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2016 (11) TMI 951 - ITAT DELHI

2016 (11) TMI 951 - ITAT DELHI - [2016] 50 ITR (Trib) 328 - Penalty u/s 271D - Held that:- The hon'ble jurisdictional High Court in the case cited as CIT v. I. P. India P. Ltd. [2011 (11) TMI 252 - DELHI HIGH COURT ] while examining the identical issue has held that share application money is not a "deposit" within the meaning of section 269SS nor it is a "loan" by any stretch of imagination and as such, penalty cannot be imposed under section 271D of the Act. So, finding no infirmity or illegal .....

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as "the Revenue") by filing the present appeal sought to set aside the impugned order dated October 4, 2013 passed by the Commissioner of Income-tax (Appeals)-XXI, New Delhi qua the assessment year 2006-07 on the grounds inter alia that : "(i) The learned Commissioner of Income-tax (Appeals) erred in law and on the facts of the case in cancelling the penalty of ₹ 95,35,750 imposed by the Additional Commissioner of Income- tax, Range 18, New Delhi under section 271D of the I .....

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are : During the scrutiny proceedings qua assessment year 2006-07 completed under section 143(3) of the Income-tax Act, 1961 (for short "the Act"), it was noticed that the assessee had received a sum of ₹ 1,00,35,750 in cash which was claimed to be against share capital of ₹ 5,00,000, share premium of ₹ 36,00,000 and share application money of ₹ 59,35,750, out of which except initial subscription to the share capital of ₹ 1,00,000, there was no premium and .....

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appearance and filed written submissions. Finding the explanation furnished by the assessee not tenable, the Assessing Officer came to the conclusion that the assessee has failed to prove genuineness and creditworthiness of the parties from whom he has received the money by producing them, the amount of ₹ 1,00,35,750 being cash received by the assessee-company, claimed to be share capital, share premium and share application money is only a cover up explanation for circumventing the provi .....

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despite issuance of the notice of hearing for April 11, 2016 and July 4, 2016 and consequently, we proceeded to decide the present appeal with the assistance of the learned Departmental representative as well as on the basis of documents available on the file. 6. We have heard the learned Departmental representative for the Revenue to the appeal, gone through the documents relied upon and the orders passed by the Revenue authorities below in the light of the facts and circumstances of the case. .....

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Assessing Officer by the Tribunal ; that in the fresh assessment made by the Assessing Officer, he has accepted the share application money of ₹ 54,70,000 as explained one and balance amount of ₹ 44,65,750 as unexplained amount. 9. To adjudicate the controversy at hand, provisions contained under section 269SS of the Act are reproduced for facility of reference as under : "269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter i .....

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he 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 : Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,- (a) Government ; (b) any banking company, post office savings bank or co-operative bank ; (c) any corporation established by a Central, State or Provincial Act ; (d) any Gove .....

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