- (1.) THE present appeal is under Section 260 -A of the Income Tax Act. 1961 (hereinafter referred to as 'the Act') and is directed against the order dated 8 -4 -1999 passed by the Income Tax Appellate Tribunal 'A' Bench. Allahabad in I.T.A. No. 941/Alld./1993 for the Assessment Year 1990 -91.
(2.) THE facts of the case lie in a narrow compass. The appellant is carrying on the business of silk fabric. One Sanjay Kumar Agrawal asked Shree Narain and Gopal Das, brokers of silk fabrics for the supply of special kind of silk fabrics. These brokers placed order with the appellant for the supply of required quantity of silk fabrics which was otherwise not easily available in the market. The assessee demanded a sum of Rs. 25,000/ - from both the brokers towards advance for the supply of required quantity of silk fabrics. Likewise, other brokers Jai Kishan and Krishna Kumar deposited a sum of Rs. 25,000/ - towards advance for supply of required quantity of silk fabrics. The appellant could not arrange the required silk fabrics and, therefore, returned the deposit by making cash payment. In the assessment proceedings, the Assessing Officer noted the following trade deposits found in the assessee's books of account: Name of Brokers Amount Date of Date of return Receipt Return (i) Gopal Das 25,000/ - 11 -7 -89 20 -2 -90 Bhaironath (ii) Kishan Kumar Rani Bhawani Gali, 25,000/ - 11 -7 -89 2 -3 -90 Varanasi (iii)Narayan Das 25,000/ - 10 -7 -89 20 -2 -90 Prahlad Ghat Varanasi (iv)Jai Kishan 25,000/ - 10 -7 -89 2 -3 -90 Chowk, Varanasi The explanation furnished by the assessee that the brokers have not deposited the money on their accounts but on behalf of the other traders was not accepted and the Assessing Officer concluded that the advances cannot be treated as sale with reference to their capacity also and the entire sum of Rs. one lac was added to the income, by the order dated 29 -5 -1992. A penalty under Section 271E read with Section 269 T of the Act by the Deputy Commissioner of Income Tax, Varanasi Range, Varanasi to the tune of Rs. one lac, equal to the amount of deposit so repaid was imposed, by the order dated 25 -3 -1992. On appeal at the instance of the assessee, the Commissioner of Income Tax (Appeals), by the order dated 19 -2 -1993, allowed the appeal on the ground that the word 'deposit' stipulates that a person keeps his money for earning interest with a person or a Bank and the words 'deposit of any nature' does not cover up normal transaction of trade, as in the case of the appellant was. It was held that the provisions of Section 269T were not attracted and consequently the penalty could not be levied. The said order was challenged successfully by the Department before the Income Tax Appellate Tribunal in further appeal. The Tribunal took the view that Section 269T is applicable to every kind of deposit and there is no difference between a 'trade deposit' or 'business deposit' or 'deposit', by the order under appeal. It allowed the Revenue reappeal. Hence, the present appeal is at the instance of the assessee. The appeal was admitted on the following questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is legally justified in confirming the penalty Under Section 271 -E at Rs. 1,00,000/ -? 2. Whether the view of the Tribunal is legally correct that the provision of Section 269 -T is applicable to the trade advance also? Whether the Tribunal is legally correct in disputing the nature of deposit as trade advance while there was no dispute in this regard? 3. Sri V.B. Upadhyay, learned Senior Counsel for the appellant submits that the word 'deposit' contemplated under Section 269T does not include 'trade deposit', therefore, the said Section is not attracted and consequently, the levy of penalty under Section 271 -E of the Act for violation of provisions of Section 269T is invalid. The words 'deposit of any nature' in the definition of 'deposit' occurring in Clause (ii) of Explanation to Section 269T of the Act as amended by Direct tax Laws (Amendment) Act, 1987, relevant to the assessment year in question, should be interpreted in a narrow sense. The doctrine of "ejusdem generis" shall be applicable while giving a meaning to word 'deposit'. 'Deposit' and 'loan' are two different connotations in legal parlance as has also been judicially held by various pronouncements beginning with (Nawab Major Sir) Mohd. Akbar Khan v. Attar Singh and Ors., AIR 1936 PC 171; Ram Janki Devi and Anr. v. : [1971]3SCR573 . Reliance was also placed on few decisions under the Income Tax Act pointing out the marked difference in between 'loan' and 'deposit'. The sum and substance of the argument is that the 'deposit' as contemplated under Section 269T will not include 'trade deposit', like the assessee's case. It was submitted that the finding recorded by the Tribunal with regard to the nature of deposit is vitiated as the Tribunal has failed to take into account the fact that the additions made by the Assessing Officer under Section 68 of the Income Tax was not sustained and was deleted. The penalty proceeding initiated under Section 269SS against the persons (sic) who made the deposit has also been set aside. If all these facts are taken into account, the Tribunal was not correct in holding that the nature of deposit, in the case on hand, was not a 'trade deposit)
(3.) SRI Bharatji Agrawal, learned Senior Counsel and also Senior Standing Counsel for the Department along with Sri A.N. Mahajan learned Standing Counsel for the Department, submits that Section 2691 provides a specific mode of repayment of certain deposit either through Bank Draft or cheque for the amount above the ceiling limit prescribed therein. The violation of the said provision will attract the penalty. The fact that the transaction was bonafide, genuine or was of doubtful nature or otherwise is not at all germane so far as the applicability of Section 269T is concerned. The word 'any' in the Explanation to Section 269 is wide enough to cover all kinds of deposit within its sweep. It is not the case of the Department nor of the assessee that the transaction in question was in the nature of 'loan', therefore, the distinction in between 'loan transaction' and 'deposit' is not at all material for the purpose of the present case, submits the learned Senior Counsel. Referring to para -3 of the memo of appeal, he submits that the assessee himself treated the transaction in question as 'deposit'. The findings recorded by the Tribunal are findings of fact and they are not vitiated and are binding on this court as the Tribunal is the last fact finding authority. An appeal under Section 260A of the Act lies on a substantial question of law and in the present case no substantial question of law is involved. Considered the respective submissions of the learned Senior Counsel for the parties and perused the record. It is apt to consider questions No. 1 and 2 simultaneously as they are interlinked and interwoven.;