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TMI Blog2019 (1) TMI 1643X X X X Extracts X X X X X X X X Extracts X X X X ..... us. - Decided in favour of assessee. - I.T.A.Nos.321 to 328/CHNY/2018 (Assessment Years: 2005-06 to 2008-09) - - - Dated:- 28-1-2019 - Shri Joginder Singh, Vice Presidentand Shri A.Mohan Alankamony, Accountant Member Appellant by : ShriS. Sridhar, Advocate Respondent by : ShriAR.V. Sreenivasan, JCIT ORDER Per BENCH:- These appeals by the assessee are directed against the orders passed by the learned Commissioner of Income Tax-1 (Appeals), Puducherry both dated 15.12.2017 in ITA No.81,83,85 87/CIT(A)PDY/2016-17passed U/s.250(6) r.w.s 271D of the Act and ITA No.82,84,86 88/CIT(A)-PDY/2016-17 passed U/s.250(6) r.w.s 271E of the Act for the assessment years2005-06 to 2008-09 respectively. 2. The assessee has raised several grounds in his appeals in ITA No.321 to 324 of 2018 however the crux of the issue is that the Ld.CIT(A) has erred in confirming the order of the Ld.JCIT who had levied penalty U/s.271D of the Act for violation of Section 269SS of the Act by accepting loan otherwise than by account payee cheque. 3. Similarly the assessee has also raised several grounds in his appeals in ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld.AR further submitted that entire loan obtained by cash from Shri A. Kannan were deposited in his individual bank account and thereafter cheque was issued to M/s. New India Palmar Foods Pvt. Ltd., the company owned by the assessee and instantly it was utilized for meeting out the expenses in the following manner by payment of cheque as well as payment by cash to the employees towards salary. Assessment year : 2005 - 06 Date Cheque No. Particulars Credit Debit Avail Balance Remarks 07.08.2004 Cash rec 40000 40,000 Rec from P. Sundaramoorthy 07.08.2004 Kandaswami 40000 0 Civil work 08.08.2004 Cash r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 Latha Steel 300000 7,515 Supplier Bills Total 880000 872485 ICICI 005605001978 Assessment year : 2006 - 07 Date Cheque No. Particulars Credit Debit Avail Balance Remarks 06.05.2005 Bank Balance 3,53,654.21 06.05.2005 Cheque deosit 8,80,000 12,33,654 Rec from P.Sundaramoorthy 06.05.2005 792770 Latha Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.03.2006 877496 Bharti Telecom 25219 5,33,094.9 Supplier Bills 17.03.2006 827400 EswariAgen 39321 4,93,773.9 Supplier Bills 18.03.2006 886002 Indian Oil Cor 290000 2,03,773.9 LDO oil purchase 20.03.2006 886001 TRFR TO:TO Shri Narayana Ent 200000 3,773.90 Supplier Bills Total 2740000 3277782 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheque deposit 3,20,000 2,93,212 Rec from P. Sundaramoorthy 22.01.2007 Cheque deposit 2,00,000 4,93,212 Rec from P. Sundaramoorthy 22.01.2007 684594 Indian Oil Cor 306000 1,87,212 LDO oil Purchase 22.01.2007 666824 The National Scientific 3664 1,83,548 Supplier Bills 23.01.2007 684593 Oven drawing 21000 1,62,548 Consulting charges 23.01.2007 606512 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Meenakshi Milling 13015 68,376 Supplier Bills 05.11.2007 Cash rec 300000 3,68,376 Rec from P. Sundaramoorthy 05.11.2007 Cheque deposit 600000 9,68,376 Rec from P. Sundaramoorthy 05.11.2007 Loan EMI 406874 5,61,502 HSBC 05.11.2007 Loan EMI 92592 4,68,910 HSBC 13.11.2007 Cash rec 300000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lved in any activity generating or encouraging black money. The provisions of Section 269SS, 269T, 271D 271E of the Act are enacted only to curb black money and in the case of the assessee, it is evident that he did not generate or tried to hide black money by the cash transactions. In the case decided by the Hon ble Jurisdictional High Court reported in 283 ITR 329 (Mad) in CIT vs. Kundrathur Finance And Chit Co., it was held that Deleting penalty by exercising the discretion conferred U/s.273B of the Act is justified if there was genuine and bonafide transaction of obtaining loan by cash due to certain constrains . Further in the case sst. Director of Inspection (Investigation) vs. Kum A.B. Shanthi and Chamundi Granites Pvt. LTd., vs. DCIT and another reported in 255 ITR 258, the Hon ble Apex Court observed as follows: The object of introducing section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he makes some false entries, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the tax-payer would usually give the explanation that he had borro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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