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TMI Blog2010 (4) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 3. We have heard the rival submissions and carefully perused the orders of the authorities below and the documents placed on record. 4. The facts borne out from the record are that during the course of assessment proceedings it was noticed that the assessee has taken a cash loan of ₹ 2 lakhs from his son Shri G. Krishna Murthy for the purpose of construction of house property. As accepting loan by cash of ₹ 2 lakhs was violative of the provisions contained in section 269SS of the Act, penalty proceedings u/s 271D was levied by the A.O. without considering the explanations of the assessees. The assessee preferred an appeal before the CIT(A) with the submission that though house property was constructed by the assessees, it was common property of the assessee s family where the appellant/assessee and his son were the members. The assessee s son had not paid any cash loan to the assessee but paid for certain items of construction material. In the cash flow statements, the expenditure incurred by the assessee s son was shown as inflow and the corresponding outflow was shown as the cost of construction. Though he has placed a reliance upon the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding its conclusion that a reasonable cause had been shown by the assessee. The Tribunal relied on the fact that the assessee had produced his cash books, depicting loans taken by him unilaterally before the Revenue in the instant action of the assessee in as much as the assessee did not attempt by the impugned act to avoid any tax liability. Furthermore, there is no dispute about the fact that the instant cash transactions of the assessee were with the sister concern, and that, these transactions were between the family, and due to business exigency. A family transaction, between two independent assessees, based on an act of casualness, specially in a case where the disclosure thereof is contained in the compilation of accounts, and which has no tax effect, establishes reasonable cause under s. 273B. Since the assessee had satisfactorily established reasonable cause under s. 273B, he must be deemed to have established sufficient cause for not invoking the penal provisions (ss. 271D and 271E of the Act) against him. In the case of Star Electroplaters Vs. ITO (supra), the Tribunal has taken a view that the assessee having accepted loans in cash mainly from the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 299 ITR 227). In the said decision, Hon ble Court has held that the CBDT instructions fixing monetary limits for filing appeals are statutory in nature as they were issued by the CBDT in exercise of powers under Section 119 of the Income Tax Act and the Revenue has to necessarily follow them and if a case falls under one of the exceptions provided in the circulars, a specific ground should be raised in that regard. Admittedly, the Revenue has not raised a specific ground to show that the case falls within the exceptions provided in the Circulars of CBDT. 10. Under the circumstances, by respectfully following the decision of the Hon ble Andhra Pradesh High Court cited supra, we dismiss the appeal as unadmitted on the ground that it is contrary to the policy decision taken by the CBDT. C.O. No.5 of 2008 : 11. Through this C.O., the assessee has assailed the order of CIT(A) on a solitary ground that CIT(A) ought to have deleted the entire additions of ₹ 5,26,199/- made by the A.O. towards difference in cost of construction of the house without realizing that the reference to valuation cell was not justified and valuation report so obtained was none ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction estimated by the D.V.O. but in fact the rebate was not allowed. The Ld. counsel further contended that as per the rebate given by the A.O. 25% of the cost of construction estimated by the D.V.O. is to be reduced. The D.V.O. has estimated the cost of construction at ₹ 23.69 lakhs and its 25% comes to ₹ 5.92 lakhs. Besides, the CIT(A) has also mentioned that assessing officer has allowed the subsequent investment of ₹ 5 lakhs made by the assessee in financial year 2004-05 and 2005-06 from the total cost of construction. If that is to be allowed then total rebate comes to ₹ 10,92,000/-. Whereas the difference between admitted investment i.e. ₹ 14 lakhs and the cost of construction estimated by the D.V.O. at ₹ 23.69 lakhs is only ₹ 9.69 lakhs. In these circumstances, no addition under the head Unexplained investment in cost of construction is called for. The Ld. Counsel for the assessee further contended that before the A.O. the assessee has filed the registered valuer s report in support of this cost of construction admitted by the assessees but he did not examine it. 15. The Ld. D.R. on the other hand has placed a reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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