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TMI Blog2019 (6) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... of sec.269SS of the Act. 2. We heard the parties and perused the record. The AO, while completing the assessment u/s 143(3) r.w.s. 254 of the Act noticed that the assessee has taken following loans in cash, which was in violation of provisions of sec. 269SS of the Act:- Smt. Indira Meghraj - 1,20,000 Shri Manohar Duseja - 1,00,000 2,20,000 Shri Manohar Duseja was father of assessee and Smt. Indira Meghraj was his paternal aunt. The penalty proceedings u/s 271D was initiated by Ld Addl. CIT. 3. Before Addl. CIT, the assessee stated that the loans were not taken at a time and the same was taken instalments. It was submitted that the assessee was under the belief that the provisions of sec.269SS of the Act would be attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both in the case of a loan and in the case of a deposit, there is a relationship of debtor or creditor between the party giving money and the party receiving money. In the case of deposit. the delivery of money is usually at the instance of the giver and it is for the ITA No.561/Bang/2017 benefit of the person who deposits the money and the benefit normally being the earning of interest from the party who customarily accepts deposit. In the case of loan it is the borrower at whose instance and for whose needs the money is advanced. The borrowing is primarily for the benefit of a borrower although the person who lends the money may also stand to gain thereby earning interest on the money lent. In the instant case, this condition was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a joint venture of the family. Taking into consideration overall facts and circumstances of the case, it could be said that the aforesaid piece of legislation was not applicable in the instant case. By taking the liberal view and applying the golden rule of interpretation, the assessee had a reasonable cause within the meaning of section 27 3B. Therefore. the penalty should be deleted. 8. In the case of ACIT Vs. Vardaan Fashion (2015) 60 Taxmann.com 407 (Delhi-Trib.) it was held that where the Assessee intended to purchase a property jointly for which assessee's wife had advanced a sum of money to assessee and when deal for purchase of such house ITA No.561/Bang/2017 property did not materialize, assessee refunded said amount th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by an account payee cheque or account payee draft. Thus, there was a reasonable cause and no penalty should have been levied. From the above, it would be clear that the assessee had taken plea that firstly there was no violation of the provisions of section 269SS. Secondly, there was a reasonable cause. Thirdly, the assessee was under the bona fide belief that he was not required to receive the amount otherwise than by an account payee cheque or account payee draft. As an alternative submission, it was contended that the default could be considered either technical or ITA No.561/Bang/2017 venial breach of the provisions of law and, therefore, no penalty under section 271D was leviable. In view of the above discussion, no pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 'reasonable cause' under section 273B of the Act. Since the assessee had satisfactorily established 'reasonable cause' under section 273B of the Act, he must be deemed to have established sufficient cause for not invoking the penal provisions of sections 271D and 271E of the Act against him. The deletion of penalty by the Tribunal was valid." 12. That the ratio of the above decision of the hon'ble Punjab and Haryana High Court would also be squarely applicable in respect of cash transaction between the assessee and his near relatives. 13. In the case of M.Yeshodha 351 ITR 265(Mad), the Hon'ble Madras High Court held that transaction of loan between father in law and daughter in law in cash cannot be subject mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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