TMI Blog2021 (7) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of relative as given in section 2(41). The second transaction of purchases is with Prabhavati Mahajan, proprietor Soni Adat Dukan, who is mother-in-law of the assessee. She is also not covered under section 2(41). The third transaction is payment of rent to Yogesh Pandurang Mahajan, who is assessee s husband s brother. He too does not fall within the definition of relative as given in section 2(41). The last transaction is payment of rent to Sunil Pandurang Mahajan, who is the assessee s husband. This transaction is covered within the meaning of term relative as given in section 2(41) and hence falls within the realm of section 40A(2)(b). As noticed above the definition of specified domestic transaction as given in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A(2)(b) of the Act as under: Mahajan Adat Dukan Prop Yogita Mahajan Purchases ₹ 16,34,02,140/- Soni Adat Dukan Prop Prabhavati Mahajan Purchases ₹ 3,28,31,774/- Sunil P Mahajan Rent ₹ 1,80,000/- Yogesh P Mahajan Rent ₹ 1,80,000/- 3. The AO observed that total of such transactions in the nature of Specified Domestic Transactions (SDTs) exceeded the qualifying limit of ₹ 5 crore, requiring the assessee to maintain documents and information in terms of sections 92D and furnish audit report as per section 92E of the Act. He called upon the assessee to furnish the same, in reply to which the assessee stated that the tax auditor inadvertently reported such payments as having been made to per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of each international transaction or specified domestic transaction entered into by such person. (2) ... 5. On circumspection of the above provision, it is clear that the penalty gets attracted where the assessee fails to keep records and documents etc., inter alia, in respect of a specified domestic transaction. The term `specified domestic transaction has been defined in section 92BA, which at the material time read as under:- For the purposes of this section and sections 92, 92C, 92D and 92E, specified domestic transaction in case of an assessee means any of the following transactions, not being an international transaction, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee u/s 40A(2)(b) were actually covered within its ken. To resolve the controversy, let us have a glance at the relevant portion of section 40A(2)(b), pertaining to an individual, as is the assessee, which runs as follows:- (b) The persons referred to in clause (a) are the following, namely:- (i) where the assessee is an individual any relative of the assessee 8. It talks of payments made by an individual to any of his or her relatives. The entire controversy rotates around the meaning of the term `relative as used in section 40A(2)(b), which has not been admittedly defined in section 40A of the Act. The term has been so defined in section 2(41): `in relation to an individual, means the husband, wife, brother or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have noted the language of section 56(2)(v), in which the context of the `relative requires otherwise and for that purpose, a separate definition has been given in the Explanation. Obviously, while interpreting section 56(2)(v), we cannot go with the meaning of the term `relative as given in section 2(41). It will have to be understood there as defined in the Explanation. Once we are out of section 56(2)(v), again the definition of the term `relative as given in section 2(41) comes to govern, which has to be followed, unless the context of a particular section otherwise requires. We have noted above that no definition of the term `relative has been given in section 40A(2)(b). Thus, it is the ambit of the term `relative as given in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(41) and hence falls within the realm of section 40A(2)(b). 11. We have noticed above the definition of specified domestic transaction as given in section 92BA as embracing, inter alia, the transactions referred to in section 40A(2)(b) of the Act provided the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of five crore rupees. As the assessee s transaction covered u/s 40A(2)(b) is restricted only to ₹ 1.80 lakh, the same would not qualify as SDT u/s 92BA. A fortiori, sections 92D/92E also do not get magnetized and consequently, there can be no question of any penalty u/s 271AA. We, therefore, order to delete the penalty. 12. In the result, the appeal is allowed. Order prono ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
