pvt. Ltd. and relating to assessee during the year under consideration as income of the assessee. The learned commissioner (appeals) deleted the addition made by the Assessing Officer in the hands of the assessee in view of the Hon'ble ITSC order in the case of Spaze Towers Pvt. Ltd. Thereafter, the Assessing Officer initiated penalty proceedings under section 271D of the Act in the case of the assessee company on the ground that by accepting loans from M/s Spaze Towers Pvt. Ltd., the assessee had violated the provisions of section 269SS of the Act, thereby making him liable for penalty provisions under section 271D of the Act. Penalty under section 271D amounting Rs. 2,00,00,000 was thereafter imposed by JCIT, Central Range, Gurgaon in the case of assessee. The similar issue in one of the cases of the group covered under section 153A stands adjudicated by the Co-ordinate Bench of ITAT Delhi 'D' Bench in the case of K.S. Chawla & Sons (HUF) v. JCIT[ITA No. 5614/Del/2019, dt. 28-8-2019] : 2019 TaxPub(DT) 5851 (Del-Trib) (lead judgment) & others dated 28-8-2019 has adjudicated as under on similar facts in other group cases as hereunder: