TMI Blog2015 (4) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... e mentioned person. We hold and direct accordingly. So far as the cash loan of ₹ 1 lakh received from Shri Patil Saheb of Jalgaon is concerned, the Ld. Counsel for the assessee fairly conceded that there is violation of provisions of section 269SS. We, therefore, uphold the levy of penalty u/s.271D on account of acceptance of cash loan of ₹ 1 lakh from Shri Patil Saheb of Jalgaon. - Decided partly in favour of assessee. Account payee cheques have been added by the AO u/s.68 - Held that:- So far as the amount of ₹ 20,000/- received in cash on 12-03-2004 from Smt. Kalpana R. Patil is concerned the same has to be deleted in view of the decision Madhukar D. Pawar (Supra). Penalty u/s.271D on this amount is directed to be deleted.- Decided partly in favour of assessee. So far as the amount of ₹ 50,000/- received from Smt.Latadevi Malpani, ₹ 50,000/- from Smt.Neetadevi Malpani, ₹ 50,000/- from Smt.Rupali Malpani and ₹ 1,20,000/- from Shri Sonali Malpani are concerned in view of the submission of the Ld. Counsel for the assessee the amounts are taken from different persons not exceeding ₹ 20,000/- in each case, the same are restored ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DER Per R.K. Panda, AM: The above 3 appeals filed by the assessee are directed against the separate orders dated 14-01-2011of the CIT(A)-I, Nashik relating to Assessment Years 2003-04 to 2005-06 respectively. For the sake of convenience, all these appeals were heard together and are being disposed of by this common order. 2. The above 3 appeals were earlier dismissed by the Tribunal vide order dated 03-05-2012 for non-appearance. Subsequently, the Tribunal vide order dated 01-11-2013 recalled the earlier order. Hence these are recalled matters. 3. The assessee in the above 3 appeals has challenged the order of the CIT(A) confirming the levy of penalty u/s.271D amounting to ₹ 2 lakhs for A.Y. 2003-04, ₹ 12,57,000/- for A.Y. 2004-05 and ₹ 1,58,95,000/- for A.Y. 2005-06 respectively. ITA No.341/PN/2011 (A.Y. 2003-04) : 4. Facts of the case, in brief, are that a search and seizure action u/s.132(1) of the Act was conducted by the Department in the Pawar group of cases, Malegaon on 27-01-2005. The assessee belongs to the above group which is engaged in the business of refining of Gold, Trading in Gold Jewellery, Silver Articles and imitation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere made before the JCIT. The Ld.CIT(A) was also not convinced with the explanation given by the assessee and upheld the penalty levied u/s.271D of the I.T. Act by the JCIT. 7. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 8. The Ld. Counsel for the assessee drew the attention of the Bench to page 11 of the paper book which gives the details of loans taken by the assessee during the impugned assessment year and which reads as under : Name of the Depositor/lender Date as per A.O. Amount as per A.O. Remark Balkrishna Nagmoti 21/9/02 80,000/- In fact as per seized record the amount was not accepted Patil Saheb, Jalgaon 1/11/02 1,00,000/- The A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s.143(3) r.w.s.153C Ravindra 29/3/03 20,000/- The amount is not exceeding ₹ 20,000/- and as held by Rajasthan High Court and various other courts, no contraven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the amount of ₹ 20,000/- received in cash from Shri Ravindra on 29-03-2003 is concerned, we find the Hon ble Bombay High Court in the case of Madhukar B. Pawar (Supra) had an occasion to decide such an issue. It was held in the said decision that in view of CBDT Circular No.572 dated 03-08-90, penalty u/s.271D can be levied in a case where the loan or deposit taken in cash is in excess of ₹ 20,000/-. Penalty u/s.271D is not leviable on the assessee for accepting cash loan of ₹ 20,000/- from each person. The relevant observation of the Hon ble High Court at para 4 and 5 of the order reads as under : 4. It is now well settled that circulars issued by CBDT are statutory in character and are binding on the Departmental authorities. The authorities including AO and other consequently would be bound by that circular. In the instant case, CBDT for the purpose of attracting s. 271D has set out that the loan or deposit should be in excess of ₹ 20,000. It is true that what CBDT has stated may be contrary to the express language of s. 269SS which uses the expression twenty thousand rupees or more . The law and the CBDT circulars can be spelled out from the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that the seized diary does not contain name of the above mentioned person. We, therefore, direct the Assessing Officer to verify the notings in the seized diary found during the course of search. In case the name of the above mentioned person is not appearing in the notings in the seized diary, then the Assessing Officer has to delete the penalty u/s.271D on account of cash loan of ₹ 80,000/- received from the above mentioned person. We hold and direct accordingly. 