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TMI Blog2019 (7) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Finance (I) Ltd [ 2012 (6) TMI 358 - BOMBAY HIGH COURT] wherein it is held that where loan / deposit has been repaid by day to day accounts of the parties through journal entries, it must be held that the assessee has committed default for the contravention of provisions of section 269SS or 269T as the case may be. But the Hon ble Bombay High Court has clarified the position with effect from 12.06.2012 date when the judgement was pronounced and prior the date of decision of Hon ble Bombay High Court in the case of Triumph International Finance (I) Ltd (supra) there was a reasonable cause for the assessee to receive deposit of loan or repayment of the same through journal entries. Accordingly, the assessee s case is squarely falls u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le cause for accepting in cash loan/ deposit/ transactions made through journal entries in excess of ₹20,000/-. For this Revenue has raised the following two grounds: - 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the penalty of ₹ 16,21,83,648/- levied under section 271D of the Income Tax Act, 1961 on the ground that genuineness of the transaction made though journal entries is not in doubt. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) having held that the assessee has contravened the provisions of section 269SS of the Income Tax Act, 1961, ought to have upheld the levy of penalty under section 271D as the assessee failed to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following cases: - (i) Hon ble Delhi High Court in the case of CIT vs. Noida Toll Bridge Co. Ltd. [2003] 262 ITR 260 (Delhi) rendered on 28.01.2003. (ii) Hon ble Rajasthan High Court in the case of CIT vs. Hissaria Bros. [2007] 291 ITR 244 (Rajasthan) rendered on 21.07.2006. (iii) Order of Co-ordinate Bench of this Tribunal in the case of CIT vs. Triumph International Finance (I) Ltd. in ITA No. 542/Mum/2007, dated 29.01.2008. (iv) Order of Co-ordinate Bench of this Tribunal in the case of Muthoot M. George Bankers vs. ACIT [1993] 46 ITD 10 (Cochin), dated 16.04.1993. Aggrieved, now Revenue is in appeal before Tribunal. 4. We have heard this appeal of Revenue. We have heard the rival contentions and gone through the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has on application of the test laid down for establishment of reasonable cause, for breach of Section 269SS of the Act by this Court in Triumph International Finance (supra) found that there is a reasonable cause in the present facts to have made journal entries reflecting deposits. The Tribunal while relying upon the order of this Court in Triumph International Finance (supra) has held that in the present facts, neither the genuineness of receipt of loans / deposits by way of an adjustment through journal entries carried out in the ordinary course of business has been doubted in the regular assessment proceedings. It held in the present facts the transaction by way of journal entries was undisputedly done to raise funds from sister conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m for deduction under Section 37 of the Act on the basis of the Agreements entered into between the parties. The inference of law in that case was whether on the facts, it could be inferred that the claim for deduction is in respect of expenditure incurred wholly and exclusively for the purposes of the business. Thus, it would involve a question of interpretation of the agreements etc. from which an inference is to be drawn. Further, it also involves application of principles of law to the facts for the purposes of deductions and, therefore, it would lead to a question of law. Therefore, the Court held in the facts of that case that a question of law does arise. (f) In this case, the issue of reasonable cause is an inference of fact from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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