TMI Blog2023 (11) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITAT VISAKHAPATNAM] the Hon ble Tribunal has held in favour of the assessee. Further, the reliance placed by the Ld. AR on the judgment of the Hon ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills Ambala City [ 2015 (11) TMI 1453 - SUPREME COURT] wherein the Hon ble Supreme Court has held that the Ld. AO has to record his satisfaction for the purpose of initiating penalty proceedings under the Act. Also decided in Kanchumarthi Venkata Sita Ramachandra Rao [ 2022 (9) TMI 53 - ITAT VISAKHAPATNAM] when there is no satisfaction report recorded by the Ld. AO in the assessment record, no penalty could be levied. As, in the instant case, the Hon ble jurisdictional Bench of the Tribunal has deleted the additions both under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was out of money received from M/s. Gowtham Buddha Textile Park P. Ltd. The Ld. AO rejected the contention of the assessee as well as the confirmation of Mr. Arunachalam Manickavel and considered the cash deposits of Rs. 1.74 Crs as unexplained cash credit u/s. 68 of the Act and brought to tax as per section 115BBE of the Act. Further, the same amount was brought to tax in the hands of Sri Arunachalam Manickavel (individual) on the same ground but on protective basis. Aggrieved by the additions made by the Ld. AO, the assessee filed an appeal before the Ld. CIT(A) who has deleted the addition as the creditworthiness and genuineness of the transactions were proved by the assessee. Aggrieved by the order of the Ld. CIT(A), the Revenue filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and facts in deleting the penalty levied u/s. 271D of Rs. 1,74,00,000/-. 3. The Ld. CIT(A) has erred in ignoring the judicial pronouncement of Hon ble Supreme Court in the case of M/s. Vasan Healthcare Vs. Addl. CIT reported in [2011] 125 taxmann.com 266 (SC). 4. The Ld. CIT(A) has erred in law and facts in deleting the penalty even when the assessee company could not establish any bona fide reason as to why the assessee could not get a loan or deposit by A/c Payee Cheque or A/c Payee Demand Draft. 5. The Ld. CIT(A) has erred in not considering the contention of the AO that the assessee has not proved any exigency to forego the route of transacting through banking channel. 6. The Ld. CIT(A) has erred in relying on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence penalty levied u/s. 271D is unreasonable and therefore the establishment of any bonafide reason does not warrant. 3. The Ld. CIT(A) is justified in holding that as per the Companies (Acceptance and Deposits) Rules, 1975, under Rule 2(b)(ix), deposit does not include any amount received from a Director or Shareholder of a Private Limited Company and therefore, the transaction between the Director and the company is not in the nature of a loan or deposit. Hence violation of provisions of section 269SS does not attract. 4. The Ld. CIT(A) is justified in following the Hon ble Madras High Court in the case of CIT vs. Idayan Publications Limited since the facts and issue involved in the case of Delhi High Court in CIT vs. Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanchumarthi Venkata Sita Ramachandra Rao in ITA Nos. 245 246/Viz/2020 (AY 2016- 17), dated 30/08/2022. The Ld. AR also relied on the decision of the Hon ble High Court of Telangana in the case of Srinivasa Reddy Reddeppagari vs. JCIT, Central Circle, Range-2, Hyderabad in W.P No. 44285 of 2022. Further, the Ld. AR also placed reliance on the judgment of the Hon ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills Ambala City reported in [2015] 64 taxmann.com 75 (SC). Per contra, the Ld. DR submitted that the penalty proceedings u/s. 271D and the quantum proceedings are mutually exclusive and as per section 271D of the Act the Joint Commissioner of Income Tax cam impose penalty in the case if there is any contravention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no satisfaction report recorded by the Ld. AO in the assessment record, no penalty could be levied. The decision of the Hon ble Supreme Court in the case of M/s. Vasan Healthcare (P) Ltd vs. Addl. CIT (supra) relied on by the Ld. DR is distinguishable on the fact that in that case the creditworthiness and genuineness of the source of the funds could not be proved by the assessee. Further, in the instant case, the Hon ble jurisdictional Bench of the Tribunal has deleted the additions both under the protective basis and the substantive basis as the creditworthiness and genuineness of the source of the funds were proved beyond doubt. Considering these facts and circumstances of the case as stated above and following the principles of co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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