TMI Blog2020 (10) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... had with Sri.Hiren Kumar Patel, the matter is restored to the A.O. The assessee shall cooperate with the A.O. and shall not seek unnecessary adjournment. The assessee shall prove his case that the transaction he had with Sri.Hiren Kumar Patel is a business transaction and not a loan / deposit. It is ordered accordingly. Cash paid by Sri.Hiren Kumar Patel to a builder for the purchase of a flat on behalf of the assessee - passing of journal entry without actual receipt of cash - HELD THAT:- Assessee had recorded in her books of account, by passing a journal entry by crediting Sri.Hiren Kumar Patel s accounts and debiting the flat purchase account. However, only the ledger account of Sri.Hiren Kumar Patel in the books of account of the assessee alone is placed on record. To understand whether it is a journal entry, the ledger account of the developer in the books of account of the assessee also needs to be perused. In absence of the same, in the interest of justice, we restore the issue to the files of the A.O. The A.O. shall examine whether the assessee in her books of account only passed a journal entry and was not in receipt of money from Sri.Hiren Kumar Patel. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) to consider the issue on merits afresh, in the event the CIT(A) holds that the orders imposing penalties u/s 271D and 271E of the I.T.Act are not time barred. 4.2 Pursuant to the ITAT s order, the CIT(A) passed orders on 05.03.2020, wherein he held that the orders imposing penalties u/s 271D and 271E of the I.T.Act are not time barred. On merits, the contention of the assessee that provisions of section 269SS and 269T of the I.T.Act does not have application and there was `reasonable cause as mandated u/s 273B of the I.T.Act when transactions are between relations (in these cases majority of the transactions are between wife, son and daughter), was rejected by the CIT(A). 4.3 Aggrieved by the orders of the CIT(A), the assessee has filed these appeals before the Tribunal. The assessee has filed paper books enclosing the copies of the judgment relied on, the ledger extracts of Sri.Hirenkumar Navinchandra Patel in the books of account of the assessee, etc. Though the assessee has raised several legal grounds, the primary argument by the learned AR was on merits. It was contended that the transactions of taking loan and for repayment of the loans are mainly with the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,60,000 i. Sushma G.Pandith ₹ 4,00,000 i. Daughter ii.Deepak ₹ 1,50,000 ii. Son iii.Sabita ₹ 1,00,000 iii.Daughter iv. Rajeshwari G.Pandith ₹ 2,00,000 iv. Wife v. Savita ₹ 1,50,000 v.Daughter vi. Hiren Kumar Patel ₹ 3,60,000 vi. Others 2008-09 486/B/2020 15,50,000 15,50,000 i. Rajeshwari G.Pandith ₹ 12,00,000 i. Wife ii.Hiren Kumar Patel ₹ 3,50,000 ii.Others 2009-10 488/B/2020 15,40,000 15 ,40,000 Rajeswari G.Pandith Wife Total 52,32,000 II. Penalty u/s 271E of the I.T.Act Asst.Year ITA No. Amount of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is usually at the instance of the giver and it is for the 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 applicable because there was no relationship of the depositor or a creditor as no interest was involved. This was neither a loan nor a deposit. At the same time. the words 'any other person' are obviously a reference to the depositor as per the intention of the Legislature. The communication/transaction between the husband and wife are protected from the legislation as long as they are not for commercial use. Otherwise, there would be a powerful tendency to disturb the peace of families. to promote domestic broils, and to weaken or to destroy the feeling of mutual confidence which is the most enduring solace of married life. In the instant case, the wife gave mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985] 152 ITR (St.) 1), it was never the intention of the Legislature to punish a party involved in a genuine transaction. Therefore, by taking a liberal view in the instant case, the assessee had a reasonable cause within the meaning of section 273D. Thus, keeping in view the entire facts of the instant case, and also keeping in view the intention of the Legislature in enacting the provisions of section 269SS, it was to be held that the assessee was prevented by sufficient cause from receiving the money by an account payee cheque or account payee bank draft. In the instant case, the assessee was of the opinion that the amount in question did not require to be 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 conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween father in law and daughter in law in cash cannot be subject matter of levy of penalty u/s.271D of the Act. 14. In the light of the aforesaid judicial pronouncements, we are of the view that imposition of penalty u/s.271D of the Act cannot be sustained. The same is directed to be deleted. The appeal of the Assessee is allowed. 5.3 In the instant case also, we have noticed that the assessee has made transactions of taking loan from his wife, son and daughters, who are family members. We notice that the co-ordinate Bench has followed the judgment rendered by the Hon ble Punjab Haryana High Court in the case of Sunil Kumar Goel (supra), wherein it has been held that the family transactions would fall within the meaning of reasonable cause u/s 273B of the Act. Further, the Hon ble Madras High Court has cancelled the penalty in respect of loan transactions between father-in-law and daughter-in-law in the decision of M.Yesodha (supra). The decision rendered in the case of Smt.Deepika was followed by another co-ordinate Bench in the case of Shri Sanmathi Ambanna (supra). Accordingly, consistent with the view taken by the co-ordinate Bench in the case of Smt.Deepika (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 271D of the I.T.Act amounting to ₹ 2,93,900. 6.1 Briefly stated the facts of the case are as follow: The JCIT had imposed penalty u/s 271D of the I.T.Act for a sum of ₹ 2,93,900. According to the JCIT, the assessee had accepted loan of ₹ 2,93,900 in cash from Sri.Hiren Kumar Patel, thereby violating the provisions of section 269SS of the I.T.Act. The penalty imposed by the JCIT was confirmed by the CIT(A). On further appeal, the ITAT restored the issue to the CIT(A) in ITA No.1060/Bang/2015 (order dated 21.11.2017). The ITAT held that the CIT(A) did not adjudicate the contentions of the assessee that the order imposing penalty u/s 271D of the I.T.Act, is time barred. The ITAT also directed the CIT(A) to consider the issue on merits afresh, in the event, the CIT(A) holds that the order of penalty u/s 271D of the I.T.Act is not time barred. Pursuant to the ITAT order, the CIT(A) passed order on 05.03.2020. The CIT(A) held that the order u/s 271D of the I.T.Act is not time barred. On merits, the penalty imposed u/s 271D of the I.T.Act amounting to ₹ 2,93,900 was confirmed. 6.2 Aggrieved by the order of the CIT(A), the assessee is in appeal before ..... 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