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2019 (8) TMI 240

..... rom the said Commission Agent, therefore it cannot be said that the assessee received or paid amounts in cash as a deposit or loan rather the amounts received in cash were against the agriculture crops, therefore the provisions of Section 269SS and 269T of the Act were not applicable to the facts of the assessee’s case. See HISSARIA BROTHERS. [2006 (7) TMI 163 - RAJASTHAN HIGH COURT]. In the present case also the amount in question was received by the assessee against the sale of the crops so it was neither the loan nor the deposit, therefore the provisions of Section 269SS of the Act were not applicable and as such penalty levied by the A.O. and sustained by the Ld. CIT(A) under section 271D of the Act was not justified, accordingly the same is deleted. Penalty u/s 271E - contravention of the provisions of Section 269T - making the payments of the amount received by the assessee against the crop from the Commission Agent - HELD THAT:- As already mentioned in the former part of this order while deciding the issue relating to the levy of penalty under section 271D of the Act, that the transactions between the assessee and the Commission Agent were relating to the sale of agric .....

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..... t received as a loan but in normal course of business in anticipation that the crop during the period shall be sold and the amount so realized on sale of crop shall be adjusted against the amount received in account which was a common practice in agriculture sector where Commission Agent gave money on account to the agriculturists so that the crop was sold through them. It was further submitted that against the receipt of ₹ 8,50,000/- received in advance, the assessee sold crop wroth ₹ 1,02,354/- to the Commission Agent namely M/s Kundan Lal & Sons and in order to settle the account, balance amount of ₹ 7,47,646/- was paid back, the Assessee also furnished the account statement from the Commission Agent. The reliance was placed on the following case laws: • CIT Vs. Maheshwari Nirman Udyog (2008) 302 ITR 201 (Raj) • CIT Vs. Idhayam Publications Ltd. (2006) 285 ITR 221 (Mad) 5. The A.O. however did not find merit in the submissions of the assessee and levied the penalty of ₹ 8,50,000/- under section 271D of the Act. 6. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and furnished the written submissions which read as under: &quo .....

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..... of borrower's creditworthiness & collateral which can make it an unsecured loan. Further we would like to submit that cash transaction between agriculturist and commission agent is normal trade practice. Besides this, we would like to bring to your kind notice that if the agriculturist receive money in cash, money lender also gave him the money in cash and vice versa. These figures can be reconfirmed from Kundan Lal and Sons books and income tax returns. To prove this point we put reliance on the cases of - • Pr. CIT vs. M/s Tehal Singh Khara & Sons, village Changli Jaded PO Sherkahanwala, Distt. Ferogepur, CIT vs. M/s Idhayam Publications and CIT vs. Bombay Conductors & Electricals Ltd." 7. The Ld. CIT(A) after considering the submissions of the assessee sustained the penalty by observing in para 5.3 of the impugned order as under: 5.3. It is in the common parlance that Khasra Girdawari is a document, in which the patwari enters the name of owner, name of cultivator, land/khasra number, area, kind of land, cultivated and non-cultivated area, source of irrigation, name of crop and its conditions, revenue and rate of revenue, minimum twice in a year. On per .....

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..... eived by the assessee was an advance against the agricultural crops which were to be sold through the Commission Agent, therefore the provisions of Section 269SS were not applicable, since it was neither loan nor a deposit taken by the assessee. It was further submitted that the A.O. himself accepted that the assessee was an agriculturist and accepted the returned income shown by the assessee therefore the penalty was not leviable under section 271D of the Act. The reliance was placed on the following case laws: • CIT Vs. Manohar Lal Thakral 93 taxmann.com 156 (P&H) • Baldev Singh Vs. Addl. CIT 93 taxmann.com 212 (CHD Trib) • ITO Vs. M/s Shiv Enterprise in ITA No. 2911/Ahd/2009 (AHD-Trib) • CIT Vs. Hissaria Bros (2007) 291 ITR 0244 (Raj) • ITO Vs. Bharadiya Trading Co. (2003) 85 ITD 0042 (PUNE Trib) • ITO Vs. Harpal Singh Jaswant Singh (1995) 81 Taxman 42 (ASR Trib) • Harpal Singh Jaswant Singh Vs. ITO (1995) 82 Taxman 81 (ASR Trib) • CIT Vs. Saini Medical Store (2005) 277 ITR 0420 (P&H) • Mohanjeet Singh Vs. JCIT (2016) 70 taxmann.com 335 (CHD Trib) 10. I have considered the submissions of both the parties and perused the materi .....

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..... and 269T could be invoked, the findings of the Tribunal that reasonable cause existed for the failure to comply with the provisions of sections 269SS and 269T were findings of fact which did not give rise to any question of law. Penalty under sections 271D and 271E was not imposable and was rightly set aside by the Tribunal. 11. In the present case also the amount in question was received by the assessee against the sale of the crops so it was neither the loan nor the deposit, therefore the provisions of Section 269SS of the Act were not applicable and as such penalty levied by the A.O. and sustained by the Ld. CIT(A) under section 271D of the Act was not justified, accordingly the same is deleted. 12. In ITA No. 71/Chd/2019 the penalty amounting to ₹ 7,47,646/- (₹ 8,50,000.00 - ₹ 1,02,354.00) under section 271E has been levied for contravention of the provisions of Section 269T of the Act i.e; for making the payments of the amount received by the assessee against the crop from the Commission Agent. As I have already mentioned in the former part of this order while deciding the issue relating to the levy of penalty under section 271D of the Act, that the transacti .....

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