TMI Blog2020 (10) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... in a particular manner in a balance sheet will not be conclusive for determination of nature of transaction. The stand of the assessee towards purchase of tobacco is consistent and emanating from the orders of the lower authorities. Are inclined to appreciate the stand of the assessee in affirmative on merits. On merits, the case of the assessee deserves to be accepted. Hence, the penalty imposed u/s 271E by the competent authority (JCIT) is set-aside and quashed. - Decided in favour of assessee. - I.T.A. No. 613/Ahd/2017 - - - Dated:- 13-10-2020 - SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER And Ms. MADHUMITA ROY, JUDICIAL MEMBER Appellant by : Shri M. J. Shah, AR Respondent by : Shri Lalit P. Jain, Sr. D.R. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal objection, the Ld. AR referred to the assessment order and pointed out that there is no mention of initiation of penalty under Section 271E for alleged contravention of Sec. 269T of the Act. He thereafter referred to the decision of Hon ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills Ambala City [2015] 379 ITR 521(SC) for the proposition that it is incumbent upon the AO to form satisfaction in the assessment order for levy of penalty under Section 271E of the Act. It was also submitted that the proposition laid down by the Hon ble Supreme Court has been followed by the Tribunal in ITA 3109/Ahd/2015, in the order dated 21.03.2017 in the case of Prithvi Singh Poonia vs. JCIT. The Ld. AR thus submitted that in the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, the Ld. DR contended that the legal arguments put forth on behalf of the assessee is intrinsically opposed to the scheme of the Act. The Ld. DR referred to the provision of Sec. 271 (1B) of the Act and submitted that the law requires the satisfaction of the AO in the course of the assessment proceeding is only with reference to the initiation of penalty proceeding under Section 271(1)(c) of the Act. It was submitted that provisions of Sec. 271E is totally different in its nature and spirit and has no connection with the assessment proceedings per se. It was submitted that the imposition of penalty under Section 271E is not dependent upon the assessment under Section 143(3) at the first instance. Secondly, as per sub-Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions referred to the earlier year has not been scrutinized by the department. This apart, there is no proof for such purchases made in the earlier years. It was thus contended that there is no justification in the arguments of the assessee that the transaction has been accepted in the past. It was thus contended that the doctrine of res judicata would thus not apply. 4. We have carefully considered the rival submissions. The imposition of penalty under Section 271E is in question. We shall first address to the legal objection raised by the assessee as narrated in the preceding paragraph. The decision of the Hon ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills Ambala City proceeds on the premise that no satisfaction has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The similar payment in cash has been made in the earlier year which has not been disputed by the Revenue. The presumption of bona fide good faith would, thus, arise in favour of the assessee. Mere nomenclature in a particular manner in a balance sheet will not be conclusive for determination of nature of transaction. The stand of the assessee towards purchase of tobacco is consistent and emanating from the orders of the lower authorities. We, thus, are inclined to appreciate the stand of the assessee in affirmative on merits. Consequently, on merits, the case of the assessee deserves to be accepted. Hence, the penalty imposed under Section 271E by the competent authority (JCIT) is set-aside and quashed. 6. In the result, assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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