TMI Blog2020 (11) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... redemption of the jewellery as stated by the assesse. The bank transaction stated to have been examined by the Ld.CIT(A) and given a finding that the company has made payments on behalf of the HUF. The same was not controverted by the Ld.DR during the appeal hearing. All the deposits were settled with sale of jewellery or the account transfers and thus proved to be trade transactions. The department also did not bring any material to show that the cash received by the company was subsequent to the revival of the bank account in the case of HUF and the transactions were not the trade transactions - there cannot be any better reason for receipt of cash deposits than the death of Karta or Managing Director of the company. It is also not disputed that all the cash receipts were duly accounted in the books of the assesse as well as the HUF. There were no unaccounted transactions. Therefore, we are of the view that there was a sufficient and reasonable cause for accepting the cash deposits. - Decided against revenue. - I.T.A.No.275/Viz/2019, Cross Objection No.78/Viz/2019, I.T.A.No.275/Viz/2019 - - - Dated:- 23-11-2020 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations could not be stopped due to sad demise of Shri Manoj Kumar, the HUF collected the amounts in cash from scheme subscribers and deposited the cash in company s accounts till 11.06.2012. Subsequently, the bank operations were revived in HUF after the powers of bank operations were given to new Karta Mrs. GBM Ratna Kumari and from then onwards the payments were made through cheques. Since the cash deposits were trade transactions and accepted due to death of Managing Director during the interim period the assessee requested to drop the penalty proceedings. The Addl.CIT did not convince with the explanation of the assesse and verified the books of accounts and found that the assessee had operated the bank accounts and made some payments through RTGS on some occasions. Since some transactions were made through bank during the interim period, the Addl.CIT did not believe the contention of the assesse that the bank accounts could not be operated due to sad demise of Shri Manoj Kumar. Therefore, the Addl.CIT held that the assessee did not demonstrate that acceptance of cash falls under exceptions to section 269SS of the Act, hence, levied the penalty u/s 271D of the Act for viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso required obtaining new PAN etc. and the same was operated by new authorised person we.f. 15.05.2012 (561) and 10.07.2012 (Kotak Mahindra Bank). Till that time the cash which was being collected under various schemes and payable to the company was paid/deposited in cash by HUF This is a reasonable cause, which prevented the appellant from collecting/receiving the amounts in cheque as being done before the murder of Mr. Manoj Kumar and after the new person authorised sign is in place. The facts stated above are not in dispute. But the case of the Addl.CIT levying penalty is that certain transactions in cheque were made by the HUF during the above period and these transactions also could have been done by cheque. The appellant filed the ledger account copies and vouchers for the transactions mentioned by Addl. CIT in the order. It is seen that the payments were made by M/s.Vaibhav Empire Pvt. Ltd.(appellant company) on behalf of Manoj Kumar (HUF) and made journal entries to that effect as reflected in the ledger account of HUF in the appellant's books of account. In View of the above, it cannot be said that the HUF was making payments through cheques during the relevant period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings. Therefore, argued that the transactions in question were business transactions on which penalty is not leviable and the death of Managing Director is sufficient and reasonable cause for accepting the cash, hence requested to uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. 6. We have heard the rival contentions and gone through the orders of the authorities below. There is no doubt that the Managing Director of the company Shri G.Manoj Kumar who was also the Karta of HUF who was murdered in an incident on 07.02.2012. Death of Karta and the Managing Director of the company naturally suspends the bank transactions till such time, Karta is replaced and authorised signatories are approved by the Board of Directors for operating the bank accounts. In the case of Karta of HUF, lot of legal formalities are required to give power of attorney. In the instant case, Mrs GBM Ratna Kumari is replaced as Karta and explained that lot of time was taken for revival of the bank account of HUF. Cash deposits were made by HUF during the interim period of death of Karta till the revival of bank account of HUF. Though the Ld.Addl.CIT observed that certain bank tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
