TMI Blog2010 (1) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee) for the assessment year 2000-01, the A.O. noticed that the assessee had accepted during the relevant previous year a loan of ₹ 1,60,000/- from his wife Smt. Satyagowri and ₹ 1,40,000/0 from his father Shri V. Lovaraju. Since the loans is above ₹ 20,000/-, the A.O. invoked the provisions of section 269SS and initiated the penalty proceedings u/s 271D of the I.T. Act. In response to show cause notice, it was contended interalia that interest free loans taken from Smt. V. Satyagowri and Late Shri V. Lovaraju do not fit into the definition of any of the terms i.e. loan or deposit as such amounts represented some kind of adjustment of funds between family members, and, as such, they clearly fall outside the spher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two independent assessees based on an act of casualness, specially in a case where the disclosure thereof is contained in the compilation of accounts, and which has no tax effect, establishes reasonable cause u/s 273B for not invoking the penal provisions of section 271D and 271E. The relevant observations of the Punjab Haryana High Courts are extracted hereunder for the sake of reference: The Tribunal was right in recording its conclusion that a reasonable cause had been shown by the assessee. The Tribunal relied on the fact that the assessee had produced his cash books, depicting loans taken by him unilaterally before the Revenue in the instant action of the assessee in as much as the assessee did not attempt by the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid judgements, we are of the view that provisions of section 269SS and 269T were introduced with the intention to curb the transactions of the black money. While levying a penalty u/s 271D one has to examine the surrounding circumstances under which the loan in cash was obtained by the assessees. In case of family transactions, the bonafide of the assessees should not be doubted as held in the case of CIT Vs. Sunil Kumar Goel (supra). In the instant case, assessee has made out a case that the family loan was obtained to clear the loan liabilities of the outsiders and Revenue has not placed anything on record to falsify the claim of the assessees. Under the given facts and circumstances of the case, we are of the view that the invocation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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