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2022 (6) TMI 445 - AT - Income TaxPenalty levied u/s 271D - cash loan in violation of provision of section 269SS - HELD THAT:- CIT-A deleted the addition AO himself has recorded in the reasons to belief that cash loan was received by the two firms M/s Green Bird Pvt. Ltd. and P.D. Construction and name of the assessee was appearing in which contact person. Evidently if the loan has been received by the partnership firm/company wherein the assessee is a partner or director, the said loan cannot be added in the hands of the assessee. CIT(A) has rightly advised the AO to consider examination of the transactions in the hands of M/s P.D. Construction and M/s Green Bird Pvt. Ltd for any suitable action. The original statement of Shri Nilesh Bharani were never provided to the assessee despite repeated request for inspection of the original statement, wherein he stated of provided cash loan to two concerns namely P.D. Construction and M/d Green Bird Pvt. Ltd. Shri Nilesh Bharani even retracted his statement made u/s 132(4) of providing cash loan to two concerns. During the cross-examination by the assessee Shri Nilesh Bharani denied of giving any cash loan to the assessee or his concerns. When the issue-in-dispute is in respect of the receipt of loan and source of which is already available on record, it is not understandable how the same become undisclosed income in the hands of the assessee, as source of the same, is already within the knowledge of the Income Tax Department. Addition u/s 69A - AO has on the one hand added cash loan alleged to receipt by the assessee as unexplained cash credit of the assessee as its income and on the other hand, also levied penalty u/s 271D of the Act in contravention of provision of section 269SS of the Act i.e. receipt of the loan otherwise then by account payee cheque. CIT(A) has deleted the penalty. In view of the fact that the addition u/s 69A for receipt of cash loan itself was deleted and therefore said penalty u/s 271D for receiving cash loan in violation of provision of section 269SS cannot be survive.
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