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2015 (2) TMI 245 - AT - Income TaxPenalty under section 271D - book entries to share application money account - Held that:- As seen from the transactions based on the ledger account, an amount of ₹ 12,95,490 was paid for the purpose of salaries and benefits every month and an amount of ₹ 3,41,000 was paid towards deposit and orchestra equipment. Hence, to that extent, it can be concluded that the amounts are advanced for business exigencies of assessee company. Amounts towards share application money during the year were some times returned to the said person and only net amount of outstanding amount at the end of the year was transferred by a journal entry. Considering the nature of the transactions, we are of the opinion that there was a reasonable cause on the part of assessee for obtaining amounts from Mr. K.V. Sreerama Murthy which are subsequently considered as share application money. In view of the provisions of section 273B of the I.T. Act, there no scope for levy of penalty under section 271D. - Decided in favour of assessee.
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