Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2009 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (6) TMI 981 - AT - Income TaxLevy of Penalty u/s 271D - Nature of receipt of Share application money in cash - Applicability of provisions of ss. 269SS on receipt - CIT(A) deleted the penalty with regard to receipt for which addition was made by the AO u/s. 68 and he confirmed the balance penalty in connection with receipt of share application money in cash - contentions raised is that s. 269SS is not applicable on receipt of share application money in cash HELD THAT:- We find that there are two judgments of two different High Courts available on this issue out of which one judgment of Hon'ble Madras High Court is in favour of the assessee whereas the other Judgment of Hon'ble Jharkhand High Court is against the assessee. Under these facts, we have to decide as to which judgment should be followed by us, Under this situation, we are guided by Hon'ble apex Court and as per the judgment in the case of Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME COURT] held by Hon'ble apex Court that if two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted. Respectfully following this judgment, we are of the considered opinion that we are bound to follow the judgment of Hon'ble Madras High Court rendered in the case of Rugmani Ram Raghav [2007 (7) TMI 237 - MADRAS HIGH COURT] because this judgment is in favour of the assessee and no judgment of Hon'ble apex Court or of Hon'ble jurisdictional High Court on the issue before us was brought to our notice. It was held by the Hon'ble Madras High Court that receipt of share application money is neither loan nor deposit. Once we hold and accept that receipt of share application money is neither loan nor deposit, the provisions of ss. 269SS and 271D are not applicable because the provisions of s. 269SS are in connection with acceptance of the loan and deposit and the provisions of s. 271D are in connection with violation of s. 269SS. We, therefore, hold that since in the present case, the alleged amount was received by the assessee in cash on account of share application money, penalty u/s. 271D cannot be levied because the receipt of share application money is neither loan nor deposit and hence the impugned receipt is not governed by s. 269SS. We therefore, delete the penalty. In the result, the appeal of the assessee is allowed.
|