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Deputy Commissioner of Income Tax Versus M/s Mahagun Technologies Pvt Ltd

2015 (11) TMI 1192 - ITAT DELHI

Penalty imposed u/s 271D - violation of the provisions of section 269SS - CIT(A) deleted penalty - Held that:- The account of the associate concern M/s Mahagun Developers Ltd. was credited by the assessee by passing a journal entry and it did not involve acceptance of any loan or deposit or money. Therefore, the provisions of Section 269SS of the Act were not applicable and the penalty levied by the AO u/s 271D of the Act was rightly deleted by the ld. CIT(A). - Decided in favour of assessee. - .....

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316/-. 3. Facts of the case in brief are that the assessee filed its return of income on 03.07.2009 declaring an income of ₹ 10,560/- and the assessment was completed u/s 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) at ₹ 58,13,876/-. The AO noted that as per the accounts of M/s Mahagun Developers Ltd. in the books of the assessee an amount of ₹ 50,05,316/- was transferred which included air conditioners worth ₹ 19,68,769/- and building work .....

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ecessary journal entries. However, the AO was not satisfied with the submissions of the assessee and levied the penalty of ₹ 53,53,316/- u/s 271D of the Act. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and made the written submissions which is incorporated in para 5.1 of the impugned order, for the cost of repetition, the same are not reproduced herein. 5. The ld. CIT(A) after considering the submissions of the assessee observed that there was a relationship of lan .....

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Act and accordingly penalty levied by the AO u/s 271D of the Act was deleted. 6. Now the department is in appeal. The ld. DR supported the order of the AO but could not controvert the findings given by the ld. CIT(A). In his rival submissions the ld. Counsel for the assessee reiterated the submission made before the authorities below and further submitted that there was no receipt of loan or deposit in cash and only journal entries were passed. Therefore, the ld. CIT(A) was fully justified in d .....

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n the account of the said company on account of lease rent, value of air conditioners and building work in progress, those entries were in the form of adjustment between the assessee and the associate company but no cash was involved. On a similar issue the Hon ble Jurisdictional High Court in the case of CIT Vs Worldwide Township Projects Ltd. (supra) held as under: "Section 269SS indicates that it applies to a transaction where a deposit or a loan is accepted by an assessee, otherwise tha .....

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