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Issues involved: Appeal against Tribunal's order deleting penalty u/s 271E for violation of provisions u/s 269T of the Income Tax Act, 1961.
The judgment pertains to the levy of penalty u/s 271E of the Income Tax Act, 1961. The Assessing Officer imposed a penalty on the assessee for receiving certain amounts in cash, which was considered a breach of Section 269T of the Act. The CIT [A] deleted the penalty, and the Revenue appealed to the ITAT, which upheld the CIT [A]'s decision. The Counsel for the Revenue argued that the mode of accepting and returning cash for property transactions was not credible, as the properties were never sold and cancellations were made years after the initial cash acceptance. The Assessing Officer believed there was a breach of Section 269T of the Act. However, the CIT [A] noted that the transactions were genuine, with no dispute on the source of funds. The delay in cancellations due to an earthquake did not invalidate the earlier sale and purchase transactions. It was concluded that the cash receipts and payments were not considered loans or deposits, hence not violating Section 271T of the Act, and thus no penalty under Section 271E should have been imposed. The Tribunal agreed with the CIT [A]'s findings, stating that the Assessing Officer failed to provide evidence that the transactions were not genuine. The transactions for property purchase and sale were not deemed as loan transactions, further supporting the decision that no breach of Section 269T occurred. Both the CIT [A] and the Tribunal found that the cash receipts from property sales did not violate Section 269T of the Act as they were not considered loan transactions. Consequently, no substantial question of law arose, leading to the dismissal of the Tax Appeal.
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