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TMI Blog2015 (8) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter, the Assessing Officer noticed that the assessee had acquired lease hold rights over a nazul land along with her husband vide assignment-cum-sale deed dated 31st January, 2005. The said nazul land was subsequently, converted into free hold in favour of the assessee and her husband vide deed executed on 24th June, 2005 on a total cost of Rs. 44,67,208/-. The Assessing Officer noticed that 50% of the amount i.e. Rs. 22,33,604/- was taken in cash as an unsecured loan from Samajwadi Party for the purpose of converting lease hold land into free hold land. The cash amount taken from Samajwadi Party was deposited in the joint account of the assessee along with her husband. The amount was subsequently, paid back to the Samajwadi Party on 24th August, 2005. Subsequent to the assessment order, the assessee received a notice under Section 274 of the Act to show cause as to why an order of penalty should not be passed under Section 271D of the Act for violating the provisions of Section 269SS of the Act. In response to the notice, the assessee filed her reply stating that since she did not had the requisite funds at that point of time and the funds were urgently required for conver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel has placed reliance upon a decision of the Punjab and Haryana High Court, Charan Dass Ashok Kumar Vs. Commissioner of Income Tax, 365 ITR 367 and Auto Piston MFG. Co. P. Ltd. Vs. Commissioner of Income Tax, 355 ITR 414 as well as the decision of the Madras High Court P. Baskar Vs. Commissioner of Income Tax, 340 ITR 560. On the other hand, Sri Vijay Bahadur Singh, the learned Senior Counsel contended that the transaction of loan found place in the books of accounts of the assessee as well as by the lender, namely, the Samajwadi Party and that the assessing authority while completing the assessment order had found that the transaction of loan was genuine. The learned counsel submitted that in the absence of any finding that the transaction of loan was not genuine or it was a sham transaction to cover unaccounted money, no penalty could be imposed. In support of his submission, the learned Senior Counsel relied upon a decision of Gauhati High Court in Commissioner of Income Tax Vs. Bhagwati Prasad Bajoria (HUF), 263 ITR 487, Chamundi Granites Pvt. Ltd. Vs. Deputy Commissioner of Income Tax, 255 ITR 258 and M. Janardhana Rao Vs. Joint Commissioner of Income Tax, 2005 (2) SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act; (ii) "co-operative bank" shall have the same meaning as assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949); (iii) "loan or deposit" means loan or deposit of money; (iv) "specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property whether or not the transfer takes place. 271D.(1) If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. 273B. Notwithstanding anything contained in the provisions of clause (b) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, section 271FAB, section 271FB, section 271G, section 271GA, section 271H, section 271-I, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also incorporated which provides that notwithstanding anything contained in the provisions of section 271D, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision is he proves that there was reasonable cause for such failure and if the assessee proves that there was reasonable cause for failure to take a loan otherwise than by account-payee cheque or account-payee demand draft, then the penalty may not be levied. Therefore, undue hardship is very much mitigated by the inclusion of section 273B in the Act. If there was a genuine and bona fide transaction and if for any reason the taxpayer could not get a loan or deposit by account-payee cheque or demand draft for some bona fide reasons, the authority vested with the power to impose penalty has got discretionary power." In Bhagwati Prasad Bajoria's (supra) the Gauhati High Court held: "....... The transaction of loan has found place in the books of account of the assessee as well as the lender of the loan. None of the authorities have reached the conclusion that the transaction of the loan was not genuine and it was a sham transaction to cover up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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