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TMI Blog2012 (9) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... ournal entries in the books of the assessee would not amount to acceptance of any loan or deposit otherwise than by account payee cheque or account payee bank draft within the meaning of Section 269SS to attract levy of penalty under Section 271D of the Income Tax Act, 1961 ? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting penalty of Rs. 2,10,00,000/levied under Section 271D of the Income Tax Act, by accepting the additional evidence filed before it by the assessee without giving opportunity to the Additional Commissioner of Income Tax, Central Range - 6, who levied the aforesaid penalty ? 2. The assessment year involved herein is AY 20002001. 3. The respondent - assessee is a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces transferred and Rs. 22,99,17,749/represented aggregate of debtors balances transferred. 5. The accounts of the asessee for AY 20002001 were audited through a auditor appointed under Section 142(2A) of the Income Tax Act, 1961. In the special audit report it was stated that in the assessment year in question, the assessee had received from Vijay Diamond Private Limited a sum of Rs. 2.10 crores from Vijay Diamond Private Limited as and by way of loan / deposit otherwise than by cheque or demand draft in contravention of Section 269SS of the Income Tax Act, 1961. On the basis of the said report, proceedings were initiated and by an order dated 30th July 2004 penalty amounting to Rs. 2.10 crores was imposed under Section 271D for receivin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,10,00,000/to verify the documents furnished before the Tribunal, the penalty of Rs. 2,10,00,000/imposed under Section 271D of the Act ought not to have been deleted by the Tribunal. 9. The question as to whether loans / deposits can be repaid by debiting the accounts through journal entries has been considered by this Court in the assessee's own case in Income Tax Appeal No.5746 of 2010 decided on 12th June 2012. Applying the ratio laid down therein we hold that receiving loans / deposits through journal entries would be in violation of Section 269SS of the Act. However, as rightly contended by Mr.Pardiwala, learned Senior Advocate appearing on behalf of the assessee, the transactions in question were undertaken not with a view to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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