10.3 So far as the cash loan of ₹ 1 lakh received from Shri Patil Saheb of Jalgaon is concerned, the Ld. Counsel for the assessee fairly conceded that there is violation of provisions of section 269SS. We, therefore, uphold the levy of penalty u/s.271D on account of acceptance of cash loan of ₹ 1 lakh from Shri Patil Saheb of Jalgaon. 11. The appeal for the impugned assessment year is accordingly partly allowed for statistical purposes. ITA No.342/PN/2011 (A.Y. 2004-05) : 12. Facts of the case, in brief, are that the assessee during the impugned assessment year has received cash loan of ₹ 15,27,000/- from various persons the details of which are as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 50,000/- from Smt. Sonali Malpani and ₹ 80,000/- from Shri S.I. Patil were received by account payee cheques have been added by the AO u/s.68 of the I.T. Act. Therefore, he held that penalty u/s.271D cannot be levied on the above amounts totaling to ₹ 2,70,000/- He accordingly reduced the penalty so levied from ₹ 15,27,000/- to ₹ 12,57,000/-. In appeal the Ld.CIT(A) upheld the action of the AO. 12.3 Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 12.4 The Ld. Counsel for the assessee referring to pages 12 to 14 of the paper book drew the attention of the Bench to the details of deposits/loans accepted by the HUF Late Shri Shivaji R. Pawar which are as under : Name of the Depositor/lender Date as per A.O. Amount as per A.O. Remark Jambo Seth 1/1/4 50,000 The lender is retired person and not having taxable income. Further, the amount was repaid by A/c. payee cheque in F.Y. 2007-08 Jyoti Mahajan 27/2/04 6,00,000 Lender is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80,000 The A.O. has taxed the amount of ₹ 60,000/- as unexplained cash credit in assessment order passed u/s.143(3) r.w.s. 153C. Further, the amount of ₹ 80,000/- has been received by A/c. Payee Cheque by M/s. R.S. Pawar. This fact of cheque payment is mentioned in seized diary. Therefore the assessee is not concerned with the said loan of ₹ 80,000/- accepted by M/s. R.S. Pawar by A/c. Payee Cheque Sonali Malpani 1/4/03 29/1/04 50,000 70,000 Actually amount of ₹ 50,000/- belongs to Rupali and same is accepted in cheque, appearing in the books of Pawar Jewellers and same is also shown by the lender in her books. Your assessee is not concerned with the said loan accepted by M/s. Pawar Jewellers by A/c. Payee Cheque. The amount of ₹ 70,000/- is received as follows : Shri S.R. Pawar HUF - ₹ 19,000/- M/s. S.R. Pawar (Debtors Diary) - ₹ 18,000/- M/s. Pawar Jewellers (Debtors Diary) - ₹ 16,000/- Accordingly, the entries were made in the books of accounts prepared and accepted by the A.O. in assessment proceedings. The transactions are also re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a direction to verify the same and delete the penalty if the contention of the assessee is found to be correct. As regards the cash loan of ₹ 1,30,000/- taken from Shri Shivaji Kothawade on 06-01-2004 is concerned he submitted that the case of this person is like that of Shri Ramesh D. Pawar who is also not having any banking facility and residing in a remote village. Therefore, this issue also may be restored to the file of the AO for verification. 12.7 So far as amount of ₹ 1,40,000/- taken from Shri S.L. Patil is concerned he submitted that out of the above amount the assessee has received an amount of ₹ 80,000/- by account payee cheque in the name of M/s. R.S. Pawar. This fact of cheque payment is mentioned in the seized diary, therefore, no penalty is leviable. So far as the balance amount of ₹ 60,000/- is concerned he submitted that the amount has already been taxed by the AO u/s.68 of the Income Tax Act and therefore, no penalty u/s.271D is leviable on this amount. He however submitted that this issue also may be restored to the file of the AO with a direction to verify the same. 12.8 As regards the amount of ₹ 1,60,000/- received in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take appropriate decision as per law and facts after giving due opportunity of being heard to the assessee. 