TMI Blog2020 (4) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... f the same through journal entries. Accordingly, the assessee s case is squarely falls under a reasonable cause under section 273B of the Act and therefore, in our view, penalty levied by the addl. CIT under section 271D of the Act has rightly been deleted - Decided in favour of assessee. - ITA No.2576/Mum/2017 - - - Dated:- 20-2-2020 - Shri Pawan Singh, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Appellant : Shri Rahul Raman (CIT-DR) For the Respondent : Shri Vijay Mehta (AR) ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by revenue is directed against the order of ld. Commissioner of Income Tax (Appeals)-49, [CIT(A)], Mumbai in appeal No. CIT(A)- 49/IT-185 186/2015-16 dated 30.01.2017 for Assessment Year 2012- 13. The revenue has raised the following grounds of appeal: i. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty of ₹ 47,67,09,864/- levied u/s 271D of the Income Tax Act, 1961 on the ground that genuineness of the transaction made through journal entries is not in doubt. ii. On the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Lodha Properties Development Pvt. Ltd. [ITA No. 17215], CIT vs. Lodha Crown Buildmart Pvt. Ltd. Ors dated 06.02.2018. The revenue challenged the order of Hon ble Bombay High Court by way of Special Leave Petition (SPL) before the Hon ble Supreme Court, which has been dismissed vide order dated 06.02.2018, copy of which is also filed on record. The 5. On the other hand, the ld. Departmental Representative (CIT-DR) for the revenue after going through the various orders of Tribunal, decision of Hon ble Bombay High Court and the order of Hon ble Apex Court dated 06.02.2018 submits that on similar issues against the levy of penalty under section 271D/271E, the assessee has got relief from Tribunal, Bombay High Court and the SPL of the revenue has been dismissed by Hon ble Apex Court. The ld. DR submits that he strongly relied upon the order of Assessing Officer. 6. We have considered the submission of both the parries and perused the order of lower authorities. We have also gone through the various decisions of co-ordinate bench of Tribunal as well as Hon ble jurisdictional High Court in assessee s group case and the order passed by Hon ble Apex Court. We have noted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints or reasonable cause for having transactions in respect of each and every journal entry with its group concerns. 3. We noted facts that the Addl. CIT levied the penalty under section 271D of the Act for violation of the provisions of section 269SS of the Act for accepting loans / deposits from Suryoday Buildwell Farms Pvt. Ltd. amounting to ₹ 16,21,83,648/-. However, the CIT(A) considered the provisions of section 273B of the Act held that neither the genuineness of receipts of loans or deposit by way of adjustment through book entries carried out in the normal course of business has been doubted in the regular assessment and there is a reasonable cause exist in the case of the assessee because in view of the decision of Hon'ble Bombay High Court in the case of CIT Vs Triumph International Finance (I) Ltd (2012) 345 ITR 270 (Bom.), the same was delivered only on 12.06.2012 and on that date Hon'ble Bombay High Court has clarified the position that the receiving of deposits or loans through journal entries would certainly be hit by the provisions of section 269SS and 269T of the Act. According to CIT(A), prior to the decision of Hon'ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries would certainly be hit by the provisions of section 269SS and 269T of the Act as under: - (d) We find that the impugned order of the Tribunal has on application of the test laid down for establishment of reasonable cause, for breach of Section 269SS of the Act by this Court in Triumph International Finance (supra) found that there is a reasonable cause in the present facts to have made journal entries reflecting deposits. The Tribunal while relying upon the order of this Court in Triumph International Finance (supra) has held that in the present facts, neither the genuineness of receipt of loans / deposits by way of an adjustment through journal entries carried out in the ordinary course of business has been doubted in the regular assessment proceedings. It held in the present facts the transaction by way of journal entries was undisputedly done to raise funds from sister concerns, to adjust or transfer balances to consolidate debts, to correct clerical errors etc. Further, the Tribunal records that as observed by this Court in Triumph International Finance (supra) that journal entries constituted a recognized modes of recording of transactions and in the absence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable cause or not, is a question of fact and unless it is shown to be perverse, we would normally not interfere. (g) In the above circumstances, the view taken by the Tribunal on the facts before it, is a possible view and does not give rise to any substantial question of law. 6. In view of the judgement of Hon'ble Bombay High Court in the case of Lodha developers Pvt. Ltd (supra) and the decision of Hon'ble Bombay High Court in the case of Triumph International Finance (I) Ltd (supra) dated 12-06- 2012, wherein it is held that where loan / deposit has been repaid by day to day accounts of the parties through journal entries, it must be held that the assessee has committed default for the contravention of provisions of section 269SS or 269T as the case may be. But the Hon'ble Bombay High Court has clarified the position with effect from 12.06.2012 date when the judgement was pronounced and prior the date of decision of Hon'ble Bombay High Court in the case of Triumph International Finance (I) Ltd (supra) there was a reasonable cause for the assessee to receive deposit of loan or repayment of the same through journal entries. Accordingly, the assessee& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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