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TMI Blog2019 (6) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... nish Singh (DR) Respondent by: Shri Vijay Mehta (AR) ORDER PAWAN SINGH, J. 1. This group of four appeal by the Revenue are directed against the order of CIT(A)-49, Mumbai dated 17.10.2016 for Assessment Years 2008-09 2009-10, which in turn arises from the penalty levied by Assessing Officer under section 271D and 271E dated 28.09.2015. In all appeals, the revenue has raised the identical grounds of appeal. Therefore, with the consent of parties all appeals were clubbed, heard tougher and are decided by consolidated order. In all the appeals Revenue has challenged the deletion of penalty either under section. 271D or 271E of the Act. For appreciation of facts we are referring the facts in appeals for AY 2008-09 in ITA No.127 128/Mum/2017. 2. Brief facts as extracted from the orders of authorities below are that the assessee is a Private Limited Company, engaged in the business of land development, construction of real estate properties and builder. The assessments for the year under consideration was re-opened vide notice under section 148 dated 11.09.2013. The assessment was completed under section 147 r.w. section 143(3) on 30/03/2015 determining tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at transaction of loan/deposit by way of adjustment through book entry would result in contravention of provisions of section 269SS. 3. On appeal before CIT(A) both the penalties were deleted vide order dated 17.10.2016. The ld CIT(A) passed consolidated order in all appeals filed by the assessee. The ld. CIT(A)while deleting the penalty u/s. 271D/271E held that genuineness of the transactions made through journal entries is not in doubt and it has not been shown either in assessment proceedings or in penalty proceedings that unaccounted income of lender or borrower was involved. There was no finding that the transactions by way of journal entries were not bonafide or made to evade tax. The ld. CIT(A) further held that the decision of the Hon'ble Bombay High Court in the case of Trump International Finance (I) Ltd. was dated 12/06/2012 and that payment of journal entry was given prior to the decision of Hon'ble Bombay High Court, which constitutes a reasonable cause within the meaning of section 273B. Aggrieved by the order of the CIT(A), the revenue is in appeal before the Tribunal. As we have already recorded that the facts in both the assessment years are identical e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further held that the assessee has not made out any reasonable cause as prescribed 273B of the Act. 7. Before ld. CIT(A) the assessee urged that journal entries is not loan or deposit of money neither there is any unaccounted cash flow money of the group entities. The assessee further contented that Section 269SS was introduced by the Finance Act, 1984. The Circular, gave the purpose of introduction of Section 269SS. The broad purpose of insertion of section 269SS was with the view to counter the device, which enables the tax payer to explain away un accounted cash or unaccounted deposits, the new section 269SS debars person from taking or accepting after 30/6/1984 from any person loan or deposit otherwise by an account payee cheque or account payee bank draft if the amount of loan or deposit or aggregating amount of such loan is ₹ 10,000/- or more. The object of insertion of section 269SS was to ensure that tax payer is not allowed to give false explanation for his unaccounted money or if he has given some false entries in his accounts, he should not escape by giving some false entries in his account, he shall not escape by giving false explanation for the same. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 2013 passed by the Commissioner of Income Tax (Appeals). On further appeal, the impugned order dated 27th June, 2014 of the Tribunal, inter alia held that penalty under Section 271D of the Act is not imposable in view of Section 273B of the Act. This for the reason that there was a reasonable cause for the failure to comply with Section 269SS of the Act. (b) On merits of the issue, the parties before us are agreed that the Tribunal was correct in holding that receipt of any advance / loan by way of journal entries is in breach of Section 269SS of the Act as the decision of this Court in Commissioner of Income Tax Vs. Triumph International Finance (I) Ltd. 345 ITR 270 is binding upon it. However, the Revenue's grievance is with the impugned order dated 27th June, 2014 of the Tribunal further holding no penalty under Section 271D of the Act is imposable in view of Section 273B of the Act in the present facts. This is so as the Tribunal holds that the failure to comply with Section 269SS of the Act was on account of reasonable cause on the part of the respondents. This finding of reasonable cause was on the application of parameters laid down by this Court in Triumph Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the normal business operations or there was any involvement of money, then, in these facts there was a reasonable cause for not complying with Section 269SS of the Act. (e) Mr. Mohanty's submission that the test laid down in Triumph International Finance (supra) will have no application in the present facts in view of the large number of entries in this case as compared to only one entry in the case before this Court. The test of reasonable cause can not, in the present facts be determined on the basis of the number of entries. If there was a reasonable cause for making the journal entries, then, the number of entries made, will not make any difference. Besides, on facts, the Tribunal was satisfied with the reasons given by the Assessee for reasonable cause and this finding is not shown to be perverse. Finally, the issue of there being a reasonable cause or not is an issue of fact. No inference of law and / or issue of interpretation is to be made. The decision relied upon by the Revenue in case of Premier Breweries Ltd.(supra) concerned itself with the issue of a claim for deduction under Section 37 of the Act on the basis of the Agreements entered into between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the book of accounts indicating deposit / loans will not fall foul of Section 269SS of the Act. Besides, the Delhi High Court in Commissioner of Income Tax Vs. Noida Toll Bridge Co. Ltd. 262 ITR 260 inter alia held that payment of ₹ 4.85 crores made by the assesses by a journal entry in its books of account by crediting the account of ILFS, would not fall foul of Section 269SS of the Act. This particularly in the absence of any payment beingmade in cash. (i) In the present facts, the period during which the journal entries were made by the respondents was in the previous year relevant to the Assessment Year 2009-10 i.e. Financial Year 2008-09. At that time, the decisions of the Tribunal in the cases of Triumph International (Supra) and decision of VH. Parekh (P) Ltd., Ketan V Parekh, Sunflower Builders (supra), Ruchika Chemicals (supra), Lala Murari Lal (supra) and the decision of the Delhi High Court in Noida Toll Bridge Co. Ltd. (supra) were holding the field. Thus, not in breach of Section 269SS of the Act. In the above view, while agreeing with the submission of Mr. Mohanty, learned Counsel for the appellant that the decision of this Court in Triumph Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises, levy of penalty u/ss. 271D of the Act is not automatic, but the genuineness or otherwise of the reasons due to which repayment was made by journal entry has to be considered judiciously. 7. In the order reported as Lodha Builders (P) Ltd. v. ACIT [2014] 163 TTJ 778 (Mum), a bunch of appeals belonging to Lodha group (to which the present assessee belongs) involving identical issue, was disposed of by the co-ordinate Bench in which levy of similar penalties was held to be not sustainable as there was a reasonable cause, copies of which have been placed on record. In deciding the dispute in favour of the assessee, the Hon'ble Tribunal had considered and applied the ratio laid down by the Hon'ble jurisdictional High Court in the case of CIT v. Triumph International Finance (I) Ltd. (345 ITR 270). 8. The aforesaid order of the Hon'ble Tribunal was approved by the Hon ble jurisdictions! High Court in their judgment and order dated 06.02.2018 in the case of CIT v. Ajinath Hi-Tech Builders Pvt Ltd. and others, copies of which have also been placed on record. In this case, it was also held that prior to the judgment in CIT v. Triumph International Finance (I) ..... 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