TMI Blog2011 (11) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... -2011 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant : Mr. Sanjeev Sabharwal, Advocate For Respondent : Mr. S. Krishnan, Advocate R.V. EASWAR, J.: This is an appeal filed by the Revenue under Section 260A of the Income Tax Act (Act, for short) against the order dated 31st March, 2011 of the Income Tax Appellate Tribunal (Tribunal, for short) in ITA 226/Del./2011 relating to the assessment year 2005-06. The following questions of law, stated to be substantial questions of law have been raised in the appeal : 2.1 Whether learned ITAT/CIT(A) erred in deleting the penalty of Rs.18,00,000/- imposed by the Assessing officer under Section 271D of the Income Tax Act, 1961? 2.2 Whether ITAT was corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the consequence that the assessee would be liable for penalty under Section 271D. In this view of the matter, he referred the matter to the Additional Commissioner of Income Tax, Range 11, New Delhi, who was the appropriate authority to levy the penalty. Before the Additional Commissioner of Income Tax, the assessee submitted a written reply dated 1st August, 2008 and contended that there was no violation of the provisions of Section 269SS as it had not accepted any loan or deposit in cash. It was claimed that the receipt of share application monies in cash did not amount to acceptance of loan or deposit by the company. These submissions were, however, rejected by the Additional Commissioner of Income Tax, who by a brief order dated 28th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s loans or deposits would be sufficient to drop the penalty. In this behalf the Tribunal relied on the judgment of the Supreme Court in CIT vs. Vegetable Products Ltd (1973) 88 ITR 192 (SC) in which it was held that if the Court finds that a taxing provision or penalty provision is ambiguous or can give rise to more than one meaning, then it should adopt that meaning which favours the assessee. Relying on this judgment of the Supreme Court, the Tribunal held that since there was more than one view on the applicability of Section 269SS to monies received as share application monies, the CIT(Appeals) had rightly cancelled the penalty. The appeal filed by the Revenue was thus dismissed. 6. The revenue has raised the questions of law extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Jharkhand High Court (supra). The reliance on this judgment appears to us to be misplaced. In Baidya Nath Plastic Industries (P) Ltd. and Ors vs K.L. Anand (1998) 230 ITR 522, a learned Single Judge of this court pointed out that the distinction between a loan and a deposit is that in the case of the former it is ordinarily the duty of the debtor to seek out the creditor and to repay the money according to the agreement while in the case of a deposit it is generally the duty of the depositor to go to the banker or to the depositee, as the case may be, and make a demand for it. This judgment was approvingly cited by a Division Bench of this court in Director of Income Tax (Exemption) vs ACME Educational Society (2010) 326 ITR 146 (De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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