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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 ..... nking channels is immaterial, inasmuch as the genuineness of the transaction has not been disputed by the Assessing Officer. Further, we find that the cash was deposited in the bank account of the assessee and the money was thereafter, routed through the banking channel for payment to the government for converting the land into free hold property. Thus as reasonable cause had been shown by the assessee and the provisions of Section 273B of the Act was applicable. The appellate authorities were justified in holding that no penalty could be imposed since a reasonable cause was shown by the assessee - Decided in favour of assessee. - Income Tax Appeal No.174 of 2015, Income Tax Appeal No.71 of 2013 - - - Dated:- 21-8-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani,JJ. ORDER (Per: Tarun Agarwala, J.) The dispute in the two appeals is the same and are being decided together. For facility, the facts of Income Tax Appeal No.174 of 2015 is being taken into consideration. The present dispute relates to the assessment year 2006-07. The assessee claims to be deriving income from companies for her services as a Director, income from house propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as any condition of limitation, which compelled the assessee to accept the amount in cash. The authority held that the assessee had violated the provisions of Section 269SS of the Act and, therefore, imposed a penalty amounting to ₹ 22,33,604/-. The assessee, being aggrieved, filed an appeal, which was allowed and the order of penalty was set aside. The department, being aggrieved by the appellate order, filed an appeal before the Tribunal, which was dismissed. Consequently, the present appeal has been filed by the department under Section 260A of the Act. In this background, we have heard Sri Ashok Kumar, the learned counsel for the appellant and Sri Vijay Bahadur Singh, the learned Senior Counsel assisted by Sri Udai Pratap Singh and Sri Shivam Yadav, the learned counsel for the assessee. The short question that arises for consideration is, whether any penalty could be imposed under Section 271D of the Act? The learned counsel for the department contended that the unsecured loan, which was more than ₹ 20,000/- taken by the assessee from a political party should have been taken by a cheque or a demand draft through banking channels, which had not been done. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by, - (a) the Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); (e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette: Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some false entries, he would not escape by giving false explanation for the same. It was found that during the search and seizure, unaccounted money was found and the tax payer usually gave an explanation that he had borrowed or received deposits from his relatives or friends and, consequently, it became easy for the so called lender to manipulate his record to suit the plea of the tax payer. In order to curb this menace, Section 269SS of the Act was introduced to do away with the menace of making false entries in the account books and later give an explanation for the same. Section 269SS of the Act consequently, required that no person shall take or accept any loan or deposit, if it exceeds more than ₹ 20,000/- in cash. Section 271D of the Act provided that a person who takes or accepts any loan or deposit in contravention of the provision of Section 269SS of the Act, he would be liable to pay by way of penalty a sum equal to the amount of the loan or deposit so taken or accepted. Section 271D of the Act caused undue hardship to the tax payers where they took a loan or deposit in cash exceeding ₹ 20,000/- even where there was a genuine or bonafide transaction. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Samajwadi Party was a genuine loan, which was reflected in the books of accounts on account of the Samajwadi Party as well as in the books of account of the assessee and that the cash given by the party was deposited in the bank of the assessee and, thereafter, used for the purpose of converting the nazul land into free hold. The Tribunal found that the genuineness of the transaction was also not disputed by the Assessing Officer. In the light of the aforesaid, we find that even though the assessee had taken a loan in cash, nonetheless, the loan transaction was a genuine transaction and was routed through the bank account of the assessee which clearly shows the bonafides of the assessee. The cash given by the lender was not unaccounted money but was duly reflected in their books of account. The Assessing Officer also accepted the explanation and found the transaction to be genuine. The contention of the learned counsel for the appellant that since there was no urgency, the assessee could have taken the loan through cheque and should have processed the matter through regular banking channels is immaterial, inasmuch as the genuineness of the transaction has not been disputed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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