2002 (3) TMI 8 - HC - Income Tax

Penalty -- Tribunal has rejected the appeal of the Revenue mainly on the ground that cheques were crossed and were deposited in the account of the assessee-firm through banking channel. Consequently and in the result, the provisions of section 269SS of the Act could not be attracted. A further finding has been recorded that the bank has also issued a certificate in this regard that all the amounts of six creditors have been shown in the account of Makhija Construction Company, i.e., the assessee. The bank has further mentioned that all the six transactions in question were as per the banking norms and there was no flaw in the transactions, whereby the afore said amount of Rs.2,15,000 was transferred in the account of the assessee. The Tribunal has come to the conclusion that for such minor deviation, no penalty could have been imposed on the assessee as otherwise the transaction appears to be genuine, proper and bona fide. - we find that there is no merit and substance in this appeal. - It does not involve any substantial question of law and the appeal hereby fails and is dismissed.

Summary

The High Court of Madhya Pradesh dismissed the appeal filed by the Revenue under section 260A of the Income-tax Act, 1961. The appeal was against the penalty imposed on the assessee for raising loans through crossed cheques instead of account-payee cheques. The Tribunal rejected the appeal of the Revenue, stating that the transactions were genuine and proper, and no penalty should have been imposed. The Court found no merit in the appeal, as it did not involve any substantial question of law.