TaxTMI 
TaxTMI 
2018 (6) TMI 1031
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....E of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for alleged violation of provisions under s.269-SS and 269-T of the Act which seeks to prohibit certain cash transactions received and paid in cash. 2. Common and inter-connected issues involved in both the appeals for the same assessment year for the same assessee. Accordingly, both the appeals are disposed of by this common order. 3. Brief facts of the case is this that the assessee on 28.05.2007 taken a loan of Rs. 1,00,000/- in cash from his father Bhailalbhai B.Patel as the assessee had to pay advance of Rs. 2,50,000/- for acquiring Banakhat Rights of a land which was paid on the very next day i.e. 29.05.2007. The assessee had in urgent need of money and therefore, ....
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.... s.271-D and 271-E of the Act separately. 5. The assessee approached the CIT(A) for relief against the aforesaid orders of the Jt.CIT. The CIT(A) examined the submissions of the assessee but however did not find it convincing. He accordingly denied relief sought in tandem. The relevant para of the order of the CIT(A) in respect of penalty imposed under s.271- D of the Act (which is broadly the same as per imposition of penalty made under s.271-E of the Act) are reproduced hereunder: "5. The AR of the appellant submitted that the assessee borrowed sum of Rs. 1 lakh in cash from his father on 28th May, 2007 as he had to give advance of Rs. 2.5 lakh for acquiring banakhat rights of property being land The assessee was having reasonable caus....
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.... considered opinion, the assessee was not able to establish any genuine and reasonable cause for violation of the relevant provisions of the Act. Accordingly, the appeal of the assessee is dismissed." 6. Aggrieved, the assessee preferred appeals before the ITAT. 7. At the time of hearing of the appeal, the Ld.AR reiterated the submission as was made by the assessee before the lower authorities. He further relied upon the judgement of Hon'ble Jurisdictional High Court in the case of CIT, Ahmedabad- IV, vs. Maa Khodiyar Construction (2014) 45 taxmann.com 566 (Gujarat) as well as the order passed by the Ld.ITAT Kolkata Bench in ITA Nos.331 & 332/Kol/2010 passed on 25/11/201. 8. No serious objection has been raised by the Ld.DR in this resp....
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....ll in the ambit of section 269SS of the Act. Accordingly, these appeals of the assessee are allowed." 9.1. The moot points required to be considered by the Hon'ble Gujarat High Court were as follows:- "(A) "Whether in the facts and circumstances of the case, the ITAT has erred in law in rejecting the Revenue's appeal against the decision of CIT (A) in dealing the penalty levied u/s. 271D of the Income-tax Act, even though the assessee is not covered by the exception to Section 269SS of the Act provided in second proviso to the said Section 269SS, as the assessee had taxable income under the Act and accepted cash exceeding the limit provided under the said Section 269SS ?" (B) "Whether 'genuineness of the loan/deposit' or ....
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....given satisfactory reason for taking such loan. His bona fide belief that such transactions would not attract provision of Section 269SS on the ground that they were agriculturists and lived in remote villages also was one of the grounds which has weighed with both the authorities. 14. In view of forgoing discussion, we are of the opinion that no error has been committed by both the authorities below in deleting the penalty. It is true that the respondent has income from other business and these transactions were not between agriculturists having only agriculture income, not liable to tax which have been exempted from such rigor of law and yet, the cause advanced is when found to be sufficiently reasonable, no interference would be desir....