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TMI Blog2016 (5) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... TANT MEMBER For The Appellant by : Shri G.V.N. Hari, AR For The Respondent : Shri M.N. Murthy Naik, DR ORDER PER G. MANJUNATHA, Accountant Member: These cross appeals filed by the assessee, as well as revenue are directed against the order of CIT(A), Visakhapatnam dated 24.1.2013 and it pertains to the assessment year 2006-07. ITA.No. 191/V/2013 2. The brief facts of the case are that, from the assessment records, it was noticed that the assessee has accepted deposits in contravention of section 269SS of the Income Tax Act, 1961 (hereinafter called as the Act ) for which penalty proceedings u/s 271D of the Act was initiated by the Addl. CIT Kakinada. The additional CIT, after considering the submissions of assessee, levied penalty of ₹ 11,80,000/- u/s 271D of the Act, for contravention of the provisions of section 269SS of the Act. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee has reiterated the submissions made before the A.O.. The assessee further submitted that, A.O. was not correct in levying the penalty u/s 271D of the Act, as the deposits accepted by the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. As regards, the renewal of existing deposit, the CIT(A) held that the assessee has filed ledger extract of transactions, which clearly indicate that these were renewals and not cash deposits. Accordingly, the penalty levied to the tune of ₹ 4,20,000/-, in respect of renewals of existing deposits has been deleted. Aggrieved by the CIT(A) order, the revenue as well as assessee are in appeal before us. 5. The ld. A.R. of the assessee submitted that the CIT(A) was erred in confirming the penalty levied in respect of deposit accepted from the family members of Managing Director. The A.R. further submitted that the assessee has proved the genuineness of the transactions and furnished the identity of the depositors. The depositors have directly deposited the cash into the bank account of the assessee, therefore, it cannot be held that there was a violation of section 269SS of the Act. Though, assessee has received cash deposits of ₹ 20,000/- and more, the reasonableness of the explanations offered by the assessee to be considered. The assessee has explained that once, the genuineness of the transaction is not doubted, just because cash deposit has been accepted, penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as genuine. The A.O. cannot levy penalty, merely because it was accepted in cash, unless prove the transaction is not genuine. The assessee further submitted that penalty cannot be levied for technical mistakes. We do not find force in the arguments of the assessee, for the reason that the assessee should prove beyond doubt that there was no violation referred to section 269SS of the Act, so as to seek immunity from levy penalty u/s 271D of the Act. In the present case on hand, it was proved beyond doubt that the assessee has accepted cash deposits of ₹ 20,000/- and more, in contravention of section 269SS. The assessee has failed to furnish any explanation for the violations referred to in section 269SS of the Act. Therefore, we are of the opinion that the A.O. has rightly levied penalty u/s 271D of the Act, in respect of cash deposits from relatives and fresh deposits. 8. Coming to the alternative arguments of the assessee. The assessee submitted that penalty u/s 271D of the Act, can be levied on the amount which is in excess of ₹ 20,000/-. In other words, no penalty can be levied for the amount up to ₹ 20,000/-. In case, each loan amount exceeds ₹ 20,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the law for the benefit of the assessee by issuing circulars to ensure a proper administration of the fiscal statute. In CST vs. Indra Industries (2001) 168 CTR (SC) 50 : (2001) 248 ITR 338 (SC), the Court further observed that the taxing authority cannot be heard to advance an argument that it is contrary to that interpretation. 9. The ITAT Kolkata Bench, in the case of Shri Pintoo Karmakar Vs. JCIT (supra) has considered similar issue. The coordinate bench, by following the judgement of Bombay High Court, decided the issue in favour of the assessee as under: 4. We have heard rival submissions and gone through facts and circumstances of the case. Before us Ld. Counsel for the assessee admitted the fact that the assessee had received a sum of ₹ 20,000/- from each of eleven creditors totaling to ₹ 2,20,000/- in cash. The reasonable cause for receipt of this cash loan was that the assessee received cash loan from relatives, who are neither income tax assessee nor havmg any bank account. Hence, he has no other alternative except to receive loans in cash for an amount of ₹ 20,000/- from each of them. These facts are undisputed but before us Ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing circulars to ensure a proper administration of the fiscal statute. In CST Vs. Indra Industries (2001) 168 CT!? (SC) 50: (2001) 248 fiR 338 (SC), the Court further observed that the taxing authority cannot be heard to advance an argument that it is contrary to that interpretation. 5. Considering above, we find that the facts are exactly identical what was before the Hon'ble Bombay High Court (supra) and in each of case cash loan is not exceeding ₹ 20,000/- rather it is exactly ₹ 20,000/-. Since there is a circular and which is a beneficial circular under section 269S8 of the Act and Hon ble Bombay High Court has interpreted circular no. 572 dated 3 August 1990 (supra) wherein vide pars, 3 relevant portion of clause 43 is as under: 43. Secs. 271C, 271D and 271E, which were inserted in the IT Act w.e.f. 1st April, 1989, by the Direct Tax Laws (Amendment) Act, 1987, provided for the levy of penalties for certain defaults. Penalty under s. 271C was levied for failure to deduct tax at source. Penalty under s. 271D may be levied for failure to comply with the provisions of s. 269SS i.e. for taking or accepting any, loan or deposit in excess of ₹ 20,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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