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2015 (7) TMI 326 - ITAT PUNE

2015 (7) TMI 326 - ITAT PUNE - TMI - Levy of penalty under section 271D - violation of the provisions of section 269SS - Held that:- In the instant case the assessee was categorically denying from the very beginning regarding acceptance of such cash loan from Shri K.N. Mutha and since there is no direct evidence to substantiate that the assessee has in-fact accepted the said cash loan and since no statement was recorded from either of the parties, therefore, following the decision of the Co-ordi .....

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For the Respondent : Shri A.K. Modi ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 14.08.2013 of the CIT(A), Aurangabad relating to Assessment Year 2006-07. 2. Levy of penalty of ₹ 1,00,000/- under section 271D of the I.T. Act by the Assessing Officer and confirmed by the CIT(A) is the only issue raised by the assessee in various grounds of appeal. 3. Despite service of notice none appeared on behalf of the assessee. However, a written submi .....

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ection 133A of the I.T. Act was conducted in the case of Shri Kachrulal Nathmal Mutha (K.N. Mutha) engaged in money lending activity. Shri K.N. Mutha has given cash loan on hundies and has obtained dated/undated duly signed cheques of the borrowers as security. One such cheque duly signed by the assessee dated 06.08.2005 bearing Cheque No.997116 of the Chikhali Urban Cooperative Bank Ltd. was found with Shri K.N. Mutha. The Assessing Officer, therefore, was of the opinion that the assessee has a .....

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not satisfied with the explanation given by the assessee. He observed that Shri K.N. Mutha has accepted the above modus operendy and admitted that his business is of giving loans in cash and accepting the repayment in cash. He has accepted that the entire money so given, against the cheques deposited with him, was unexplained income. According to the Addl. CIT, if the assessee accepts loans/deposits in cash and repays the same in cash it would be impossible to accept that the entry of the same w .....

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that the debtor had repaid the amount borrowed undated. Rejecting the explanation given by the assessee and observing that assessee had taken loan aggregating to ₹ 1,00,000/- in cash from Shri K.N. Mutha and since the cheque was not cancelled and the period of validity subsists the amount could not have been returned by the assessee to money lender Shri K.N. Mutha. He therefore levied penalty of ₹ 1,00,000/- under section 271D for contravention of provisions of section 269SS of the I .....

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given by the assessee and upheld the penalty of ₹ 1,00,000/- levied by the Addl. CIT. While doing so, he observed that the submission of the assessee that he has given duly signed cheque of ₹ 1,00,000/- to Shri K.N. Mutha without obtaining cash loan of ₹ 1,00,000/- appears to be improbable and therefore cannot be accepted. Further, when the loan was not sanctioned by Shri K.N. Mutha, there was no question of not returning the cheque despite the requests of the assessee. Therefo .....

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hed Shri K.N. Mutha for seeking loan and for this purpose he had handed over a signed cheque. However, at that point of time the assessee was having existing loan liability of Chikli Urban Cooperative Bank to the tune of ₹ 16,00,000/-. Shri K.N. Mutha after discreet enquiries with the said bank and on having come to know of this fact refused to grant loan to the assessee. However, he did not return the same and the validity of the said cheque was over. Therefore, the assessee did not pursu .....

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that such cash loan has been given or taken. The entire process is on the basis of surmises and presumptions. It has further been submitted by the assessee in his written submission that under identical facts and circumstances, the Tribunal in the case of Late Shri Madanlal N. Singalkar, Through Legal Heir Shri Manjeet M. Singalkar vs. Addl. CIT vide ITA No.2183/PN/2013, order dated 19.09.2014 deleted the penalty levied under section 271D of the I.T. Act, which was upheld by the CIT(A). 9. The L .....

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cash loan of ₹ 1,00,000/- from Shri K.N. Mutha in violation of the provisions of section 269SS of the I.T. Act. The same was based on the basis of a signed cheque bearing No.997116 of the Chikhali Urban Cooperative Bank Ltd. dated 06.08.2005 found from the premises of Shri K.N. Mutha during the course of survey action under section 133A of the I.T. Act on 02.02.2006. During the course of penalty proceedings, the assessee submitted that he has not obtained any such cash loan from Shri K.N. .....

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al N. Singalkar, Through Legal Heir Shri Manjeet M. Singalkar vs. Addl. CIT (supra), wherein the Tribunal cancelled the penalty so levied under section 271D of the I.T. Act on the ground that no direct evidence was brought on record by the Revenue when the assessee was denying categorically of accepting such loan and no statement was recorded from either of the persons so as to prove that such cash loan has been given or taken. The relevant observations of the Tribunal at para 7 read as under :- .....

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assessee appears to have taken a cash loan of ₹ 6 lakhs from Shri Kachrulal Nathmal Mutha during the A.Y. 2006-07. We find before the CIT(A) the assessee submitted that he has only approached Shri Kachrulal Nathmal Mutha with the proposal of loan for which he had handed over the cheques and hundies of ₹ 6 lakhs as security. However, the said proposal did not materialise. However, the said hundies remained with Shri Kachrulal Nathmal Mutha. We find the Ld.CIT(A) did not accept the con .....

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9SS. In the instant case, there is no direct evidence brought on record by the Revenue. The assessee was categorically denying of any such cash loan from Shri Kachrulal Nathmal Mutha. There is nothing on record to suggest that any such statement has been recorded from either of the persons so as to prove that such cash loan has been given or taken. The entire process is on the basis of surmises and presumptions. It is also a fact that the assessee is no more and has expired. Considering the tota .....

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