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2022 (10) TMI 165 - ITAT MUMBAIPenalty u/s 271D - contravention of provisions of 269SS - Scope of 'reasonable cause' used in Section 273B - CIT-A deleted Penalty levy - HELD THAT:- We find that the CIT(A) had categorically stated in para 6.8.6 of his order that the nature of transactions carried out by the assessee through journal entries in the instant case are not in the form of loan or advance which has been received or repaid and that they are acts of assigning of receivables or extinguishment of mutual liability of paying / receiving the amounts by the assessee and its sister concerns and its sister concerns to third parties. We find that this categorical finding of the ld. CIT(A) has not even been contested by the revenue before us as is evident from the grounds reproduced at the beginning of this order. CIT(A) had given relief to the assessee even on the aspect of reasonable cause by stating that on without prejudice basis, even if the transactions of the assessee fall within the mischief of provisions of section 269SS of the Act, there exists reasonable cause within the meaning of section 273B of the Act. The revenue had challenged the aspect of reasonable cause u/s 273B of the Act before us. Eventhough transactions of one party had been settled by the other party by way of assignment of receivables / payables or for any other reason as detailed supra, we find that all the transactions have been ultimately settled for the difference amount by account payee cheques only. It is not the case of the revenue that the balance amounts lying in each account i.e after adjustment of receivables with payables, were settled by one party to the other party otherwise than by account payee cheques or account payee drafts. Hence it could be safely concluded that there is absolutely no violation of provisions of section 269SS and 269T of the Act in any of the aforesaid transactions carried out by the assessee. Accordingly, the grounds raised by the revenue are dismissed. Penalty u/s 271E - assessee company had carried out certain transactions in contravention of provisions of section 269T - CIT-A deleted Penalty levy - HELD THAT:- It is not in dispute that the loan instalment and interest payable to RFL were duly serviced by the assessee company i.e Macrotech Developers Ltd (Successor to Shreeniwas Cotton Mills Ltd) against the outstanding loan account. Even the said repayment of loans were made only by account payee cheques. Hence there is no contravention of provisions of section 269T of the Act as alleged by the ld. AO in the instant case. Accordingly, we hold that this case is no different from other cases that are before us in the present list. Assessee appeal allowed.
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