9911796707
TMI Blog2002 (4) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... essee before the DCIT that at no stage of time the payment of deposits were made in excess of Rs. 20,000 as detailed below: "Sarita Rathi 30-3-1992 Repayment of Interest (By Cash) Rs. 3,450 31-3-1992 Repayment of Principal (By Cash) Rs. 19,182 ---------- Total &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arita Rathi & Shri Pradip Kr. Rathi, father of Master Dushyant Rathi, their Income & Expenditure Account, confirmation of accounts and I have also perused the judicial pronouncement in the case of Kumari A.B. Shanthi (Alias) Vennira Adai Nirmala v. A.D.I, cited in 197 ITR/page 330 & considering the ratio of this decision I hold that the penalty imposed has no legs to stand on and as such, it is deleted in full." 4. Being aggrieved, the Department is in appeal before us. The learned Departmental Representative, Shri B.B. Deb, has strongly argued that the CIT(A) was unjustified and wrong in relying upon a decision of Madras High Court in the case of Kumari A.B. Shanthi alias Vennira Adai Nirmala V. A.D.I.[l992] 197 ITR 330 as the operation of this judgment was stayed by the Hon'ble Supreme Court as reported in [1993] 204 ITR 1 (Statute). He, therefore, contended that the cancellation of penalty by the CIT(A) by relying on the aforesaid decision in the case of Kumari A.B. Shanthi is totally wrong and unjustified. 5. On the other hand, the learned counsel for the assessee contended mainly that the payment of money to Sarita Rathi and Dushyant Rathi was not on account of any repaymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 ITR 157 at pages 162-163 (Guj.) held that section 269SS cannot be said to be discriminatory or in any manner violative of Article 14 of the Constitution of India. The Hon'ble Gujarat High Court dissented from the decision of the Madras High Court in the case of Kumari A.B. Santhi. Furthermore, following the Madras High Court decision in the case of K.R.M. V. Ponnuswamy Nadar Sons (Firm) and the Hon'ble Gujarat High Court decision in the case of Sukhdev Rathi and dissenting from the Madras decision in the case of Kumari A.B. Shanthi, the Hon'ble Patna High Court has, in the case of Narsingh Ram Ashok Kumar v. Union of India [1998] 234 ITR 414, 420, 421 (Pat.) held that the provisions of section 269SS are not unconstitutional. It is, therefore, clear that on the date of hearing of appeal before the CIT(A) the Hon'ble Madras High Court's decision in the case of Kumari A.B. Shanthi was not operative and was not binding on the CIT(A) inasmuch as its operation was stayed by the Hon'ble Supreme Court as aforesaid and there were contrary decision of same High Courts Division Bench in the case of K.R.M. V. Ponnuswamy Nadar Sons (Firm) upholding the validity of section 269SS of the Act. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the legislature has itself made a distinction between the loan and the deposit and knowing very well such distinction the legislature has introduced section 269T to cover one of the transaction, namely, the deposit. Therefore, it is not permissible for the taxing authorities to enlarge the scope of term deposit in section 269T to include transaction of the loan. It may be true that the loan transaction may have some of the attributes, qualities and characteristics of the deposit. The loan may be repayable on notice or may be repayable after a fixed period. All deposits may take form of loan and it is not necessary that all loans should take form of deposit. This view is further fortified by a recent proposed amendment made in section 269T by the Finance Bill, 2002, which proposed to substitute the existing section 269T by a new section so as to extend the scope of the aforesaid section 269T to loans also, with effect from 1st June, 2002. It is, therefore, clear that section 269T is not applicable to repayment of loan transaction during the year under consideration. In this connection, reliance may be placed on the decision of the Hon'ble Madras High Court in the case of A.M. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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