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2020 (10) TMI 935 - AT - Income TaxPenalty u/s 271D and 271E - loans were taken and repayment were made in cash, thereby violating the provisions of section 269SS and 269T - HELD THAT:- Majority of loans / deposits are taken from relatives, viz., wife, son and daughters. Bangalore Tribunal in the case of Smt.Deepika v. Addl.CIT [2017 (10) TMI 1405 - ITAT BANGALORE] had held that transactions between family members would not attract penalty u/s 271D. Also in the case of Sunil Kumar Goel [2009 (3) TMI 131 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that the family transactions would fall within the meaning of “reasonable cause” u/s 273B. Loans / deposits accepted from other than relatives, viz., Sri.Hiren Kumar Patel - On a query from the Bench whether there is a business understanding in writing between the assessee and Sri.Hiren Kumar Patel, the learned AR submitted in the affirmative and requested the matter may be examined by the A.O - For the imposition of penalty u/s 271D and 271E in context of transaction the assessee had with Sri.Hiren Kumar Patel, the matter is restored to the A.O. The assessee shall cooperate with the A.O. and shall not seek unnecessary adjournment. The assessee shall prove his case that the transaction he had with Sri.Hiren Kumar Patel is a business transaction and not a loan / deposit. It is ordered accordingly. Cash paid by Sri.Hiren Kumar Patel to a builder for the purchase of a flat on behalf of the assessee - passing of journal entry without actual receipt of cash - HELD THAT:- Assessee had recorded in her books of account, by passing a journal entry by crediting Sri.Hiren Kumar Patel’s accounts and debiting the flat purchase account. However, only the ledger account of Sri.Hiren Kumar Patel in the books of account of the assessee alone is placed on record. To understand whether it is a journal entry, the ledger account of the developer in the books of account of the assessee also needs to be perused. In absence of the same, in the interest of justice, we restore the issue to the files of the A.O. The A.O. shall examine whether the assessee in her books of account only passed a journal entry and was not in receipt of money from Sri.Hiren Kumar Patel. In view of the dictum laid down by the Hon’ble Delhi High Court in the case of CIT v. Noida Toll Bridge Co. Ltd. [2003 (1) TMI 46 - DELHI HIGH COURT]if the assessee had passed only a journal entry, the provisions of section 269SS would not be attracted and penalty u/s 271D.
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