TMI Blog2018 (8) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in cash of ₹ 21,49,943/-. Therefore, he levied penalty u/s.271E of the Act 100% of the amount paid in cash of ₹ 21,49,943/-. 4. On appeal, the CIT(A) confirmed the action of the Assessing Officer. 5. Ld A.R. argued that Section 269T of the Act talks of repayment of loan or deposit in cash and not of advance received from customers. Therefore, the case of the assessee is not covered u/s.269T of the Act and hence, the assessee is liable for penalty u/s.271E of the Act. 6. On the other hand, ld D.R. relied on the orders of lower authorities. 7. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. The Assessing Officer levied penalty u/s.271E of the Act for repayment of advance by the assessee in cash of ₹ 21,49,943/-. 8. On appeal, the CIT(A) confirmed the same. 9. Ld A.R. contended that provisions of section 269T is applicable in a case where the assessee repaid the advance received from the customers. 10. Ld D.R. supported the orders of lower authorities. 11. We find that the Assessing Officer has observed as under: The assessment u/s. 143(3) was made in the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in section 269SS is confined to loans and deposits only and does not extend to purchase/sale transactions. 13. The Hon ble Gujarat High Court in the case of CIT vs. Madhav Enterprise Pd Ltd., TAX APPEAL NO. 561 of 2013 order at 22.1.2014 has held as under: 1. This appeal is presented by the Revenue challenging the judgement of the Income Tax Appellate Tribunal dated 14.12.2012 raising the following question for our consideration : Whether the Appellate Tribunal has substantially erred in holding that advances against the booking of shops and offices is not deposit within the meaning of section 269SS and 269T of the Income Tax Act, against the decision of Allahabad High Court 303 ITR 9 in the case of Chaubey Overseas Corp. and thereby deleting the penalty of ₹ 15,92,940/ under section 271E of the Income Tax Act? 2. Having heard the learned counsel for the parties and having perused the decisions on record and in particular that of the tribunal, we notice that the respondent assessee is engaged in the business of construction activity. During the previous year relevant to assessment year 2006 2007, the assessee had paid a sum of ₹ 13,91,330/ to 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in the absence of reasonable cause. The rationale behind the provisions of sections 269SS and 269T is to prevent tax evasion, i.e., the laundering of concealed income by parties in the guise of cash loans or deposits in or outside the accounts. The provisions of sections 269SS and 269T therefore have application only in a limited way in respect of deposits or loans. When it is is neither deposit nor loan. The (provisions of section 269SS and 269T have no application at all. 11. The term loan or deposit as per explanation to section 269T means any loan or deposit of money which is repayable after notice or repayable after a period. In the case of the assessee the advance money/earnest money was not accepted with any pre conditions of repayment on or after an interval of time. CIT(A) has given a finding that considering the nature of repayment the amount returned does not fall under the narration of loan or deposit. Further he has also given a finding that the advance money received from the customers has not been converted into loan or deposit. He has further observed that in some cases the assessee had accepted the advance money in cash in excess of ₹ 20,000/ which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is a 'trade deposit' or is a 'deposit' simpliciter would arise and will have to be adjudicated upon by the authorities concerned which will lead to uncertainty as well as it will amount colossal wastage of time and energy both of the assessee as well as of the taxing authorities. Section 269T provides a definite mode of repayment which is also otherwise very convenient in day to day transaction as the payment/repayment by a crossed cheque or Bank Draft evidences the payment itself. It is easy to establish if payment/repayment is made through a Bank Draft or by crossed account payee cheque. 40. We do not find so. We have carefully perused the order of the CIT (A) which was in favour of the assessee. The said order of CIT (A) does not discuss ingredients of Section 269 T and it proceeds on the assumption that the additions made under Section 68 of the Income Tax Act having been set aside, no case of penalty has been made out as it was a trade advance. 41. The applicability of Section 269T is not dependent on facts as to whether the transaction is genuine or of doubtful character. Even the genuine deposits are also covered under Section 269T. The source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deposit of any nature. 10. What the respondent received from the prospective buyers was advance money simplicitor which was neither a loan nor a deposit even within the meaning of the said term assigned to under section 269T of the Act. When such amount is returned that too without interest, we do not find any applicability of section 269T of the Act. In case of Top Media Entertainment ltd.(supra), this Court had taken such a view also. 11. Even independently section 273B of the Act provides that notwithstanding anything contained in section 271E, no penalty shall be imposable on the person or the assessee as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. It was in this background that in somewhat similar circumstances, Madras High Court in case of Commissioner of Income tax v. Rugmini Ram Ragav Spinners P. Ltd. reported in (2008) 304 ITR 417(Mad) upheld the tribunal s decision of deleting the penalty making the following observations : 7. Hence, the factual finding by the authorities below is that the amount received is not a deposit or loan, but it is only share app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no material or evidence or any compelling reason produced by the Revenue to prove that the money received is a deposit or loan. The first appellate authority as well as the Tribunal have come to a correct conclusion after accepting the explanation offered by the assessee. It is a question of fact and the order of the Tribunal is not a perverse one. The concurrent finding given by both the authorities below is based on valid materials and evidence. In the case of CIT Vs. P. Mohanakala [2007] 291 ITR 278, the Supreme Court held that whenever there is a concurrent finding by the authorities below, no interference should be called for by the High Court. Under these circumstances, we do not find any error or legal infirmity in the order of the Tribunal so as to warrant interference. 12. In the result, we find no substance in the appeal, same is therefore, dismissed. 14. In view of above and keeping in view the provisions of section 273B of the Act, we find that the belief of the assessee that return of advance from customers is not prohibited by section 269T was a bonafide belief. Therefore, the levy of penalty u/s.271E of the Act of ₹ 21,49,943/- cannot be sustained. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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