TMI Blog2015 (1) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... handraker, Sr. DR ORDER PER A. T. VARKEY, JUDICIAL MEMBER This is an appeal arising from an order of the ld CIT(A)-XVI, Delhi dated 21.02.2013 for Assessment Year 2008-09. 2. All the three grounds raised by the revenue relate to deletion of penalty levied of ₹ 7,80,000/- u/s 271(D) of the Income Tax Act, 1961 (herein after the Act ). 3. The facts of the case are that the appellant company received share application money of ₹ 7,80,000/- in cash from 18 share holders at ₹ 40,000/- per persons and ₹ 30,000/- each from 2 persons on 10th August 2007. The Addl CIT held that there is violation of section 269SS of the Act, as assessee has received share application money in cash amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y violation, the person receiving the loan or deposit will be liable to penalty u/S.271D in an amount equal to the amount of the loan or deposit. A loan or deposit is defined in the Explanation below Sec.269SS as a loan or deposit of money . The assessee's contention, accepted both by the CIT(A) and the Tribunal, is that share application monies received by a company, pending allotment of shares, do not amount to loan or deposit. 8. On a careful consideration of the matter, we find that the AO has relied on the judgment of the Jharkhand High Court (supra) and referred the issue of levying penalty to the Additional CIT. He did not examine whether the share application monies can be treated as loan or deposit within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase before us, it may be seen that the receipt of share application monies from the three private limited companies for allotment of shares in the assessee-company cannot be treated as receipt of loan or deposit. In any case, the Tribunal has rightly noticed the cleavage of judicial opinion on the point and held that in that situation there was reasonable cause u/S.273B, applying the judgment of the Supreme Court in Vegetable Products (supra). 9. We are accordingly of the view that no substantial question of law arises from the order of the Tribunal. We decline to admit the appeal. The same is dismissed with no order as to costs . The above decision of Hon'ble jurisdictional High Court is squarely applicable in the instant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69SS. Share application moneys being outside the preview of Sec 269SS, therefore, penalty u/s 271D cannot be imposed on the amount of ₹ 7,80,000/- received as share application money on 10/08/07. In the result the appeal is allowed. 4. Having gone through the material on record and submission by both sides we find the issue is squarely covered by the judgement of jurisdictional High Court in the case of IP India (supra) wherein it was held that receipt of share application money in cash is beyond the scope of provision contained in Section 269SS read with section 271D of the Act. We therefore confirm the order of the ld CIT(A) and dismiss the ground raised by the Revenue. 5. In the result the appeal is dismissed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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