14.2 So far as the amount of ₹ 50,000/- received from Shri Ramesh D. Pawar and ₹ 1,30,000/- from Shri Shivaji Kothawade are concerned the same is restored to the file of the AO with a direction to verify the submission of the Ld. Counsel for the assessee that the above persons are agriculturists and have no banking facility at their respective villages. If the same is found to be correct, then in our opinion there exists reasonable cause for accepting such cash loan from the agriculturists having no banking facility and the Assessing Officer is directed to cancel the penalty u/s.271D. 14.3 So far as the amount of ₹ 1,40,000/- received from Shri S.L. Patil is concerned, it is the submission of the Ld. Counsel for the assessee that he has received an amount of ₹ 80,000/- by account payee cheque from Shri S.L. Patil and the loan of ₹ 60,000/- has been added by the AO u/s.68 of the I.T. Act. Similarly, it is the submission of the Ld. Counsel for the assessee that the amount of ₹ 1,60,000/- received from Mr. Jagannath Pawar is not correct an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount as per A.O. Remark Anant P. More 27/12/04 26,000 The lender is agriculturist and was not having bank account. Further the A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 153C. Anjanabai Chaudhari 1/1/05 25,000 The lender is agriculturist and was not having bank account. Further the A.O, has taxed the amount as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 153C. A.R. Salunke 20/12/04 7,25,000 The lender is agriculturist, amount actually belongs to Vinayak Borse Asha Bahalkar 1/6/04 20,000 The amount is not exceeding ₹ 20,000/- and as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted. Asha G. Hinge 1/1/05 12/12/04 50,000 25,000 Amount accepted on Sunday . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. taxed the amount as unexplained cash credit in assessment order u/s.143(3) r.w.s.153C Bhila D. Tisge 22/12/04 60,000 The lender is agriculturist, like the assessee s HUF. The A.O. taxed the amount as unexplained cash credit in assessment order u/s.143(3) r.w.s.153C Bindu Joshi 5/12/04 40,000 Amount accepted on Sunday B.N. Wani 25/11/04 80,000 - B.T. Wani Sir 12/12/04 90,000 Retired person. Amount accepted on Sunday. Chandrakala R. Salunke 1/6/04 20/5/04 30,000 20,000 The lender is agriculturist, like the assessee s HUF. In respect of ₹ 20,000/- as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted. Dattu Chaudhari 21/1/05 28,000 The A.O. has taxed the amount as unexplained cash credit in ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irachand P. Kothari 7/1/05 1,00,000 - Indubai Tatar 4/I 2/04 23,000 Housewife No Bank A/c. No other income source. Jagganath L Pawar 17/7/04 17/12/04 15,000 15,000 The lender is agriculturist, like the assessee's H.U.F. Residing at Kaulane. Actually there is one entry which is renewed on 17-12-2004 and not two entries as stated in notice. In respect of amount less than ₹ 20000/- as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted. Jarana Joshi 5/12/04 50,000 Amount accepted on Sunday. Actually amount is ₹ 19500/-. Further the A.O. has taxed the amount ₹ 19500/- as unexplained cash credit in assessment order passed u/s, 143(3) r.w.s. 153C. Jaiprakash Jadhav 22/12/04 22/12/04 22/12/04 20/12/04 6/12/04 12/12/04 45,000 1,00,000 55,000 50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/1/05 20/12/14 4,00,000 Senior Citizen. Retired person Madhukar Mangle 12/11/04 50,000 Retired person. The A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s.143(3) r.w.s.153C Madhukar Pawar 1/1/05 1,20,000 The lender is agriculturist, like the assessee s HUF is close relative of Pawar family. In view of Pune Tribunal s decision in the case of Kasaliwal, no penalty leviable. Mangla D. Bhamre 5/12/04 5/12/04 10/12/04 3,50,000 30,000 30,000 The lender is agriculturist, like the assessee s HUF. In respect of acceptance of amount on 5-12-2004 and ₹ 350000 ₹ 30000 same was accepted on Sunday Manjula C. Amrutkar 5/1/04 11/12/04 15/12/04 5/12/04 16/11/04 19/12/04 