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TMI Blog2012 (11) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... are rectification journal entries in respect of wrong payments received from customers which pertained to the sister concern - assessee also filed complete entries of the accounts of both the concerns in support of the contentions on which remand report was called for and virtually the AO accepted the claim of the assessee in the remand report regarding journal entries between sister concern and entries of purchases and sales through account payee transactions - penalty is not leviable in the matter – in favor of assessee - ITA No. 249 and 298/Ahd/2010 - - - Dated:- 20-1-2012 - SHRI BHAVNESH SAINI AND SHRI A. K. GARODIA, JJ. Appellant by Shri B. L. Yadav, DR Respondent by Shri R. K. Malpani, AR ORDER PER BHAV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on entries of wrong payments from customers of reach other are entered into. The journal entries are rectification entries in respect of wrong payment received from customers of each other. They are not transaction in the nature of receipt/repayment of loans. These transactions are in the nature of rectification entries. It was further stated by the assessee that the amounts mentioned by the A. O. are total of all credits and debits including the payment of receipts by way of account payee cheques, transactions of purchases and sales of goods, services and fixed assets (plant machinery), TDS and rectification entries as mentioned above in respect of wrong payments from customers of each other. Since the rectification entries by way of jou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied the penalty u/s 271 D of the IT Act. Similarly, the AO levied the penalty u/s 271E of the IT Act of Rs.97,65,985/- (Rs.34,04,950/- + Rs.62,61,035/-) for violating the provisions of section 269T of the IT Act. 3. It was submitted before the learned CIT(A) that the entries contained therein prove that these were adjustment entries, therefore, there is no violation of the above provisions. It was submitted that all the receipts are through account payee cheques and adjustment rectification entries and later on journal entries have been passed. It was, therefore, submitted that there is no violation of the provisions of section 269 SS and 269T of the IT Act. The learned CIT(A) in view of the explanation of the assessee called for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. has stated that on perusal of the said account it is seen that this includes entries of loans, purchases, rectification entries etc. On verification of the purchase register, it is noticed that the entries of purchases appearing in the copy of the account furnished by the assessee are found reflected in the purchase register. The entries of loans shown to have been taken through Cheque have been verified from the bank account statement and the same are found reflected in the bank statement. The entries of purchases shown in the copy of account have been verified with the purchase register and the same are found reflected in the purchase register. In view of this reason, penalty levied by the A.O. in respect of amounts mentioned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 -do- 31.12.03 Gopal Udhyog 22330.00 Rectification entry 21 of credit side of Eagle Synthetics Pvt. Ltd. Unit-II 21.10.03 Alok Industries Ltd. 171999.00 Rectification entry 2 of debit side of Eagle Synthetics Pvt. Ltd. Unit-II 16.04.03 Kantibhai 18488.00 Rectification entry The appellant has argued that there is no dispute that these entries are rectification entries in respect of wrong payments received by the appellant which were in fact receivable by the appellant's sister concern. With respect to the statement of the A.O. that the dates and amounts in the bills. do not tally with the dates and amounts of payments received on behalf of the sister concern in respect of which journal entries ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties below and explained that either the payments are made through account payee cheques or these are rectification journal entries in respect of wrong payments received from customers which pertained to the sister concern. It was, therefore, claimed that these were not receipts/payments of loan in violation of the provisions of law. The assessee also filed complete entries of the accounts of both the concerns in support of the contentions on which remand report was called for and virtually the AO accepted the claim of the assessee in the remand report regarding journal entries between sister concern and entries of purchases and sales through account payee transactions. The learned CIT(A) on proper appreciation of the facts and material on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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