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TMI Blog2012 (11) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... en any loan to Shri S.R. Shah. Similarly, if some amount was received from Shri S.R. Shah, the same did not mean that hostel had accepted any loan from Shri S.R. Shah in cash. It was the case of the assessee that if some expenditure was incurred by the hostel or the school students and the amount was reimbursed to the hostel by the Managing Trustee of the school, that is, Shri S.R. Shah the same did not become a deposit or loan given or taken by way of cash. Held that:- There was reasonable cause for the assessee to indulge into cash transactions in violation of Section 269SS of the Act. Shri S.R Shah acted as a custodian only, holding the money for a brief period, and that the same were deposited in the hostel's bank account at the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to indulge into cash transactions in violation of Section 269SS of the Act ?" Tax Appeal No.1466 of 2011 "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of CIT(A) who deleted the entire penalty of Rs.30,92,911/- levied under Section 271E of the Income Tax Act, 1961 without considering the fact that there was no reasonable cause for the assessee to indulge into cash transactions in violation of Section 269T of the Act?" 3. The assessment year is 2004-2005. In the year under consideration, the Additional Commissioner of Income-tax noticed that the assessee had accepted and repaid the following amounts of loans/deposits otherwise than by cross-cheques/drafts in contravent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostel for its safe custody, according to the assessee, the same did not imply that the hostel had given any loan to Shri S.R. Shah. Similarly, if some amount was received from Shri S.R. Shah, the same did not mean that hostel had accepted any loan from Shri S.R. Shah in cash. It was the case of the assessee that if some expenditure was incurred by the hostel or the school students and the amount was reimbursed to the hostel by the Managing Trustee of the school, that is, Shri S.R. Shah the same did not become a deposit or loan given or taken by way of cash. Placing reliance upon various decisions, the assessee pleaded that there was no contravention of the provisions of section 269SS and 269T of the Act and therefore, they were not liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, the Commissioner (Appeals) found that repayments in cash were only Rs.12,03,155 while Rs.2,10,000/- were repaid by cheque and Rs.10,36,756/- through journal entries besides Rs.6,43,000/- incorrectly considered as repayments of loan/deposit. 6. Revenue questioned the validity of the orders passed by the Commissioner (Appeals) before the Tribunal but did not succeed. 7. Mr. K.M. Parikh, learned Senior Standing Counsel for the appellant assailed the impugned order passed by the Tribunal by submitting that the findings of fact recorded by the Tribunal are contrary to the material on record inasmuch as the Tribunal has failed to appreciate that in the audit report furnished in Form No.3CD, it had been specifically mentioned in poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as nothing on record to show that the above transactions were attached with certain conditions or stipulation as to period of repayment, rate of interest, manner of payment, etc. so as to treat the transactions as loan or deposits. The Tribunal further noted that the revenue has not placed any material suggesting that the transactions were actually in the nature of loan or deposits. Having regard to the fact that there was nothing on record to suggest that the transactions were in the nature of loans or deposits, the Tribunal was of the opinion that the provisions of sections 269SS and 269T were not attracted. On behalf of the appellant, nothing has been pointed out to indicate that the findings of fact recorded by the Tribunal are contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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