29/12/04 19/12/04 3,00,000 70,000 10,000 15,000 15,000 10,000 20,000 20,000 The lender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nimbabai Chaudhari 5/12/04 5/12/04 24/11/04 6/12/04 60,000 2,000 2,000 4,000 Amount of ₹ 60000/- ₹ 2000/- received on Sunday . The lender is agriculturist, like the assessee's H.U.F. Nirmala G. Patil 1/1/05 20,000 The A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 153C. In respect of amount upto 20,0000/- as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted Parul J. Doshi 12/8/04 20,000 The A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 153C. In respect of amount upto 20,0000/- as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted Prakash R. Khairnar 25/12/04 2,00,000 Retired Person. The A.O. has taxed the amount as unexplained cash credit in assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in assessment order passed u/s. 143(3) r.w.s. 153C. Shankar Sonawane 1/1/05 5,000 The A.O. has taxed the amount as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 153C.Retired Person. Shashi Hinge 15/4/04 68,000 The lender is agriculturist, like the assessee's H.U.F. The A.O. has taxed he amount of ₹ 50,000/- as unexplained cash credit in assessment order passed u/s. 143(3) r.w.s. 53C.Retired Person. Sheetal Y Mahurkar 6/12/04 70,000 Housewife. Shivaji T. Patil 27/4/04 41,000 The lender is agriculturist, like the assessee's H.U.F. Shivaji V. Pawar 9/1/05 4,00,000 Retired Person. Amount received on Sunday. Seema Hinge 16/11/04 4/12/04 62,000 30,000 Service. The A.O. has taxed the amount as unexplained cash credit in assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /12/04 90,000 The lender is agriculturist, like the assessee's H.U.F. Amount ₹ 92,500/-already taxed as unexplained cash credit in assessment proceedings. Suresh Ahire 1/1/05 2,45,000 Teacher. Suresh B. Garud 12/1/05 24/1/05 14/1/05 50,000 30,000 20,000 Teacher. In respect of amount up to ₹ 20000/- as held by Rajasthan High Court and various other courts, no contravention of provisions of section 269SS resulted. Suresh Yeola 1/12/04 12,00,000 As per affidavit submitted amount belongs to total 9 persons. Out of that two are housewives, having no other income. Suwalal Bafana 24/7/04 50,000 Amount already taxed as unexplained cash credit in assessment proceedings. , Tarabai Wankhede 21/1/05 30,000 The lender is agriculturist, like the assessee's H.U.F. She is Housewife. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,000 Amount of ₹ 25000/-received on Sunday. V.T. Wani Sir 15/12/04 2,00,000 The lender is agriculturist, like the assessee's H.U.F. As well he is getting pension income also. Waman R. Shinde 21/9/04 24/9/04 23/9/04 20/9/04 1,00,000 70,000 80,000 1,00,000 The lender is agriculturist, like the assessee's H.U.F. is residing at Vadgaon village ,where no banking facilities are available. Yamunabai Bhosale 1/1/05 4,00,000 The lender is agriculturist, like the assessee's H.U.F. Yashwant B. Gaikwad. 2/11/04 4,00,000 The lender is agriculturist, like the assessee's H.U.F. 16.2 Referring to the above table, he submitted that penalty has been levied on account of cash loan of ₹ 20,000/- each accepted from Smt. Asha Bahalkar, Shri Balu Dandagavhal, Smt. Kamalabai K. Patil, Shri Narendra Maharaj, Smt. Nirmala G. Patil, Shri Parul J. Doshi, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on may be taken. 17. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 18. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. So far as the amount of ₹ 20,000/- each received from Shri Asha Bahalkar, Balu Dandagavhal, Smt. Kamalabai K. Patil, Shri Narendra Maharaj, Shri Nirmala G. Patil, Shri Praul J. Doshi and Shri Subhash Agnihotri are concerned the penalty u/s.271D is not leviable on these amounts in view of the decision of the Hon ble Bombay High Court in the case of Madhukar D. Pawar (Supra). We have already discussed this issue at Para No.10 of the impugned order while deciding ITA No.341/PN/2011 (A.Y. 2003-04). Following the same reasonings, penalty u/s.271D on these amounts are directed to be deleted. 18.1 Similarly, in the following cases, the assessee has submitted that the lenders are agriculturists and were not having banking facility in their respective villages : 1. Shri Anant P. More - ₹ 26,000/- 2. Shri Anjanab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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