TMI Blog2017 (8) TMI 1697X X X X Extracts X X X X X X X X Extracts X X X X ..... d wife, father son etc. They would fall outside the scope of section 269T of the Act. Therefore, in our opinion, a transaction of loan which has a commercial identity cannot be transposed between a relation of husband and wife. Therefore, considering the factual position, we are of the view that the penalty imposed by the Assessing Officer u/s. 271E and confirmed by the Ld. CIT(A) needs to be deleted. Accordingly, we delete the penalty. - Decided in favour of assessee. - ITA No. 210/Kol/2015 - - - Dated:- 30-8-2017 - SHRI N.V. VASUDEVAN, JM DR. A.L.SAINI, AM For the Appellant : Shri Somnath Ghosh, Advocate For the Respondent : Shri Kalyannath, Addl. CIT, Sr. DR ORDER Per Dr. Arjun Lal Saini, AM: The capt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT (A) that transactions between husband and wife, and between father and son are not considered for the purpose of section 269SS and section 269T of the Act, because they are not other Person as mentioned in section 269T of the Act. That is, the provisions of section 269T do not applicable to relatives. The assessee explained to the ldCIT(A), about the provisions of section 269T of the Act, which reads as under: 269T: Mode of repayment of certain loans or deposits No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it [ or any specified advance received by it] otherwise than by an account payee cheque or ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of any kind of family relationship between borrower and lender in this behalf. This way, ld. CIT(A) confirmed the penalty under section 269T of the Act. 4. Not being satisfied with the order of the Ld. CIT(A), the assessee is in appeal before us and has taken the following grounds of appeal: 1. FOR THAT the Ld. Commissioner of lncome Tax (Appeals) Durgapur failed to appreciate that none of the conditions precedent required to be satisfied for the assumption of jurisdiction u/s. 271E read with s. 269T of the lncome Tax Act, 1961 existed and/or have been complied with and/or fulfilled in the instant case by the Ld. Joint Commissioner of lncome Tax, Range 2, Durgapur and his specious action in upholding the impugned order imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Ld. Commissioner of lncome Tax (Appeals) acted unlawfully in upholding the order imposing penalty u/s.271E of the lncome Tax Act, 1961 amounting to Rs. 5,00,000/- 6. The ld. Counsel for the assessee has submitted before us that assessee is a contractor. On scrutiny of the cash book and ledger in course of assessment proceedings, the AO found that the assessee had repaid a sum of Rs.5,00,000/- , out of the unsecured loan of Rs.8,54,000/- in cash to Smt. Ushasingh, the details of which are depicted in the assessment order itself. As a consequence, the AO initiated proceedings u/s.271E of the Act and levied penalty of Rs.5,00,000/- on account of repayment of loan to his wife. The Ld. AR submitted that assessee is a contractor. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the introduction of Section 269SS means persons who are not intimately or not very closely connected to the assessee. Here in this case, the husband and wife are closed connected and the wife cannot be termed in the definition of any other person . In addition to this, the Ld. Counsel for the assessee has relied on the following judgments: i) ITA No.172(Gau) of 2010 A.Y 2001-02 in the case of Kuldip Singh vs. Income-Tax Officer, Ward-3(2) ii) ITA no.833/Hyd/2008 in the case of Shri Mohammed Saleem vs. ACIT, Range 5, Hyderabad, A.Y 2003-04. In the above cited judgments, in sum and substance, it was held that a transaction of loan which has a commercial identity cannot be transposed between a relation of husband and wife. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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