TMI Blog2019 (9) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... lable in those agreements to sale and if the AO wanted to establish that the agreements were in fact executed and the amount was paid by the respective buyers to assessee in cash, he could have examined these buyers but this is not done by the AO. In fact, even no effort was made by the AO to do so. we are of the considered opinion that the addition made by the AO on the basis of the two draft agreements is not justified in the facts of present case Penalty u/s u/s. 271D - whether there was reasonable cause which prompted the assessee to accept the loan in cash ? - HELD THAT:- As per the copy of cash book available on page no. 1 of the paper book, it is seen that opening balance is ₹ 40,423/- and this payment of ₹ 9 Lakhs was paid out of the money provided by the Director Shri Dinesh Ranka. Hence, this is the fact that no cash was available with the assessee company as per the cash book to make this cash payment and hence. Cash borrowing to make this urgent cash payments appears to be reasonable. Under these facts, we are satisfied that the assessee has been able to establish that there was reasonable cause for accepting this loan in cash and hence, in view of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are excessive, arbitrary and unreasonable and liable to be deleted in toto. 7. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed. 3. It was submitted by ld. AR of assessee that copy of agreement to sale in favour of Debashish Sheel dated 31.07.2009 is available on pages 31 to 36 of the paper book. The second agreement with Shri Abid Sayed and Mrs. Nishad Begum Shah dated 28.07.2009 is available on pages 37 to 42 of the paper book. Thereafter it was submitted that on page no. 3 of the first agreement, it is noted that buyer Debashish Sheel has paid a sum of ₹ 6 Lakhs by way of cash to the vendor i.e. the present assessee M/s. DRA Projects Pvt. Ltd. Similarly, in para 2 of the second agreement available on page no. 39 of the paper book, it is stated that the purchaser have agreed to pay total sale consideration of ₹ 185 Lakhs and has paid a sum of ₹ 2 Lakhs by way of cash to the vendor as the advance amount towards the sale consideration. Thereafter it was submitted that both these agreements are although signed by the representative of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that an amount of ₹ 6 Lakhs and ₹ 2 Lakhs respectively was paid by the two buyers to the present assessee in cash but this is also true that these two agreements are although signed by the Director of the assessee company, these are not signed by the buyers. The department is asking the assessee to establish that the agreements were not executed which is the claim of the assessee. Merely because a proposed agreement was kept ready after typing and signature of the Director of the assessee company, it cannot be said that the agreement was executed and all the contents of such agreement were actually done when the agreements in question were admittedly not signed by the respective buyers. The complete name and address of both these buyers are available in those agreements to sale and if the AO wanted to establish that the agreements were in fact executed and the amount was paid by the respective buyers to assessee in cash, he could have examined these buyers but this is not done by the AO. In fact, even no effort was made by the AO to do so. On page no. 7 of the assessment order, the AO has reproduced the letter of the assessee dated 24.01.2013 in which it is stated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y liable to be set aside. 3. The learned Commissioner (A) ought to have appreciated that the amount received was neither a loan nor deposit and consequently the provisions of Sec.269SS have no application and accordingly the penalty levied u/s.271D of the Act was opposed to law and liable to be deleted. 4. On the facts the learned Commissioner (A) ought to have accepted the explanation offered and refrained from upholding the penalty u/s.271D of the Act. 5. The learned Commissioner (A) ought to have appreciated that the amount received from Sri.Dinesh Ranka was under compelled circumstances and the appellant was prevented by sufficient cause and consequently the penalty as levied u/s.271D of the Act was opposed to law and liable to be deleted. 6. Without prejudice the levy of penalty as confirmed by the learned Commissioner (A) is excessive and arbitrary and liable to be deleted in toto. 7. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed. 6. Various arguments were made by ld. AR of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard are explained by the assessee before the AO in penalty proceedings that the assessee company was compelled to pay cash on behalf of the assessee company to Suffia Khatooon Others who in turn paid the same to the occupants / tenants who were occupying the property. It was submitted before the AO that if the cash was not paid by company, the property of the assessee would have been litigated for a long time. It was also submitted that this is only out of compulsion this cash was paid by Shri Dinesh Ranka, Director of the assessee company and the same has been accounted for in the books of the assessee company. This explanation was rejected by the AO simply on this basis that why the assessee company has not paid this amount directly instead of paying it through its Director. The second objection of the AO is this that assessee company has not produced any proof to pay in the form of cash. Hence it is seen that this is not the objection of the AO that the money in question was not paid in cash. Regarding this objection that assessee has not furnished any documentary evidence in support of its claim then this was under compulsion, we are of the considered opinion that for s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
