2008 (10) TMI 648 - AT - Income Tax

Summary

Issues involved: Appeals against cancellation of penalty u/s 271E of the IT Act, 1961.

ITA No. 359/Bang/2008:
- The assessee, a HUF, deposited funds in wife's name, later repaid by cash.
- Penalty under s. 271E initiated for contravention of s. 269T.
- Assessee argued the transaction was not a deposit or loan, but an adjustment entry.
- Jt. CIT considered HUF and individual as separate entities, imposed penalty.
- CIT(A) cancelled penalty citing technical breach not warranting penalty.
- Revenue appealed questioning imposition of penalty for cash transfer.

The Tribunal noted the assessee's compliance with tax filings over the years and lack of concealment. The source of funds was accounted for, not indicative of black money. Transaction between HUF and individual, being the same person, didn't attract s. 269T. Citing precedent, Tribunal upheld CIT(A)'s decision, dismissing Revenue's appeal.

ITA No. 360/Bang/2008:
- Assessee, a member of HUF, repaid cash to HUF for property purchase.
- Penalty u/s 271E initiated for contravention of s. 269T.
- CIT(A) cancelled penalty based on technical breach not warranting penalty.
- Revenue appealed challenging the penalty cancellation.

Tribunal, following the precedent set in a similar case, upheld the CIT(A)'s decision, stating the cash transfer did not constitute a loan repayment under s. 271E. The appeal by the Revenue was dismissed in this regard.