TMI Blog2016 (3) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and delete the penalty. - Decided in favour of assessee - ITA No. 1796/Ahd/2011 - - - Dated:- 9-2-2016 - Rajpal Yadav, JM And Manish Borad, AM For the Appellant : Shri M K Patel, AR For the Respondent : Mrs Prajna Paramita, Sr DR ORDER Per Rajpal Yadav, Judicial Member The assessee is in appeal before us against the order of the learned Commissioner of Income-tax (Appeals)-I, Baroda, dated 11.05.2011 passed for Assessment Year 2004-05. 2. The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the penalty of ₹ 3,73,620/- which was imposed u/s. 271E of the Income-tax Act. 3. The brief facts of the case are that M/s. Amarshiv Construction Pvt Ltd had borrowed a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kolkata Bench in the case of Mahmood Associates (P) Ltd. vs. Joint Commissioner of Income-tax in ITA No.1112/Kol/2012. In this case, the assessee-company took loan from the Director in cash, amounting to ₹ 3,98,719/-. The Assessing Officer has imposed a penalty equivalent to this amount u/s 271D of the Act. The Tribunal, after referring to the decision of Hon ble Madras High Court, held that the loan taken from a Director does not fall within the ambit of expression deposit and therefore, if some loan was taken from the Director, then it cannot constituted that the assessee has violated section 269SS of the Act. According to the ld. Counsel for the assessee, the same analogy is applicable in the present case because in this case als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was a private limited company. One RCK was its promoter and director during the period relevant to assessment year 1990-91. During that year, the assesseecompany accepted deposits in cash from the promoter from time to time aggregating in all ₹ 2,31,320. According to the Assessing officer as also the Commissioner (Appeals), the said payment was in contravention of section 269SS of the Income-tax Act, 1961, and the assessee was liable to pay penalty under section 271D. However, the Tribunal vacated the penalty so imposed on the finding that the said payment was not by way of deposit or loan, but towards adjustments of the amount drawn by the promoter from the company's account. On an application praying for an order callin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt received from a director or a shareholder of a private limited company. Therefore, the transaction between the appellant and the director cum shareholder is not a loan or deposit and it is only a current account in nature and no interest is being charged for the above transaction. In the foregoing conclusions, we are of the view that since the said transaction does not fall within the meaning of loan or advance, there is no violation of section 269SS of the Income-tax Act. We find no error in the order of the Tribunal and the same requires no interference. Hence, no substantial question of law arises for consideration of the court. Accordingly, we dismiss the above tax case. 7. Ld. Counsel for the assessee also referred to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of salary and bonus. Accordingly, the crux of the matter is that most of the amounts as referred to above was based on mere book entries and not received in cash by the assessee from family members except the amount of NSCs and other cash loan and that cannot be treated as loan or deposits for the purpose of section 269SS. 8. Ld. Sr. DR Shri Kanhiya Lal Kanak was specifically asked whether the factum of receipt of unsecured loan in cash by assessee company from its director is in dispute or not. He categorically admitted the fact and stated that yes, the unsecured loan in cash is received by assessee company from its director. 9. We have heard rival submissions and gone through facts and circumstances of the case. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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