TaxTMI 
TaxTMI 
2013 (11) TMI 1648
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....ue are set out in brief. The assessee is a nonresident and is having business in Dubai, Abudhabi and also in India. The department carried out search and seizure operations u/s 132 of the Act in the hands of the assessee. During the course of search assessment proceedings, the AO noticed that the assessee has accepted a loan of Rs. 15.00 lakhs by way of cash during the financial year relevant to the assessment year 2008-09. Hence, he referred the matter of violation of provisions of sec. 269SS of the Act to the Joint Commissioner of Income tax (JCIT), who initiated penalty proceedings u/s 271D of the Act. 3. Before Ld JCIT, it was submitted that the above said amount of Rs. 15.00 lakhs was given by one Shri K.C. Basheer, who paid the same ....
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....e and levied a penalty of Rs. 15.00 lakhs u/s 271D of the Act. 5. The Ld CIT(A), however, deleted the penalty mainly holding that the explanations given by the assessee fit in normal human probabilities and hence the provisions of sec. 269SS, which deals with the acceptance of loan or deposit, could not be applied to the advance taken for sale of property. Accordingly, he deleted the penalty of Rs. 15.00 lakhs levied u/s 271D of the Act. Aggrieved, the revenue has filed this appeal before us. 6. The Ld D.R submitted that the assessee has failed to prove that the impugned amount represents property advance, as the confirmation letters given by Shri K.C. Basheer are contradictory. The Ld D.R further submitted that the so called sale agreeme....
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....ned amount of Rs. 15.00 lakhs was not treated as the income of the assessee. He further submitted that the genuineness of the receipt of Rs. 15.00 lakhs was not doubted by the assessing authorities. Accordingly, he submitted that the Ld CIT(A) was justified in cancelling the penalty. 8. We have heard the rival contentions and carefully perused the record. In the first place, we notice that the theory of receipt of Rs. 15.00 lakhs as property advance does not find to be a convincing one to us for the following reasons. (a) The property was said to belong to the four children of the assessee. From the recitals made in the agreement, it is seen that two persons are residing in India and other two persons are doing business abroad. How....
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....Shri K.C. Basheer gave a letter dt. 13.12.2010 before the AO, wherein the transaction was mentioned as Loan transaction. However, before the JCIT the said person has changed his stand and has stated the same as Property advance in his letter dated 04.03.2011 filed with JCIT. It is to be noted here that the assessee herein has started repaying the amount from 20.10.2010 onwards, i.e., during the course of assessment proceedings. However, the letters furnished by Shri K.C. Basheer did not mention about the repayments nor did it state about the reasons for cancellation of the sale agreement. The names of children of the assessee or the details of property also do not find place in the said letters. (g) If the amount of Rs. 15.00 lakhs was re....
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....ling within those provisions will not be hit by the provisions of sec. 269SS of the Act. Further, the provisions of sec. 273B provide that the penalty u/s 271D may not be levied, if a reasonable cause is shown. We notice that the AO has duly examined the case of the assessee with regard to the above said provisions, which is evident from the following observations made by him:- "7. It cannot be a case where the lenders did not have any bank account or a case where there was compelling circumstance or a case where the assessee is located in a rural area or a case where the assessee dealing in crores was not aware of the legal aspect of receipt of a cash loan or there was any reasonable cause for receipt of this loan. It cannot be for the e....