Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2013 (3) TMI 809

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 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/- .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... gone through the penalty order and the submission of the appellant very carefully. The AO has levied the penalty of ₹ 13,75,000/- u/s. 271D of the IT Act for acceptance of deposits in cash in violation of section 269SS as the appellant has not proved the reasonable cause for taking such cash loans. The appellant has submitted that the JCIT 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 sub .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the same in his individual Account No. 4048 maintained with Himatnagar Nagarik Sahakari Bank from where he transferred those amounts in his loan A/c. 613 for immediate business needs. Thus it was business exigency that the amounts were transferred from HUF to Indl. Account by the same person. It is not loan as alleged in the notice. For accepting loan, 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 app .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rayan Ram Chhabda vs. ITO (2005) 96 ITD 163 (Jodh- Tri)(TM) (ii) ITO vs. Sumit M Kasliwal (2000) 68 TTJ 35 (Pune). (iii) ITO vs. Rajendra Trading Co. (1994) 48 ITD 210 (Chd.) 9. Following the decisions cited in para 8(v) above, it can be held that- (i) There was a technical or venial breach for which no penalty is leviable. (ii) Applying the Hon. 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 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e) there is no revenue loss. It is therefore clear that there is a reasonable casue for accepting cash deposits for the reasons stated herein above. 9. The above view is supported by following judicial decisions: 9.1 CIT vs. Balaji Traders 303 ITR 312 (Mad) 9.2 Chandra Cement Ltd. vs. DCIT 68 TTJ 35 9.3 CIT vs. Bhagwati Prasad Bajoria HUF 263 ITR 487 9.4 CIT vs. 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 an .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e factual position that assessee Sri Virambhai Patel who is partner in his individual capacity of International Agro Equipments at Bhavnagar is also in HUF capacity running a business in the name of Agri Service Centre at Tajpur Camp is not disputed. This is also not in dispute that Sri Virambhai Patel brought cash on different dates from his business of Agro Service Centre Tajpur Camp 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 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates