9911796707
TMI Blog2024 (11) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income filed, the assessee has shown revenue at nil as no operational activities were carried out during the year. However, the company had sold land to 32 different persons and had declared long-term capital gain of Rs. 1,84,69,469/- and had shown cash in hand of Rs. 1,22,96,274/-. The case of the assessee was selected for scrutiny for the reason of verification of cash in hand and as the assessee had claimed the cash was received against sale of 32 sale deeds, there was high cash in hand. The AO had accepted the return of income of the capital gains of Rs. 1,84,69,469/-. Subsequently, the Ld. JCIT, vide order dated 24.05.2019, issued a notice on 06.12.2018 observing that all the sale deeds have been executed after 01.06.2015 and lands have been sold to 32 different buyers receiving a cash amount of Rs. 1,28,47,000/- which is in violation of section 269SS of the Act and for which penalty u/s 271B should be levied. The assessee had given a reply that the provisions of section 269SS of the Act are not applicable as the money received was not by way of advance, but, at the time of execution of sale deeds. However, the ld. JCIT was not satisfied and considered the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pees or more. However, it is seen that other than advancing and accepting of loans there is a residuary term used in this section which encompasses all other transactions done in cash beyond the specified sums. This term is indicated as "Specified Sum". Hence, any other cash transactions other than those pertaining to loans or advances shall fall within this category which shall include the cash receipts of the appellant from its buyers. Hence, the contention that the appellant did not receive any loan or deposit from the buyer of the land is not correct and is liable to be rejected. The appellant has produced the wrong interpretation of the section including the interpretation of the definition of "Specified Sum". The application of section 269SS of the Act to the facts of the case of the appellant by the AO and imposition of consequent penalty u/s 271D of the Act is within the precincts of the then relevant provisions of Income Tax Act. In view of above, the ground No. 1 of appeal is hereby dismissed. Ground No.2: the appellant is taken the ground that the cash transactions of the sale of more than Rs. 2,00,000/- are to be brought to tax as per new section 269ST intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for this reliance has been placed on the decision of Chennai Bench of the ITAT in the case ITO, Kanchipuram vs. Shri R. Dhinagharan (HUF), ITA No.3329/Chny/2019, order dated 29.12.2023. 3.3 The ld. DR, however, relied the orders of the ld. tax authorities below. 4. We have given thoughtful consideration to the matter on record and the submissions. It is undisputed that when the assessment order was passed, not a word was mentioned by the AO that any query was raised or the issue of application of section 269SS of the Act was examined during the assessment proceedings. 4.1 As we go through the order of Ld. JCIT dated 24.05.2019, we find that it is mentioned that AO had submitted a proposal for initiation of penalty u/s 271D for contravention of section 269SS of the Act. We fail to reconcile between the assessment order and the penalty order as to if the AO had in any way shown any indulgence during the assessment proceedings about the contravention of section 269SS of the Act. We are of the considered view that even if it is assumed that subsequent to the assessment order dated 26.11.2018 the AO had submitted a proposal for initiation of penalty u/s 271D, then, the particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to prohibit acceptance or repayment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions. The Memorandum forming part of Finance Bill, 201.5 highlighting the intention of the amendment is captured below: B. MEASURES TO CURB BLACK MONEY Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances The existing provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions have been provided in the section. Similarly, the existing provisions contained in section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified sum is twenty thousand rupees or more. It is also proposed to define "specified sum" as any sum of money receivable, whether as advance or otherwise in relation to transfer of an immovable property whether or not the transfer materialises. These amendments will take effect from 1st June, 2015. 12.1 In the present case, the sale consideration was received in cash at the time of execution of multiple sale deeds from different persons for the sale of plots and accepted as genuine in the assessment order completed on 23.05.2018 and admittedly there was no advance received by the seller. The amended provisions of Section 269SS of the Act was applied by the A.O to the facts of the present case only to the sale consideration received as 'specified sum' and on such presumption the JCIT levied penalty u/s 271D of the Act. The intention of the amendment is very clear right from the Budget speech of the Finance Minister that the said amendment is brought into the statute in Section 269SS of the Act would get attracted to sum received in cash as an advance in an immovable property transaction and not to the completed transaction namely cash received as a sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of an advance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place. 54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made. 54.6 Applicability: These amendments have taken effect from 1st day of June, 2015. From the above provisions, Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of 'sum specified' brought in the Explanation to Section 269SS of the Act, it is clear that the intention for brining this provision was to curb the generation of black money in real estate prohibiting acceptance or repayment of advance in cash of Rs. 20,000/- or more for any transaction in immovable property. This was explained by Hon'ble Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighting the intention of the amendment that the amendment in Explanation to Section 269SS i.e., 'sum specified ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
