TMI Blog2014 (2) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... at the money received is only for the purpose of allotment of shares - there is no material or evidence or any compelling reason produced by the Revenue to prove that the money received is a deposit or loan It is a question of fact and the order of the Tribunal is not a perverse one - The findings given by both the authorities below is based on valid materials and evidence Relying upon CIT Vs. P. Mohanakala [2007 (5) TMI 192 - SUPREME Court] - whenever there is a concurrent finding by the authorities below, no interference should be called for by the High Court thus, there was no error or legal infirmity in the order of the Tribunal Decided against Revenue. - Tax Appeal No.561 of 2013 - - - Dated:- 22-1-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mrs. Mauna M. Bhatt, Adv. For the Respondents : Mr. Tushar P. Hemani, Adv. ORDER (Per : Honourable Mr. Justice Akil Kureshi) 1. This appeal is presented by the Revenue challenging the judgement of the Income Tax Appellate Tribunal dated 14.12.2012 raising the following question for our consideration : Whether the Appellate Tribunal has substantially erred in holding that advances agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 parties the amount aggregating to Rs.15,92,940/was returned to the parties in cash. It is a fact that the amount returned represented the earnest money received by it on sale of units. The assessee has reflected the advance received in its balance sheet and the same has been accepted by the Department in the earlier years. The advances received also included receipt in cash. The amounts refunded did not inlcude any interest. 10. In the case of the CIT vs. Rugmini Ram Ragav Spinners P.Ltd (2008) 304 ITR 417 Hon ble Madras High Court held that the penalty u/s. 271E is not automatic and is to be levied only in the absence of reasonable cause. The rationale behind the provisions of sections 269SS and 269T is to prevent tax evasion, i.e., the laundering of concealed income by parties in the guise of cash loans or deposits in or outside the accounts. The provisions of sections 269SS and 269T therefore have application only in a limited way in respect of deposits or loans. When it is is neither deposit nor loan. The (provisions of section 269SS and 269T have no application at all. 11. The term loan or deposit as per explanation to section 269T means any loan or deposit of money w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E of the Act. The High Court did not accept the contention and made the following observations : 37. Viewed as above, the use of word 'any deposit', in our opinion, has been used to cover all sorts of deposits and 'trade deposit' also. A restricted meaning, as suggested by the learned Senior Counsel for the assessee, if given to exclude the trade deposit, if any within the purview of the words 'any deposit' the very object of the enactment of Section 269T would be frustrated. Not only this, every time a vexed question as to whether the deposit in question is a 'trade deposit' or is a 'deposit' simpliciter would arise and will have to be adjudicated upon by the authorities concerned which will lead to uncertainty as well as it will amount colossal wastage of time and energy both of the assessee as well as of the taxing authorities. Section 269T provides a definite mode of repayment which is also otherwise very convenient in day to day transaction as the payment/repayment by a crossed cheque or Bank Draft evidences the payment itself. It is easy to establish if payment/repayment is made through a Bank Draft or by crossed account payee cheque. 40. We do not find so. We have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, question of refunding the advance may arise. In the present case, the entire advances were returned without interest. 9. We cannot see how at the time when such payments were made, same could be described as either loans or deposits. Section 269T contains an explanation which defines the term loan or deposit in the following manner : loan or deposit means any loan or deposit of money which is repayable after notice or repayable after a period and, in the case of a person other than a company, includes loan or deposit of any nature. 10. What the respondent received from the prospective buyers was advance money simplicitor which was neither a loan nor a deposit even within the meaning of the said term assigned to under section 269T of the Act. When such amount is returned that too without interest, we do not find any applicability of section 269T of the Act. In case of Top Media Entertainment ltd.(supra), this Court had taken such a view also. 11. Even independently section 273B of the Act provides that notwithstanding anything contained in section 271E, no penalty shall be imposable on the person or the assessee as the case may be, for any failure referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use for the said failure." 10. The above section provides that if the assessee proves that there is a reasonable cause, he is not subject to levy of penalty. The case of the assessee is that, the amount received by the assessee is only for the purpose of allotment of shares and it is not a deposit or loan. In this case, the reasonable cause is that the assessee was under the bona fide belief that the money received is only for the purpose of allotment of shares. Also, there is no material or evidence or any compelling reason produced by the Revenue to prove that the money received is a deposit or loan. The first appellate authority as well as the Tribunal have come to a correct conclusion after accepting the explanation offered by the assessee. It is a question of fact and the order of the Tribunal is not a perverse one. The concurrent finding given by both the authorities below is based on valid materials and evidence. In the case of CIT Vs. P. Mohanakala [2007] 291 ITR 278, the Supreme Court held that whenever there is a concurrent finding by the authorities below, no interference should be called for by the High Court. Under these circumstances, we do not find any error or leg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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