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2019 (6) TMI 396

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..... 2009 (3) TMI 131 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that the family transactions would fall within the meaning of “reasonable cause” u/s 273B of the Act. Hon’ble Madras High Court has cancelled the penalty in respect of loan transactions between father in law and daughter in law in the decision of M.Yesodha [2013 (2) TMI 211 - MADRAS HIGH COURT] - Decided in favour of assessee. - ITA No.2323/Bang/2018 - Dated:- 4-6-2019 - Shri N.V Vasudevan, Vice Presidnet And Shri B.R Baskaran, Accountant Member For the Appellant : Ms. Preethi S Patel, Advocate For the Respondent : Dr. P.V Pradeep Kumar, Addl. CIT (DR) ORDER PER B.R BASKARAN, ACCOUNTANT MEMBER The assessee has filed this appeal challenging the order .....

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..... ty of ₹ 2,20,000/- u/s 271D of the Act. The Ld CIT(A) also confirmed the same. 4. Aggrieved, the assessee has filed this appeal before us. 5. We notice that the co-ordinate bench of Tribunal has considered an identical issue in the case of Smt. Deepika vs. Addl CIT (ITA No.561/Bang/2017 dated 13.10.2017) and held that the transactions between family members would not attract penalty u/s 271D of the Act. For the sake of convenience, we extract below the operative portion of the order passed by the Co-ordinate bench in the above said case:- 7. We have considered the rival submissions. The facts as decided by ITAT Kolkata in the case of Dr.B.G.Panda were that loan transactions were carried out in cash in violation of the provisions of Se .....

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..... to destroy the feeling of mutual confidence which is the most enduring solace of married life. In the instant case, the wife gave money to husband for construction of a house which was naturally a joint venture for the property of the family only. This transaction was not for commercial use. The amount directly received by the husband. i.e.. the assessee. was to the extent of ₹ 17.000 only and the balance amount of ₹ 26.000 was given by payment directly to the supplier of the material required for the construction of the house. Though the expenditure was apparently incurred by the husband being the karta/head of the family, it could not be said that the wife could not have any interest of her own in this house being constructed. .....

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..... e for the purpose of investment in the acquisition of immovable property. The Assessing Officer had levied the penalty under section 271D which was cancelled by the Income-tax Appellate Tribunal holding as under : "Even keeping in view the contents of the Departmental Circular No. 387 [1985] 152 ITR (St.) 1), it was never the intention of the Legislature to punish a party involved in a genuine transaction. Therefore, by taking a liberal view in the instant case, the assessee had a reasonable cause within the meaning of section 273B. Thus, keeping in view the entire facts of the instant case, and also keeping in view the intention of the Legislature in enacting the provisions of section 269SS, it was to be held that the assessee was pre .....

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..... of the Income-tax Appellate Tribunal, Amritsar Bench, would be squarely applicable to the facts of the assessee's case. Here also, the daughter and member of the HUF have given money for certain specific purpose. The source and genuineness of the loan has been accepted by the AO. The cash loans in question therefore cannot be said fall within the mischief of Sec.269SS of the Act as near relatives cannot be said to be "Other person" within the meaning of Sec.269SS of the Act. In any event in the circumstances of the case, there was reasonable cause for accepting loans in cash. 11. In the case of CIT v. Sunil Kumar Goel [2009] 315 ITR 163/183 Taxman 53, the Hon'ble Punjab and Haryana High Court held as under : "A family .....

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..... il Kumar Goel (supra), wherein it has been held that the family transactions would fall within the meaning of reasonable cause u/s 273B of the Act. Further the Hon ble Madras High Court has cancelled the penalty in respect of loan transactions between father in law and daughter in law in the decision of M.Yesodha (supra). The decision rendered in the case of Smt. Deepika was followed by another co-ordinate bench in the case of Shri Sanmathi Ambanna (ITA No9.782/Bang/2017 dated 02-01- 2019). Accordingly, consistent with the view taken by the coordinate bench in the case of Smt. Deepika (supra), which has been rendered by following various decisions of High Courts and Tribunal, we hold that the impugned penalty of ₹ 2.20 lakhs is not su .....

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