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TMI Blog2013 (3) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... 271D as they emerged from the order of CIT(A) upto assessment stage are as under:- "2.1 Under the provisions of section 271D of the Act, penalty is attracted for failure to comply with the provisions of section 269SS of the Act, which stipulates that no person shall take or accept from another person any loan or deposit otherwise than by an account payee cheque/draft exceeding ₹ 20,000/- or more, whether in whole or in part. In the present case, the assessee had taken loan from HUF exceeding ₹ 20,000/- as under: Date Amount of cash loan (Rs.) 01/12/2007 80,000/- 04/12/2007 25,000/- 05/12/2007 2,00,000/- 06/12/2007 2,00,000/- 1,00,000/- 19/12/2007 70,000/- 21/12/2007 1,00,000/- 24/12/2007 1,50,000/- 25/12/2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has levied the penalty on the ground that the assessee could not show the reasonable cause for accepting the deposit in cash and the assessee has pointed out in his submission that the transactions were genuine and bonafide and that the cash deposits were deposited in Savings Bank Account No. 4048 and thereafter the same was transferred to CC HP A/c. for business needs. The appellant has further submitted that the deposit is accepted from HUF. Sri Virambhai R. Patel is the same person whether as an individual or as Karta of HUF. In other words, there is no question of accepting any deposit from self. The appellant has submitted that it is true that under the I.T. Act, HUF and Individual are separately assessed but under the general law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, presence of two persons is necessary. Here there is only one person Sri Virambhai, Sri Virambhai can not given loan to himself. There are many decisions of the High Courts and the Tribunals holding that where there is a reasonable cause and the amount is taken from family members or paid to family members it is not a loan or deposit and provisions of section 269SS or section 269T are not applicable. Some of them are discussed below. (i) In the case of CIT vs. Natwarlal Purshottamdas Parekh (2008) 303 ITR 5 (Guj) the jurisdictional High Court held that where Tribunal found that the amounts alleged to have been received in cash or paid in cash were book entries and were part of transactions on behalf of family members, it could not be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court decision in the case of MLotilal Padampat Sugar Mills Co. Ltd. Vs. State of UP (1979) 118 ITR 326, which has been followed in the case of Dr. Deepak Muchala (1997) 58 TTJ (Bom) 524, a density by profession, it can be held that the assessee was not excepted to be well verse with fast changing laws. The facts of the present case are on much stronger footing, and therefore, it can be held that there was a reasonable cause and hence no penalty can be levied. (iii) As has been held in the case of Sunil M. Kalsiwal (supra) acceptance of loan by Individual from his HUF of which the assessee is the Karta, it does not warrant the imposition of penalty because there is common control of funds with the assessee. When one person acts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Natvarlal Purshottamdas Parekh 303 ITR 5 (Guj) 9.5 Vir Sales Corporation vs. ACIT 50 TTJ130 (Ahd) 9.6 CIT vs. Manoj Lalwani 260 ITR 590 (Jai) 10.1 The acceptance of deposit in cash in violation of Section 269SS is technical and venial breach if the transaction is otherwise bonafide and genuine. In the present case, the transaction is genuine and bonafide and therefore the question of levy of penalty does not arise. The Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa 83 ITR observed as under:- "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings and penalty, will not ordinarily be imposed unless the party obliged, either acted deliberately in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amp and deposited the same in his individual account No. 4048 maintained with Himatnagar Nararik Sahakari Bank from where he transferred these amounts in his running account No. 613 for business purpose. Thus the same person i.e. Mr. Virambhai Patel was acting in two different capacities. On these facts, the decision of Jaipur Bench of ITAT in the case of Chandra Cement Ltd vs. DCIT reported in 68 TTJ 35 is squarely applicable wherein following was held:- "When one single individual is managing the affairs of two concerns and the decision to transfer the funds from the one concern to another or to repay the funds could have been said to have been largely influenced by the same individual, it cannot be said that transaction partake the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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