2024 (2) TMI 332 - ITAT INDORE

Penalty u/s 271D & 271E - default committed in violation of section 269SS & 269T - Reliance on search proceeding documents - Transactions being mere book entries - assessing authority observed that the assessee has taken loans in cash and also made repayments in cash - During search, the authorities seized a laptop from premise of assessee and took Tally data from laptop and also seized loose papers from the premise of one employee of assessee as recorded u/s 132(4) wherein he stated that unsecured loans were taken from various people which were out of books

HELD THAT:- Since there is nothing new to be considered or analyed in present appeals, we adopt the same reasoning and same view as taken by ITAT in [2024 (2) TMI 241 - ITAT INDORE] and [2023 (1) TMI 1342 - ITAT INDORE] held that tally account as dummy one created for training purpose incorporating the data from different sources including that of assessee and therefore, the Tally account found in the laptop as well as loose paper were held to be having no evidentiary value being dump documents and retraction of the statement by filing the affidavit and non-consideration of the same by the AO or examination of the said affidavit to ascertain the correct facts is a serious laps on the part of the AO while making addition.

Also to bring into the effect of penalty provision us 271D or 271E, it has to be established with independent evidence and not merely corroborative evidence (i.e. book entries) that Assessee has actually committed the default contemplated in section 269SS or 269T i.e. it has taken loan in cash or it has repaid the loan in cash exceeding Rs. 20,000. The explanation below 269SS defines the “Loans or deposits MEANS Loans or deposits of money. The use of word “Means” by legislature in the Explanation below Section 269SS or 269T is with a purpose and it is to restrict the meaning to only Loan of “Money”. The use of Word “Means” indicates that definition is hard and fast and no other meaning can be assigned to the expression that is put down in definition [P.Kasilingham vs. PSG College of Technology [1995 (3) TMI 466 - SUPREME COURT]. The expression “money” means currency/cash. Therefore, very essential ingredient to constitute a default within the meaning of 269SS or 269T is that whether there is movement of money. Mere book entries alone, during the course of training, cannot entail a default of taking or repaying the loan in cash, unless it is established that Moneys moved from one person to another person, which is in the nature of loans or deposits”

Accordingly, we hold that the orders passed by CIT(A) in present appeals deleting the penalties are in order and do not require any interference from our side. Decided against revenue.