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TMI Blog2018 (6) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... itiation of penalty proceedings is barred by limitation Even otherwise also, the transaction is between husband and wife. Various benches of the Tribunal are holding that transaction of loan between husband and wife does not attract the provisions of section 269SS of the Act. Penalty levied u/s 271D of the Act in the instant case is not justified - Decided in favour of assessee. - ITA No. 1831/Del/2016 - - - Dated:- 20-6-2018 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MISS S. KAMBLE JUDICIAL MEMBER For The Assessee : Shri Rakesh Sharma, CA For The Revenue : Shri K. Tiwari, Sr- DR ORDER PER R.K. PANDA, ACCOUNTANT MEMBER:- This appeal filed by the assessee is directed against the order dated 27.01.2016 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was maintaining bank account with Indian Bank, Mehrauli Road, New Delhi, and therefore, there was no need to keep such huge cash at home. The JCIT further noted that Smt Meena Sood and Shri Sunil Kumar Sood were depositing cash in the bank below ₹ 50,000/- and the reason for the same was not explained. Rejecting the various explanations given by the assessee, the JCIT levied penalty of ₹ 4 lakhs u/s 271D of the Act. 4. Before the ld. CIT(A), it was argued that the penalty proceedings were initiated after a gap of four years and eight months and it was not initiated within reasonable time. Therefore, such penalty proceedings should be quashed. It was further submitted that money was taken for purchase of a house. The wife of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e family members were going to stay together. Moreover, the source of Smt. Meena Sood, wife of the appellant has not been explained properly by the appellant and the only explanation given is that the loan was advanced out of her past savings without any supporting evidence. Further, the appellant has also not explained the reasons for keeping the money by Smt.Meena Sood in cash for such a long period despite having a bank account and also depositing the same below ₹ 50.000/- in the bank account on 7 occasions as discussed by the AO in the penalty order. The explanation of the appellant that Smt. Meena Sood had a PAN and had no problem in depositing sum in excess of ₹ 50,000/- but the deposit of cash will depend on the availabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings u/s 271D of the Act, it is the settled law that if no time limit is statutorily provided, then the same has to be done within reasonable time. He submitted that the initiation of penalty proceedings after a gap of four years and eight months could not be said to be within reasonable time. 6.1 So far as merits of the case are concerned, he submitted that the assessee had taken cash loan from his wife for purchase of two properties during the F.Y. 2007-08. He submitted that the provisions of section 269SS do not bar genuine cash transactions of loan but bar only those transactions which are entered with the intention to evade taxes. These provisions are made to counteract evasion of tax but not to bar cash transactions between clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of penalty proceedings. Although there is no time limit prescribed for initiation of penalty proceedings under the said provisions, however the courts are invariably holding that such proceedings should be initiated within a reasonable time. Since in the instant case such penalty proceedings have been initiated after a gap of more than four and half years from the completion of assessment proceedings u/s 143(3) of the Act, therefore, initiation of penalty proceedings, in our opinion, is barred by limitation. 9.1 Even otherwise also, the transaction is between husband and wife. Various benches of the Tribunal are holding that transaction of loan between husband and wife does not attract the provisions of section 269SS of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame time. the words 'any other person' are obviously a reference to the depositor as per the intention of the Legislature. The communication/transaction between the husband and wife are protected from the legislation as long as they are not for commercial use. Otherwise, there would be a powerful tendency to disturb the peace of families. to promote domestic broils, and to weaken or to destroy the feeling of mutual confidence which is the most enduring solace of married life. In the instant case, the wife gave money to husband for construction of a house which was naturally a joint venture for the property of the family only. This transaction was not for commercial use. The amount directly received by the husband. i.e .. the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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