THE DIT (EXEMPTIONS)-1 Vs. SOCIAL ACTION FOR RURAL EDUCATION, HEATH & LOVING LIFE OF ABUNDANCE SOCIETY

JUDGEMENT

(1.) THIS appeal by the department is against the order dated 29.11.2013 passed by the Ld. CIT(A) -IV, Hyderabad for the A.Y. 2008 -2009.

(2.) THE department is aggrieved with the decision of the Ld. CIT(A) in deleting the penalty imposed under section 271(E) of the Act. The effective ground raised by the department are as under:

(3.) BEFORE the First Appellate Authority, the assessee producing the audited books of accounts as well as the corrected books of accounts reconciled the mistake in the audited books of accounts. Assessee also produced statement of accounts of the State Bank of India, Kakinada Branch in the name of M/s. Supriya School of Nursing as well as the confirmations obtained from Axis Bank, Himayatnagar Branch, certifying that cheques issued by the assessee amounting to Rs. 8,75,000, Rs. 9,00,000 and Rs. 5,00,000 were credited to the bank account of Smt. Vijay Kumari and Mr. S.S. Prasad 22.01.2008 and 27.03.2008 respectively. The Ld. CIT(A) on considering the submissions of the assessee and going through the evidences produced by the assessee, found that the bank statement of State Bank of India relating to the account of M/s. Supriya Nursing Home as well as certificate issued by Axis Bank, Himayatnagar Branch clearly establish that the repayment of loan to the concerned persons were through cheque. She, therefore, was of the view, as the bank statements are primary documents which form the basis of the entries in the books of accounts, if there is a conflict between the entries in the primary documents and those of the books of accounts, credence must be given to the primary documents. Ld. CIT(A) also disapproved the observations of the Addl. CIT that repayments made through cheques relate to a separate loan and not the loan which is subject matter of penalty proceeding. Accordingly, Ld. CIT(A) deleted the penalty imposed by the Assessing Officer.