TMI Blog2019 (3) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... and the repayment was made in cash and therefore, the genuineness of these transactions also could not be doubted. The Co-ordinate Bench of the Tribunal in the case of Dillu Cine Enterprises (P) Ltd., Vs. Addl. CIT [2001 (9) TMI 248 - ITAT HYDERABAD-A] has considered the issue of penalty leviable for technical breach of provisions where the transactions are genuine, and has held that when the transactions are not for evasion of tax/concealment of income and bonafide belief of the assessee was that it could have made the payment in cash, penalty is not automatic and the penalty levied there under u/s. 271D of the Act is not valid - Thus we are inclined to accept the contentions of assessee of ‘bonafide belief’ for repayment of loans in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer. The assessee relied upon the judgment of the Hon'ble High Court of Delhi in the case of CIT Vs. Muthoot Financers [371 ITR 408] (Delhi) and also the decision of the Hon'ble High Court of Rajasthan in the case of CIT Vs. Lokpat Film Exchange (Cinema) [212 CTR 371] (Raj.) in support of above contentions. The Assessing Officer, however, was not convinced with the submissions of assessee. He observed that the decisions of the Hon'ble High Courts of Delhi and Rajasthan were rendered in the context of transactions between a firm and its partners, whereas in the present case of assessee, the transactions are between company, its directors and others and therefore the said decisions are not applicable to the case on ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon'ble High Court of Madras in the case of C.I.T. Vs. Ratna Agencies, reported in (2006) 284 ITR 609 (Mad). 4. The C.I.T. (Appeals) is not justified in not considering the fact that the assessee Company was running in losses right from the assessment year 2006-07 and the explanation of the assessee that the repayment of loans was made in cash under the bona fide belief that payment can be made in cash to the Directors of the Company and also to reputed Companies and the genuineness of the said transactions was not at all in doubt. 5. Any other ground or grounds that may be urged at or before the time of hearing . 2.2. Aggrieved, assessee preferred an appeal before the CIT(A), who confirmed the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money was brought by partners of assessee-firms and source of money had also not been doubted by Revenue Transaction made by assessee was bonafide and not aimed to avoid any tax liability . The Ld. Counsel has stated that in the case before us also, the genuineness of the repayment made in cash are not doubted and the assessee had submitted the said explanation in response to the show cause notice u/s. 271E of the Act. 4. Ld.DR, on the other hand, had argued that the assessee had clearly violated the provisions of Section 269T and has failed to give satisfactory explanation as to why the provisions of Section 269T were not followed and therefore the penalty order is to be sustained. 5. Having regard to the rival contentions and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer. As regards the other two parties, we find that assessee had taken vehicle loans and the repayment was made in cash and therefore, the genuineness of these transactions also could not be doubted. The Co-ordinate Bench of the Tribunal in the case of Dillu Cine Enterprises (P) Ltd., Vs. Addl. CIT in ITA No. 184/Hyd/1999 dt. 27th Sept. 2001 has considered the issue of penalty leviable for technical breach of provisions where the transactions are genuine, and has held that when the transactions are not for evasion of tax/concealment of income and bonafide belief of the assessee was that it could have made the payment in cash, penalty is not automatic and the penalty levied there under u/s. 271D of the Act is not valid . For the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions, while the transactions are held to be genuine, do not attract the provisions of s. 269SS. It is not the case of the Revenue that the amount involved were unaccounted transactions. It is an undisputed fact that the transactions are genuine. Both the assessee and the director were on the records of the IT Department and both declared these transactions to the Department. The Chapter XX-B and s. 269SS begins with the heading - Requirement as to mode of acceptance, payment or repayment in certain cases to counteract evasion of tax. The term certain' used therein, when read along with the legislative intent of curbing tax evasion, clearly means that all loans are not attracted. This section attracts only certain loans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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