TMI Blog2019 (5) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... f the cash transaction has not been doubted between the son and father. Therefore, the penalty levied u/s 271D of the Act is not sustainable. The controversy arises merely delay in preparation of Gift Deed can cause prejudice to the assessee by holding that the cash transaction is not in the nature of the gift. In this regard we note that a Gift Deed is nothing but an understanding in writing which proves/establishes the nature of transaction carried out between the parties. Once the donor has agreed/confirmed that he had given a gift to the assessee, then the same cannot be denied merely on the ground that the Gift Deed was not prepared at the relevant time. Even if it was given a loan at that relevant time and later on the parties agreed to treat the same as a gift, then the matter ends here as the transaction is between son and father which was substantiated with the gift deed and confirmation. There is the basic difference between the gift and loan/Deposit. A gift is never paid back/return to the donor while it is not so in the case of the loan. There is nothing on record which shows that money is paid back to the father by the assessee directly or indirectly - dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee also claimed that he had shown money received from his father as a gift in the books of accounts. 4.2 However, the AO during the penalty proceedings observed certain facts as detailed under: i) In the cash book furnished by the assessee, there was no mention that the assessee has received a gift from this father. ii) The gift was received in the previous year 2007-08, but the Gift Deed was done on 17/05/2011. The Gift Deed was also not notarized. iii) There was no evidence filed by the assessee about the availability of cash in hand with his father within one month before the date of the final transaction. iv) The assessee received the gift on different dates in piece meals. 4.3 In view of the above the AO held that the cash received by the assessee from his father does not represent the gift as claimed by him. Therefore, the AO held the assessee had received an unsecured loan from his father in contravention to the provisions of section 269SS of the Act. Accordingly the AO levied the penalty of ₹ 2,54,000/- under the provision of section 271D of the Act. 5. Aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the provision of section 269SS was brought under the statue intending to deterring the assessee of justifying unaccounted cash found during search/survey. As such the object of the provision of section 269SS was to discourage the assessee to justify their unaccounted money by taking cash entries from different persons. In the case on hand, the genuineness of the transaction was not doubted by the authorities below. Therefore, the penalty cannot be levied u/s 271D of the Act. 6.4 Without prejudice to the above the Ld. AR for the assessee also submitted the penalty can be levied on the amount exceeding ₹ 20,000/- as specified u/s 269SS of the Act. Accordingly, the Ld. AR prayed to give the relief from the penalty for the basic amount of cash transaction of ₹ 20,000/. The Ld. AR in support of his claim relied on the judgment of Hon ble Rajasthan High Court in the case of CIT Vs. Ajanta Dyeing Printing Mills reported in 264 ITR 505. 7. On the other hand the Ld. DR submitted that there was bank account of the father of the assessee. Therefore, there was no reason to advance the money to the assessee in cash. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person from taking to accepting, after 30th June, 1984 from any other persons any loan or deposit otherwise than by an account payee cheque or account payee bank draft if the amount of such loan or deposit or the aggregate amount of such loan and deposit is ₹ 10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or the aggregate amount of such loan and deposit is ₹ 10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), and the amount or the aggregate amount remaining unpaid is ₹ 10,000 or more. The prohibition will also apply in cases where the amount of such loan or deposit, together with the aggregate amount remaining unpaid on the date of which such loan or deposit is proposed to be taken is ₹ 10,000 or more. 9.1 From the above we note that the provision of section 269SS was brought under the statue to discourage the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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