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2016 (5) TMI 416 - ITAT MUMBAI

2016 (5) TMI 416 - ITAT MUMBAI - TMI - Penalty u/s 271E - Held that:- We found that amount of ₹ 41 lacs is not a loan or deposit but appropriated out of booking advance of ₹ 1.49 crores. There is no liability to return the amount in question. In this case, refund is of part of booking amount, not included in loans & deposits as per Sec. 269T. Thus, penalty u/s. 271E is not leviable. - Decided in favour of assessee. - ITA NO. 2329/MUM/2014 - Dated:- 30-3-2016 - SHRI R.C. SHARMA, ACCOU .....

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is barred by limitation. 2. BECAUSE, ld. CIT(A) has erred in law in upholding the order of the AO and ignoring the fact that the said order is invalid since no valid notice was issued u/s. 274 r.w.s. 269T of the Act for initiating penalty proceedings. 3. BECAUSE, ld. CIT(A) has erred in law in ignoring the fact that the order passed by the AO is invalid since there is no finding made in the order that any loan or deposit amounting to ₹ 41,00,000/- has been received by the appellant in resp .....

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brief are that the assessee company is engaged in the business of construction and development of real estate had accepted booking of flat in the name of Shri Haresh Sadhwani and Smt. Roma Sadhwani. The Sadhwanis had deposited an amount of ₹ 1,49,40,000/- towards booking of this flat at project Ellora Castle at CBD-Belapur. The Sadhwanis and Assessee company had entered into Memorandum of Understanding dt. 11.12.2008 for a payment of ₹ 41,00,000/- on account of extra amenities and in .....

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re forced to cancel the MoU for extra amenities and facilities and simply buy the shell structure. Thus they entered into a Deed of Compromise on 30.8.2010 cancelling the earlier MoU dt. 11.12.2008 for extra amenities. The Sadhwanis had made a further payment of ₹ 3.78 crores for the flat and as part of compromise terms, an amount of ₹ 41,00,000/- collected on account of extra amenities forming part of the initial payment of ₹ 1,49,40,000/- was refunded to Sadhwanis in the form .....

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ture of Loans or Deposits. However, in the given case the amount of Rs, 41,00,000/- repaid to Mr. Haresh Sadhwani was on account of cancellation of amenities which was earlier booked by Mr Haresh Sadhwani in his flat in the project "Ellora Castle". We would also like to draw your attention that the flat was registered in the name of Haresh Sadhwani & Roma Sadhwani on 16.12.2008 & repayment made were after 16.12.2008, so the amount repaid was part of the sale consideration which .....

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o in section 269T otherwise than in accordance with the provisions of that section where as in the given case the repayment of ₹ 41,00,000/- does not fall in the category of loans or deposits as mentioned u/s 269T of the I.T. Act, hence penalty u/s 271E shall not be applicable on the said transactions amounting to ₹ 41,00,000/- "(Emphasis, supplied)" 3. However, the AO did not accept assessee s contention and levied penalty u/s 269T r.w.s. 271E. 4. By the impugned order, CI .....

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by the AO regarding alleged violation of Sec. 269SS and 269T in his assessment order. Thereafter, AO referred the matter to JCIT for imposition of penalty vide letter dt. 6.2.2012. The JCIT passed penalty order upon receipt of information from the AO. It was argued by the ld. AR that the Income Tax Act, 1961 specifies authority for imposition of penalty and not for initiation of penalty, and that preliminary acts by the AO constitute initiation, which is anterior in time to the imposition of pe .....

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hip firm engaged in the business of real estate development. During the year under consideration, the Assessee firm had received an amount of ₹ 1,49,40,000/- from Mr. Haresh Sadhwani and Mrs. Roma H. Sadhwani as booking advance towards the flat booked by them in the project named Ellora Castle along with amenities. Later, as the parties had cancelled the amenities in the said flat, an amount of ₹ 41,00,000/- was refunded on various dates by bearer cheques. She further placed reliance .....

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in the case of Ranisati Paper Mills Pvt. Ltd. which expounding on the hierarchical system of courts in India had ruled that judgment of any High Court, even non jurisdictional shall prevail over judgment of any bench of ITAT. It was also submitted that the impugned order of CIT(A) confirming the penalty was passed on 28.2.2014 when the benefit of Lodha s ratio was not available. 7. On the other hand, the ld. DR relied on the order of the lower authorities and contended that the decision of ITAT .....

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dered the rival contentions, carefully gone through the orders of the authorities below and also deliberated on the judicial pronouncements referred by the lower authorities in their respective orders as well as cited by ld. AR and ld. DR during the course of hearing before us. From the records, we found that AO has discussed details of alleged violation of Sec. 269T in his order. The AO mentioned fact of initiation of penalty u/s. 271E in his order. The AO referred the matter to JCIT for imposi .....

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