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TMI Blog2016 (9) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... onafide and it was not to evade taxes. In this view of the matter and further perusing the citations of the case laws we find no infirmity in the order of the ld. CIT(A) which is sustained on this issue. Thus the solitary ground of the Revenue is dismissed. - ITA No. 663/JP/2015, C.O. No. 45/JP/2015 Assessment Year : 2011-12 - - - Dated:- 1-9-2016 - Shri Bhagchand,AM And Shri Kul Bharat, JM Revenue by : Shri R.A. Verma, Addl. CIT Assessee by :Shri Vijay Goyal, CA ORDER Bhaghchand, AM The Revenue has filed an appeal against the order of the ld. CIT(A), Kota dated 26-05-2015 for the assessment year 2011-12. The assessee has filed a cross objection. 2. The solitary ground raised by the Revenue is as under:- On the facts and in the circumstances of the case, the ld. CIT(A) has erred in:- (i) deleting the penalty of ₹ 82,56,589/- u/s 271D of the I.T. Act. The ld. CIT(A) has failed to appreciate that taking or accepting of loan/ deposits of ₹ 20,000/- or more by way of mode of payment other than account payee cheque / draft is hit by the provisions of Section 269SS of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) CIT vs. Noida Toll Bridge Company Ltd. ,262 ITR 260 (Del). (b) CIT vs. Saurabh Enterprises (Allahabad High Court) (c) Lodha Builders (P) Ltd. vs. ACIT (ITAT Mumbai) (d) CIT vs. Maheshwri Nirman Udyog (2011) 2011 CTR 579 (Raj.) and CIT vs. Raj Kumar Sharma (2007) 294 ITR 131 (Raj,) (e) CIT vs. Seni Medical Store (2005) 27 7 ITR 430 (P H) (f) ITO vs. Smt. Bhan Ban R Shah (ITA No. 1801/AHD/2009) if transaction between sister concern are made with a view to meet the business need under the bona fide believe and with a reasonable cause, no penalty u/s 271D is imposable under such circumstances. In our case both companies are holding and subsidiaries. The assessee thus prayed before the Addl. CIT, Kota to drop the proceedings. Although the Addl. CIT, Range-1,Kota had taken into consideration the submissions of the assessee as mentioned in his order yet he has referred the decision of Hon'ble Mumbai High Court in the case of CIT vs. Triumph International (P) Ltd. (2012) 345 ITR 370 in which it is held that where the loans/deposits were repaid by debiting the amount through Journal entries, it must be held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. (i) Amount of ₹ 20,00,000/- was received from Sh. Vishnu Kumar Garg through RTGS by appellant in FY 2009-10 (PB pg 10). Shri Vishnu Kumar Garg, trustee of M/s Sankalp Foundation who intended to give loan to M/s Sankalp Foundation only but due to oversight, such funds were transferred to M/S Shakti Foundation. When such mistake noticed by the trust, this loan was transferred to M/s Sankalp Foundation by book entry in A.Y. 2011-12 (PB 11). It is not a case of acceptance of deposit but penalty levied for violation in acceptance of loan U/S 271D of the Act. The following documents are relevant for this issue. S.No Particulars PB Page No 1. Copy of ledger A/c of Vishnu Kumar Garg in the books of account of assessee AY 2010-11 10 2. Copy of ledger A/c of Vishnu Kumar Garg in the books of account of assessee AY 2011-12 11 3. Copy of relevant page of Bank a/c of M/s Shakti foundation showing the entry of ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounts of Shakti Foundation for the period from 01.04.10 to 31.03.2011. 15 to 16 5. Copy of ledger a/c of Shakti Foundation in books of accounts of Career Point Infra Ltd for the period from 01.04.10 to 31.03.2011 17 to 18 6. Copy of ledger a/c of Sankalp Foundation in books of accounts of Career Point Infra Ltd for the period from 01.04.10 to 31.03.2011 19 to 20 7. Copy of ledger a/c of Career Point Infra Ltd in the books of accounts of Sankalp Foundation for the period from 01.04.10 to 31.03.2011 21 to 22 (iii) There was a opening credit balance of ₹ 4956589/- in the name of M/S Gopi Bai Foundation appearing in the books of the appellant. Such Balance was transferred by way of book entry to M/S Career Point Infra Ltd. It is not a case of acceptance of loan but the Addl. C.I.T Range-1 has treated it as acceptance of loan and levied penalty U/S 271D of the Act. The following documents are relevant for this i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k entries. The object of the section is to prevent transactions in currency ie. Cash. This is also clearly explicit from clause(iii) of the explanation to section 269SS of the Act which defines loan or deposit to mean loan or deposit of money. The liability recorded in the books of accounts by way of journal entries i.e. crediting the account of a party to whom monies payable and debiting the account of a party from whom monies are receivable in the books of accounts is clearly out the ambit of provisions of section 2699 SS of the Act because passing such entries does not involve acceptance of any loan or deposit of money. In this case, admittedly no money was transacted otherwise than through banking channels. 4) Reliance is placed on the following decisions:- S.No Name of case Case Law Paper Book Pg 1. CIT-VI V/s Worldwide Township Projects Ltd. (2014) 89 CCH 0100 (Del) 1 to 6 2. CIT V/s National Clothing Co. (2014) 91 CCH 0019 (Del) 7 to 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 taken or accepted from, or any loan or deposit taken or accepted by,- (a) 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 company84 as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; (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, notify85 in this behalf in the Official Gazette : 86[Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax ..... 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