TMI Blog2009 (9) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... [hereinafter referred to as the Act ]:- Sr.No. Name Amount(Rs) Amount (Rs.) 1. R.D. Shah (HUF) 20,000 10,000 19,000 15,000 2. R.D.Shah (Ind.) 25,000 33,000 Chq. No.822719, SBI, Dandiabazar for Sales Tax dt. 2/12/2004 3,900 Chq. No.822722 SBI, Dandiabazar for Sales Tax Dt.2/2/2005 3,508 1,35,408 3. Shashikant D Shah 90,000 1,55,000 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamdas Parekh (2008) 219 CTR 509 (Guj) and CIT v. Lokhpat Film Exchange (cinema), the assessee contended that there was a reasonable cause for accepting the money from family members and these being not in the nature of loans or deposit, penalty u/s.271D of the Act can not be levied. In the light of these submissions, the ld. CIT(A) cancelled the penalty holding as under: 3.4 I have gone through the facts of the case, submissions made by the AR and also the observation of the AO. It is true that the transactions entered between the parties concerned are relatives only who are agriculturists and the proof of having agri. Land and sale of agri. products have been furnished to the AO which have been accepted. The land is situated away from Vadodara where banking facilities are not available. Also the fund is brought in various names who are constituents of family and hence it can not be termed as loan or deposit. The appellant has accepted loans / deposits of ₹ 7,47,408/- on different occasions depending upon the urgency of transactions. The appellant has also filed copies of account reflecting the said entries. In the given matrix, it is clear that the appellant has not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord to show that these transactions were attached with certain conditions or stipulation as to period of repayment, rate of interest, manner of repayment, etc. so as to treat the said transactions as loan or deposit. Revenue have not placed before us any material, rebutting the findings of facts recorded by the ld. CIT(A). Since there is nothing on record to suggest that the transactions are in the nature of loan or deposit, apparently, the provisions of section 269SS are not attracted. The meaning of deposit and loan has been explained on page 8454 of the Chaturvedi and Pithisaria's Income-tax Law. Fifth Edition, Volume 5, as under: 'Deposit' and 'loan'- these two are not identical in meaning. - It is true that both in the case of a loan and in the case of a deposit there is a relationship of a debtor and a creditor between the party giving money and the party receiving money. But in the case of a deposit, the delivery of money is usually at the instance of the giver and it is for the benefit of the person who deposits the money - the benefit normally being earning of interest from a party who customarily accepts deposits. Deposits could also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of Inspection (Investigation) v. Kum. A.B. Shanthi [2002] 255 ITR 258 held that if there was a genuine and bona fide transaction and the assessee could not get a loan or deposit by account payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty. 5.3 Moreover, the ITAT Ahmedabad Bench 'C' in the case of Vir Sales Corporation v. ACIT (1994) 50 TTJ 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 assessees based on an ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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