9911796707
|
Home
Issues:
Levy of penalty under section 271D for contravention of provisions of section 269SS. Analysis: The appeals by the Revenue pertain to the levy of penalty under section 271D for contravention of provisions of section 269SS for the assessment years 1995-96 and 1996-97. The assessee, an individual, obtained cash loans exceeding Rs. 20,000 on several occasions totaling to Rs. 4,96,000 from a partnership firm in which the assessee's HUF, father, and mother were partners. The Department imposed the penalty under section 271D. The assessee contended that the transactions were not loans or deposits but interest-free accommodation transactions between family members. The Commissioner (Appeals) deleted the penalty, emphasizing that there was no tax evasion or prejudice to the revenue's interest due to the transactions being among close relations. The Commissioner held that the provisions of section 269SS aimed to prevent tax evasion through fictitious entries, which was not the case here. The Revenue challenged this decision. Upon hearing both parties, the Judge concurred with the Commissioner's reasoning for canceling the penalty. The Judge noted that the cash withdrawals between family members, without charging interest, were akin to loans, with the monies originating from the firm where the father and mother were partners. The Judge emphasized the genuineness of the transactions, the absence of tax evasion, and the clear identification of the parties involved. Referring to Circular No. 387, the Judge upheld the Commissioner's decision, stating that there was no reason to interfere. The Judge dismissed the appeals, affirming the cancellation of the penalty under section 271D.
|
