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2021 (5) TMI 341 - AT - Income TaxPenalty u/s 271D and 271E - creation/ assignment of debt and liabilities vide journal entries - reasonable cause u/s. 273B - HELD THAT:- We find that these are genuine business transactions entered in the normal course of business. Hence if the aforesaid transactions are looked into from the perspective of the object and intention behind introduction of provisions of section 269SS and 269T of the Act , then the provisions of section 269SS and 269T of the Act cannot be made applicable to the facts of the instant case. Moreover, from the detailed explanation of the aforesaid transactions together with the purpose for which those journal entries were passed, it could be safely concluded that these entries neither reflect any receipt of loan nor repayment of loan. At the cost of repetition, we find that the journal entries are passed towards amount receivable from BETL towards sale of flats which was adjusted against amount payable to LDPL and SNCML on an understanding that both these companies are liable to pay BETL towards advertisement expenses. Hence it could be safely concluded that these entries were passed out of business constraints and exigencies and for administrative convenience with no malafide intent to evade payment of tax. In our considered opinion, this business constraint and exigency and administrative convenience itself constitutes reasonable cause within the meaning of section 273B of the Act . Hence no penalty u/s 271D and 271E of the Act could be invoked for the same. CIT-A had rightly held that no penalty u/s 271D and 271E of the Act could be levied in respect of transactions with BETL With regard to the other remaining entries where transactions have been passed through journal entries, these journal entries passed represent assignment/transfer of assets/debtors and liabilities/creditors having underlying transactions arising out of business expediencies and exigencies. These entries arise in the normal course of day to day business activities. We find that the argument of the ld AR deserves to be accepted on the bare perusal of the figures involved in the said journal entries as no person would either receive or repay loans in such odd amounts. Going by the frequency of the said transactions and the figures involved therein, it could be safely concluded that all those transactions were entered in the normal course of business of the assessee company by way of assignment of rights / liabilities and assignment of genuine receivables / payables. Moreover, the genuineness of those transactions reflected through journal entries have neither been disputed nor doubted by the revenue. These would certainly constitute reasonable cause within the meaning of section 273B. In the instant case, these journal entries in the name of some parties were passed towards assignment of genuine and bonafide receivables / payables arising out of business expediencies and exigencies in the normal course of business. Hence the same would certainly constitute reasonable cause within the meaning of section 273B of the Act and hence no penalty u/s 271D and 271E of the Act could be levied for the aforesaid sums. Reliance in this regard is placed on the decision of Hon’ble Jurisdictional High Court in the case of Triumph International [2012 (6) TMI 358 - BOMBAY HIGH COURT] wherein the relevant operative portion is already reproduced hereinabove. No infirmity in the order of the ld CIT-A cancelling the levy of penalty in the aforesaid sums of various parties u/s 271D and 271E of the Act. - Decided in favour of assessee.
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