TMI Blog2010 (8) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... 71D of the I.T. Act but ought to have deleted the same. Under the circumstances, the order of ld. CIT(A) may kindly be set aside and the appeal of the appellant may kindly be allowed. 2. The only issue involved in this appeal is that ld. AO levied and ld. CIT(A) confirmed of penalty of ₹ 1,18,000/- under section 271D. 3. The facts of the case are that assessee deposited in cash ₹ 1,18,000/- on 12.4.2004 in his current account maintained for the proprietary business in the name of M/s Adcom with Union Bank of India, Relief Road Branch having A/c No.11162. It was explained that a sum of ₹ 1,00,000 was borrowed from his son Shri Rahul H. Shah on 7.4.2004 and another sum of ₹ 18,000/- was borrowed by him on 12.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged or established by the AO in the assessment order for accepting the loan amount of ₹ 1,18,000/- by way of cash from Shri Rahul H. Shah. It is also important to note that no Search action u/s 132 or Survey action u/s 133A of the IT Act has taken place in my case. Hence, it is not the case of introduction of cash to justify or establish the valid source of cash found during the course of such action. Thus, the object and the intent as contained under the said Chapter has no application in my case vis- -vis it is not the case of levy of penalty u/s 271-D of the IT Act. 2. Where contravention alleged against assessee in accepting loans in cash in excess of prescribed limit did not result in any unaccounted transaction such as l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn by the assessee is not a reasonable cause. He observed as under :- 5. The matter has been considered but I am afraid I cannot agree with the Authorised Representative. Section 269SS imposes an obligation of an assessee to do transaction through banking channels, over a certain specified limit, and for not following this section penalty is leviable u/s 271D. Having committed a default u/s 269SS the only escape for non-levy of penalty is either to be covered by one of the proviso to section 269SS or section 273B, if the assessee is able to advance a reasonable cause which prevented him to follow such a laid down provision of law. A reasonable cause has to be equated to an happening which assessee could not have foreseen and which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the assessee. Accordingly assessee was compelled to make immediate deposit. The deposit in cash was accepted as genuine by the ld. AO as no addition under section 68 has been made. (2) The AO has not initiated penalty proceedings during the course of assessment proceedings and hence levy of penalty is bad in law. (3) Loan has been taken from the son therefore, it will not fall within the definition of other person as mentioned in section 269SS. If a loan is taken from close relative then provision of section 269SS would not be applicable. (4) The provision of section 269SS is for the countering the tax evasion and in the case of the assessee there is no allegation that loan has been taken to evade the tax. (5) The AO ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been found false or incorrect. This is one of the plausible explanations for depositing money in cash. His OD limit stated by the bank was approaching fast and there was an apprehension of cheques being dishonoured and accordingly immediately cash was deposited by borrowing from Mrs. M. K. Trivedi. The authorities below have not made any addition in respect of this cash deposit meaning thereby that they have accepted it to be genuine borrowing. Once this is so and genuineness of the transaction is not doubted, then explanation furnished by the assessee should have been considered satisfactory unless any material is collected by the AO to show that facts stated in the explanation are incorrect or false. The AO should have verified from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on v AC1T (1994) 50TTJ 130(Ahd), have held that in respect of transactions inter se between the sister concerns made with a view to meet the business needs under The bona fide belief and with reasonable cause, no penalty is imposable under such circumstances. In the case under consideration, admittedly transactions are between family members. Hon'ble Punjab Haryana High Court in the case of Sunil Kumar Goel{supra} while relying upon their decision in the case of CIT Vs.Saini Medical Store,277 ITR 420(P H) concluded that bonafide belief coupled with the genuineness of transactions would constitute reasonable cause within the meaning of provisions of sec, 273B of the Act It was held that a family transaction between two independent asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
