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TMI Blog2016 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant : Mr. A.S.Sriraman, Advocate For The Respondent : Mr. A.V.Sreekanth, JCIT ORDER Per Challa Nagendra Prasad, JM: These appeals are filed by two assessees namely Smt. S.Vasundara Devi and Mr. M.Subramaniam against the orders passed by the Commissioner of Income Tax (Appeals) -2, Coimbatore dated 19.01.2015 for the assessment year 2009-10 arising out of penalty orders passed under section 271D and 271E of the Act. As the issues are common in all these appeals, they are heard together and disposed off by this common order for the sake of convenience. 2. Brief facts are that assessees are members of HUF of M.Subramaniam. The Assessing Officer noticed that during the assessment year 2009-10 both the assessees who are husband and wife have received and repaid cash loans exceeding ₹ 20,000/- from/to M.Subramaniam (HUF) thereby contravening the provisions of section 269SS and 269T of the Act. Thus, the Assessing Officer levied penalty under section 271D and 271E of the Act. The assessee contended before the Assessing Officer that he has not received any loan or deposit but it is only an accommodation transaction there is no revenue leakage or evasion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended that transaction between the status i.e. individual and HUF neither amounts to deposit nor loan and there is no evasion of tax by the assessee and the transaction is bonafide and genuine. It was further contended that object of section 269SS was to ensure that no unaccounted money is introduced in the books of account since in the case of assessees there is no tax evasion, no penalty is leviable. Before the Commissioner of Income Tax (Appeals), the assessee contended as under:- 1. The cash transaction entered into by the appellant is only between the family members i.e.. between members of family and HUF. The appellant is a member of M.Subrananiam (HUF). 2. The accommodation of cash transactions between. the family members did not result in any evasion of Tax 3. It is not the case of making any fictitious entries in the books of accounts without there being any actual transaction. 4. M.Subrarnaniam (HUF) is also assessed to income tax in PAN: AABHS5D66RJVVard-II(2)/CBE and it has filed his return of income for the Assessment year 2009 10 on 02-07-2009. 5. M.Subramaniarn (HUF) had sold property at D-2, 1st floor D Block, Door No,25-02, Bharathi p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dual names and have reasonable cause for accepting such loans. 7. The Hon ble Madras High Court in the case of CIT Vs.Lakshmi Trust Co. (303 ITR 99) upheld the orders of Commissioner of Income Tax (Appeals) and the Tribunal who found on facts that transactions were genuine and identity of the lender was established, there was no intention on the part of the assessee to evade tax, the cancellation of penalty was justified. While holding so, the High Court observed as under:- We have given our careful consideration to the submissions made on either side. This court in CIT v. Kundraihur Finance and Chit Co. [2006] 283 ITR 8 329 (Mad), following the decision of the apex court in Asst. Director of Inspection (Invst.) v. Kum. A. B. Shanthi [2002] 255 ITR 258, held that if there was genuine and bona fide transaction and the tax payer could not get a loan or deposit by account payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty. In the instant case, the Commissioner of Income-tax (Appeals) and the Appellate Tribunal found on the facts that the transactions were genuine and the id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal holding that the Assessing Officer has rightly levied penalty under section 271D of the Income-tax Act after giving opportunity to the assessee and on being fully satisfied that the amount in cash taken by the assessee from her father-in-law was not a gift but only a loan. 4. In the appeal preferred before the Tribunal by the assessee, the Tribunal referred to the decision of the Tribunal in the case of M. Raju v. Addl. CIT in I. T. A. No. 899/Mds/2006 and the decision of the Tribunal, Pune Bench in the case of ITO v. Sunil M. Kasliwal reported in [2005] 94 ITD 281 (Pune)(TM). The Tribunal also referred to the judgment of this court CIT v. Lakshmi Trust Co. [2008] 303 ITR 99 (Mad) and held that, in the facts and circumstances of the case, the levy of penalty is not warranted. The Tribunal further held that the transaction of receiving the amount of ₹ 20,99,393 is between the father-in-law and the daughter-in-law and the genuineness of the transaction is not disputed, in which, the amount has been paid by the father-in-law for the purchase of property. On those findings, the Tribunal allowed the appeal. 5. Mr. J. Narayanasamy, learned standing counsel appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the assessee and her father-in-law, the Tribunal has rightly held that the genuineness of the transaction is not disputed, in which, the amount has been paid by the father-in-law for purchase of property and the source had also been disclosed during the assessment proceedings. If there was a genuine and bona fide transaction and the taxpayer could not get a loan or deposit by account payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty. 10. The contention of the Revenue is that the amount received by the assessee from her father-in-law has to be treated only as a loan and it is a loan, then the assessee is liable to pay penalty under section 271D of the Incometax Act. Whether it is a loan or other transaction, still the other provision, namely, section 273B of the Income-tax Act, comes to the rescueof the assessee, if she able to show reasonable cause for avoiding penalty under section 271D of the Income-tax Act. The Tribunal has rightly found that the transaction between the daughter-in-law and the father-in-law is a reasonable transaction and a genuine one owing to the urgent ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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