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2009 (9) TMI 1005 - ITAT AHMEDABAD

2009 (9) TMI 1005 - ITAT AHMEDABAD - TMI - ITA No.1801/Ahd/2009 - Dated:- 11-9-2009 - Shri H.L.Karwa, Judicial Member, And Shri A.N.Pahuja, Accountant Member For the Revenue : - Shri C.K. Mishra, DR For the Assessee : - Ms. Urvashi Shodhan, AR ORDER A.N.Pahuja: This appeal by the Revenue against an order dated 04-03- 2009 of the ld. CIT(Appeals)-V, Baroda, raises the following grounds:- 1. On the facts and in the circumstances of the case the ld. CIT(A) has erred in cancelling the order levying .....

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ion of provisions of sec. 269SS of the Income-tax Act,1961[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 30,000 74,000 4,59,000 4. Suresh D Shah 10,000 9,000 60,000 79,000 5. Jayaben S Shah 10,000 10,000 T .....

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tural land holding and sale of agricultural produce was furnished before the AO. Their land is situate in village Amrol, where banking facilities are not available and therfore, she had to deal in cash. Since the transactions with the aforesaid relations were not in the nature of loan or deposit and were bona fide as also genuine, the provisions of section 269SS were not attracted in her case, the assessee pleaded. Inter alia, the assessee relied upon a number of decisions. However, the Addition .....

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754 (Mad.), ADI(Investigation) Vs. Kum. A.B.Shanti, Dy. CIT v. Vignesh Flat Housing Promoters (2007) 105 ITD 359 (Chennai); Shreenath Builders v. Dy. CIT (2000) 111 Taxman 142 (Mag.); Asstt. CIT v. Alfa Hydromec (P) Ltd. (2006) 99 TTJ (Jodh.) 405; CIT v. Natvaralal Purshottamdas 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 .....

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s 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 contravened the provisions of Sec .....

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r Goel,315 ITR 163 (P & H), CIT Vs. Maheshwari Nirman Udhyog,302 ITR 201 (Raj),Hindustan Steel Ltd. Vs. State of Orissa, 83 ITR 26 (SC) Addl. CIT Vs. I.M.Patel & Co.,107 ITR 214(Guj) (Guj),Vir Sales Corporation Vs.ACIT, 50 TTJ 130[Ahmedabad]. 5. We have heard rival submissions and gone through the facts of the case as also the decisions relied upon. Before proceeding further, we may have a look at the relevant provisions of sec. 269SS of the Act, which read as under: " No person sha .....

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has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: ………………………………………………………………………………&hel .....

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ion, the ld. CIT(A) concluded the aforesaid amounts received from her relatives by the assessee were not in the nature of loans and deposits . There is nothing on record 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 the .....

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ere 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 for safe-keeping or as a security for the performance of an obligation undertaken by the depositor. In the case of .....

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e obligation to return the amount so received. In the case of a deposit which is payable on demand, the deposit would become payable when a demand is made. In the case of a loan, however, the obligation to repay the amount arises immediately on receipt of the loan. It is possible that in case of deposits which are for a fixed period or loans which are for a fixed period, the point of repayment may arise in a different manner. But by and large, the transaction of a loan and the transaction of mak .....

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re was no evidence on record to show that infraction of the provisions was with the knowledge or in defiance of the provisions. It has further been held that there is nothing on record to indicate that the assessee had indulged in any tax planning or tax evasion and that there was reasonable cause rather if it is a violation, it is mere venial or technical. This decision of the ITAT has been upheld by Hon ble jurisdictional High Court in the case of CIT Vs. Bombay Conductors & Electricals Lt .....

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r 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 c .....

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casualness, specially when disclosure is contained in the accounts would establish reasonable cause within the meaning of provisions of sec. 273B of the Act. Coming to the facts of the case under consideration, we notice that no loss of revenue has occurred in this case and the genuineness of the transaction has not been doubted. The Hon ble Apex court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 had long ago settled the law that penalty is not to be ordinarily imposed unless the .....

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