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TMI Blog2016 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... is an individual. For the assessment year under consideration, a search and seizure operation under section 132(1) of the Act was conducted in case of the assessee as well as the company where she was a director. Consequent upon search, a notice under section 153A of the Act was issued to the assessee in response to which she filed her return of income on 28th October 2010, declaring nil income. In the course of assessment proceedings, on the basis of material available on record, it was found by the Assessing Officer that the assessee had received the following cash loan:- M/s. Armaan Estates Pvt. Ltd. Rs. 5,50,000 M/s. Infinite Realities Pvt. Ltd. Rs. 7,25,000 M/s. Oceanview Estates Pvt. Ltd. Rs. 2,50,000 M/s. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corntstene Estate Developers Pvt. Ltd. It was submitted, the said company had to register deeds of assignment towards transaction in immovable property which was required to be done on 8th January 2008. It was submitted, the company had to complete the process of registration on 8th January 2008, as it had coordinated with other signatories well in advance. He submitted, though the company had purchased two pay orders of Rs. 4,24,000 and Rs. 12,41,000 for this purpose on 7th January 2008, towards payment of stamp duty on two project agreements but since it was found that registration of document would only be done when the pay orders are cleared by banks and as the documents were urgently required to be registered on 8th January 2008, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority, finding that addition made under section 68 of the Act, in the meanwhile, has been deleted by the learned Commissioner (Appeals) he held that under the circumstances penalty under section 271D cannot survive. Accordingly, he quashed the order imposing penalty. 6. Learned Departmental Representative, relying upon the reasoning of the Add. CIT, submitted there being clear violation of section 269SS, penalty has to be imposed under section 271D. He submitted, the provisions contained under section 269SS, do not restrict the application of section 271D to transactions which are not bonafide. Therefore, learned Departmental Representative submitted, the first appellate authority was not justified in deleting the penalty. 7. Learned A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctricals Ltd., [2008] 361 ITR 328 (Guj.); and iv) Hindustan Steel Ltd. v/s State of Orissa, [1972] 83 ITR 26 (SC). 8. We have considered the submissions of the parties and perused the material available on record. It is evident from material on record, the Assessing Officer, while completing the assessment had treated the cash loan received of Rs. 17,25,000 from the four companies as not genuine and held it as income of the assessee under section 68 of the Act. Thus, once, the Assessing Officer treats the amount in question as assessee's income, he cannot treat the same as loan for invoking the provisions of section 269SS r/w section 271D. It is further evident, when the proceeding for imposition of penalty under section 271D, was initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed on receipt of cash loan over and above the prescribed amount. It is further provided, if any person accepts cash loan in violation of provisions of section 269SS, he will be subjected to levy of penalty under section 271D. However, imposition of penalty under section 271D is neither automatic nor mandatory as section 273B provides that no penalty is imposable if the assessee proves that there was reasonable cause for failure in complying to the provisions of the Act. A conjoint reading of sections 269SS, 271D and 273B of the Act would demonstrate that every violation under section 269SS will not culminate in imposition of penalty under section 271D. If the assessee proves that there was reasonable cause for non-compliance to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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