TMI Blog2003 (2) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer noticed that the assessee had raised the following loans/deposits : Mrs. Shrimati Agarwal 31-12-1991 JR 5 7,000 1-4-1991 Op. bal. 1,93,751 31-3-1992 Bal. c/d 3,38,936 30-4-1991 B.R. 20 15,000 1-4-1991 JR-4 1,00,000 31-3-1992 JR-9, Intt. 37,185 3,45,936 3,45,936 Mrs. Sunita Agarwal R Bal. c/d 1,18,000 1-4-1991 Op. bal. 1,00,000 31-3-1992 Intt. 18,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 1,00,000 31-3-1992 JR-7 3,000 31-3-1992 Bal. C/d 1,90,208 31-3-1992 JR-8 48,589 31-3-1992 JR-9 15,933 6,72,633 6,72,633 4. The Assessing Officer while imposing the penalty under section 271D of the Act has observed that these loans had not been received by account payee cheques or drafts but by mere transfer entries. Section 269SS prohibits receiving of loans through modes other than by account payee cheques or account payee bank drafts. Thus these loans have been raised in contravention of the provisions of section 269SS of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a )Amarnath Agarwal (Karta) ( b )Smt. Shrimati Agarwal (Wife) ( c )Shivraj Agarwal (Son) (Prop. Shivraj Co.) ( d )Smt. Sunita Agarwal (Son s wife) ( e )Risha Agarwal (Son s daughter) ( f )Rini Agarwal (Son s daughter) 8. The assessee (HUF) is carrying on the business in the name of M/s Amar Deep Udyog. Shri Amar Nath Agarwal is the head of the company and had direct control and management of all the business and funds of the family and its members. All the members were owners of the aforesaid family business and were jointly interested in its earnings. Moneys were remitted by account payee DDs of bank, and were credited to the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or deposit. Therefore, there has been no violation of provisions of section 269SS of the Act. In this connection, he has relied on to Explanation ( iii ) to section 269SS of the Act which explains the expression "loan or deposit" to mean loan or deposit of money. He has further mentioned that money has been defined in the Chambers Twentieth Century Dictionary to mean; coin; pieces of stamped metal used in commerce : any currency used as the equivalent of money. He has further referred to the heading of Chapter XXB of Income-tax Act which reads "requirement as to mode of acceptance, payment or repayment in certain cases to counteract evasion of tax". Thus, he has contended that the intention of bringing the provisions of section 269SS i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 972] 83 ITR 26. He has further submitted that if two views are possible then the view which is favourable to the assessee may be accepted. He has further submitted that this is a case where the Tribunal may in exercise of its power under section 254(2D) of the Act impose the cost on Revenue Department as the Department has filed the frivolous appeal. However, we do not find any merit in this submission of the learned Counsel when he has argued that if two views are possible the view favourable to the assessee may be accepted. He has further mentioned that the case relied upon by the learned D.R. is distinguishable on facts. Thus, he has concluded that the learned CIT(A) has rightly cancelled the penalty imposed under section 271D of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept with reference to the word deposit . The legislature has also defined the words loan or deposit as loan or deposit of on money . This clearly shows that this section can be applied only where money passes from one person to another by way of loan or deposit . This provision cannot therefore, be applied where the money does not pass from one person to another but the debt is acknowledged by passing entry in the books of account, depending upon the facts of the case. If the contention of the learned Departmental Representative is accepted, then, it may result in absurdity." 11. Thus, we are of the view that there has been no violation of provisions of section 269SS by the assessee by making the transfer entries from one account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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