TMI Blog2022 (12) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions is aimed at non commercial reasons and outside the normal business operations? As such, the provisions of ss. 269SS and 269T of the Act shall not be attracted where there is no involvement of the money . Therefore, in the fact of the present case, in our opinion, though the assessee has violated the provisions of ss. 269SS/269T of the Act in respect of journal entries, the assessee has shown reasonable cause and, therefore, the penalty imposed u/s 271D/271E of the Act are not sustainable. Regarding an amount of 'money' said to have been paid in violation of the said provisions, the same needs to be deleted. Appeal filed by the Revenue is dismissed. - ITA NO. 1407/MUM/2022 - - - Dated:- 30-11-2022 - SHRI AMIT SHUKLA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an appeal before the Ld.CIT(A) and Ld.CIT(A) after considering the submissions of the assessee deleted the penalty levied by the Assessing Officer. Aggrieved revenue is in appeal before us rising following grounds in its appeal: - 1 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) is not justified in deleting the penalty levied u/s. 271E of the Act since the assessee has not shown the reasonable cause u/s. 273B of the Act for entering into such transactions through journal entries? 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) is erred in deleting the penalty without giving a finding on transaction to transaction basis in the given case for existence of reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. It is not a transaction of receiving/ paying loans. Further, Ld. AR submitted that, even if it is assumed that transactions are in the nature of loans or advances, no penalty u/s. 271D can be levied as the assessee had a reasonable cause within the meaning of section 273B of the Act. It is submitted that the ITAT has consistently held in cases of group concerns that passing of journal entries in the ordinary course of business constitutes a reasonable cause and, on that ground, Ld.CIT(A) deleted the penalties. In this regard, Ld.AR placed reliance on the following decisions: a) Macrotech Developers Limited (Successor to Macrotech Construction Pvt Ltd) (ITA No. 1415/Mum/2019 1416/ Mum/ 2018) dated 8th April 2021. b) Palava Dwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio of judgment, we analyse the facts of the present case hereasunder. 33. We find that there is no finding of AO in the order of the AO during the assessment proceedings that impugned transactions constitute unaccounted money and are not bona fide or not genuine. As such, there is no information or material before the AO to suggest or demonstrate the same. In the language of the -Hon'ble High Court, neither the genuineness of the receipt of loan/deposit nor the transaction of repayment of loan by way of adjustment through book entries carried out in the ordinary course of business has been doubted in the regular assessment . Admittedly, the transactions by way of journal entries are aimed at the extinguishment of the mutual l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volve unaccounted money and they are genuine. In fact, such journal entries shall save large number of cheque books for the banks. 35. Further, there is no dispute that the impugned journal entries in the respective books were done with the view to raise funds from the sister concerns, to assign the receivable among the sister concerns, to adjust or transfer the balances, of consolidate the debts, to correct the clerical errors etc. In the language of the -Hon'ble High Court, the said journal entries constitute one of the recognized modes of recording the loan/deposit. The commercial nature and occurrence of these transactions by way of journal entries is in the normal course of business operation of the group concerns. In this re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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