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2022 (3) TMI 1018 - ITAT INDOREAddition u/s 69D - Hundies - Search & seizure operation - Unsigned hundies and promissory note found in search - theory of probability adopted by the investigation wing of Delhi - Hon'ble Settlement Commission observed that it is inconceivable that a person (Shri Satish Shahwney) would allow an amount of ₹ 3.80 crores to remain outstanding for such a long period - HELD THAT:- In the instant case, the Revenue has not brought on record any material establishing that the assessee has actually received the sum of ₹ 3,80,00,000/- during the period relevant to assessment year 2012-13. Therefore, we find from the perusal of the receipts & promissory note (unsigned) that the receipts relied upon do not fall in the category of ‘hundis’ in any manner We find that the Revenue was not convinced with as regard to the transaction, if any, carried out and the period during which such transaction was carried out. Thus, the theory being hypothesis was not conclusive. Therefore, application of Section 69D was unjustified. The documents were in English and the transactions were not between three parties. They were bilateral. The transactions were on the lines of a promissory note. The documents had waived the notice of dishonor and no grace period was granted. This was also indicative of the transaction not being a hundi transaction. Section 69D was not applicable. We find that the facts of the assessee’s case are identical to the above reported case of Dexan Pharmaceuticals Pvt. Ltd [1995 (1) TMI 54 - ANDHRA PRADESH HIGH COURT] and therefore, the provisions of sec. 69D were not applicable in the case of the assessee. Thus addition made by the Assessing Officer by invoking section 69D was bad in law and the action of Ld. Commissioner of Income Tax (Appeals) deleting this addition contains no infirmity and the same deserves no interference. Thus, the only ground raised by the Revenue stands dismissed. Penalty u/s 271D - contravention to the provisions of section 269SS - HELD THAT:- While deciding the quantum addition above we have held that at no point of time, it was proved that the assessee had actually received any loan or deposit specifically during the period relevant to Assessment Year 2012-13 as there was no material evidence in respect of the same. Since we have already confirmed the deletion of quantum addition by ld. CIT(A) while deciding the very foundation for initiation of penalty under section 271D has now become baseless.
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