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TMI Blog2015 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... nd confirmed by CIT(A) needs to be quashed. No contrary decision was pointed out by Ld. Sr. DR despite we specifically asked him whether any High Court decision is available against the assessee or not. In term of the above, we delete the penalty levied by JCIT and confirmed by CIT(A). - Decided in favour of assessee - I.T.A No.1112/Kol/2012 - - - Dated:- 29-4-2015 - Shri Mahavir Singh, JM Shri B. P. Jain, AM] For the Appellant: Shri Subhas Agarwal, Advocate For the Respondent: Shri Kanhiya Lal Kanak, JCIT, Sr. DR, ORDER Per Shri Mahavir Singh, JM: This appeal by assessee is arising out of order of CIT(A)-XXIV, Kolkata in Appeal No. 396/CIT(A)-XXIV/12(4)/08-09 dated 30.04.2012. Assessment was framed by ITO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT, Range-12, Kolkata, received information from AO and noted the fact in penalty order u/s. 271D of the Act in very first para as under: An information was received from ITO, Ward-12(4) vide his letter No. ITOWd. 12(4)/AADCM2533L/06-07/589 dated 27.12.2006 in which it was intimated that during the course of scrutiny proceedings of the aforesaid assessee and assessment year, it was observed that the assessee company received cash loan of ₹ 6,00,000/- on different dates from his Directors and others as mentioned in the tax audit report filed along with the return of income, thereby violating the provision u/s. 269SS of the I. T. Act, 1961. Accordingly it was requested by the ITO to issue the penalty show cause notice u/s. 271D of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken from the director by the assessee company. He stated that the assessee company M/s. Mahmood Associates Pvt. Ltd. received a sum of ₹ 3,98,719/- in cash from Shri Md. Mahmood, who is director of the assessee company. He stated that the issue of receipt of cash loan by assessee company from its director is now settled issue by various High courts. First, he relied on the decision of Hon ble Madhya Pradesh High Court in the case of CIT Vs. Indore Plastics P. Ltd. (2003) 262 ITR 163 (MP), where Hon ble High Court has observed that (from head notes) the assessee was a private limited company. One RCK was its promoter and director during the period relevant to assessment year 1990-91. During that year, the assessee-company accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee is a loan or deposit within the meaning of section 269SS. The deposit and the withdrawal of the money from the current account could not be considered as a loan or advance. Further it was also found that the assessee filed a letter dated September 29, 1997, and in that letter he explained that the amount received from Mr. S. V. S. Manian had been shown as secured loan from directors in the balance-sheet. As per the Companies Act, under the Companies (Acceptance of Deposits) Rules, 1975, under rule 2 (b) (ix), deposit does not include any amount received from a director or a shareholder of a private limited company. Therefore, the transaction between the appellant and the director cum shareholder is not a loan or deposit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries. These amounts cannot be equated with any of the amounts involved in the cases relied on by both the parties as in those cases, the amounts were received by the assessee as deposits in cash and that is not the position here because these were book entries except the amounts of NSCs and other cash loan of ₹ 11,910. In the same breath, the amount of ₹ 1,920 credited on account of rent and ₹ 24,360 credit in the account of Harendrakumar and Hiteshkumar cannot be treated as deposits or loan because these were credit entries on account of salary and bonus. Accordingly, the crux of the matter is that most of the amounts as referred to above was based on mere book entries and not received in cash by the assessee from fami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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