TMI Blog2017 (10) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, there was reasonable cause for accepting loans in cash. In the case of M.Yeshodha (2013 (2) TMI 211 - MADRAS HIGH COURT) held that transaction of loan between father in law and daughter in law in cash cannot be subject matter of levy of penalty u/s.271D of the Act. Thus we are of the view that imposition of penalty u/s.271D of the Act cannot be sustained. - decided in favour of assessee - I.T. A. No.561/Bang/2017 - - - Dated:- 13-10-2017 - Shri N.V. Vasudevan And Shri Jason P Boaz, JJ. Appellant By : Shri Balram R Rao, Advocate. Respondent By : Smt. Padma Meenkashi, JCIT (D.R) ORDER Shri N.V. Vasudevan, This is an appeal by the assessee against the order dt.7.12.2015 of Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied if the assessee is able to show reasonable cause for the failure to comply with the provisions of Section 269SS of the Act. 4. In the penalty proceedings, the assessee submitted that the transactions in question cannot be strictly construed as a loan because of the fact that the person giving the money and the person accepting the same were relatives being members of the same family. Besides the above, the assessee submitted that transactions were genuine and that the assessee was under bona fide belief that there was no breach of any provisions of law. The assessee also submitted that the money was received for making investment on behalf of the close relatives and cannot be construed as a loan or deposit in strict sense of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that both in the case of a loan and in the case of a deposit, there is a relationship of debtor or creditor between the party giving money and the party receiving money. In the case of 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 and the benefit normally being the earning of interest from the party who customarily accepts deposit. In the case of loan it is the borrower at whose instance and for whose needs the money is advanced. The borrowing is primarily for the benefit of a borrower although the person who lends the money may also stand to gain thereby earning interest on the money lent. In the instant case, this condition was not applicable because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int venture of the family. Taking into consideration overall facts and circumstances of the case, it could be said that the aforesaid piece of legislation was not applicable in the instant case. By taking the liberal view and applying the golden rule of interpretation, the assessee had a reasonable cause within the meaning of section 27 3B. Therefore. the penalty should be deleted. 8. In the case of ACIT Vs. Vardaan Fashion (2015) 60 Taxmann.com 407 (Delhi-Trib.) it was held that where the Assessee intended to purchase a property jointly for which assessee's wife had advanced a sum of money to assessee and when deal for purchase of such house property did not materialize, assessee refunded said amount through cheque to his wife. On t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t payee cheque or account payee draft. Thus, there was a reasonable cause and no penalty should have been levied. From the above, it would be clear that the assessee had taken plea that firstly there was no violation of the provisions of section 269SS. Secondly, there was a reasonable cause. Thirdly, the assessee was under the bona fide belief that he was not required to receive the amount otherwise than by an account payee cheque or account payee draft. As an alternative submission, it was contended that the default could be considered either technical or venial breach of the provisions of law and, therefore, no penalty under section 271D was leviable. In view of the above discussion, no penalty under section 271D was leviable. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 273B of the Act. Since the assessee had satisfactorily established 'reasonable cause' under section 273B of the Act, he must be deemed to have established sufficient cause for not invoking the penal provisions of sections 271D and 271E of the Act against him. The deletion of penalty by the Tribunal was valid. 12. That the ratio of the above decision of the hon'ble Punjab and Haryana High Court would also be squarely applicable in respect of cash transaction between the assessee and his near relatives. 13. In the case of M.Yeshodha 351 ITR 265(Mad), the Hon ble Madras High Court held that transaction of loan between father in law and daughter in law in cash cannot be subject matter of levy of penalty u/s.271D of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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