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TMI Blog2023 (2) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... posit. AO has presumably failed to construe the transaction as well as meaning of section 269SS read with section 271D. The more surprising factor is that ld. Principal CIT (Admin.), who has given permission to file the appeal, failed to appreciate the order of the ld. CIT(Appeals) before authorizing the revenue to file the appeal before the Tribunal. It is unnecessarily wastage of resources. Appeal of the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the ld. CIT(Appeals) is self-explanatory, therefore, we deem it appropriate to take note of this order, which is a brief one and reads as under:- "1. The appellant is a Public Limited Company engaged in the business of executing civil contract. The assessee company has also started Chit Fund business (Collective Investment Scheme). During the Assessment year 2010- 11 the appellant company with a view to broadbase its business activities, raised the capital by issuing 1,01,85,760 no. of preference shares of Rs. 10 each, collected Rs.10,18,57,600/- as preference shares application money from various share applicants. In the captioned year the same amount was reflected in audited balance sheet as at 31.03.2010 as "share application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case AO erred in considering the receipt of Redeemable Pref. Share Application Money of Rs.10,26,32,600/- as deemed deposit u/s 269SS, despite Statutory Compliances under Companies Act were made against issue of shares. (iii) That under the facts & circumstances of the case Ld. JCIT erred in imposing the penalty Rs.10,18,57,600/- u/s 271D being receipt of preference share application money in cash against alleged violation of 269SS, therefore order imposing penalty is illegal, unjustified, beyond the provision of law & liable to be quashed. (iv) That under the facts & circumstances of the case Ld. JCIT erred in imposing the penalty Rs.4,86,960/- being the receipt of consideration against construction work Rs. 22,61,534/- execute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh a bank account. Therefore, the first precondition for invocation of penal provision of Sec. 27ID is that there a person should obtain a Loan or deposit. Thereafter, the 2nd precondition comes into picture which is that the said loan or deposit must be received in cash. From the facts as narrated above it is not in dispute that money has been received in cash. This position is discernible from the copy of the penalty order and also accepted by the AR of the appellant. The sole issue which is in dispute in this appeal is whether the appellant had received deposit in disguise of share application money or not. 4.2.2. From the facts available on record it is clearly evident that what appellant had received is share application money and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h amount Rs. 25,000/- as application money & those as on today." (e) Gouri De - "I have applied for Preference shares of Rs. 10 each of M / s . Sunplant Construction Ltd. with amount Rs. 30,000/- as application money. I am holding those shares as on today." 4.2.3. I had also gone through the decisions relied upon by the Ld. AR in support of his contention that the provision of Sec. 271D does not apply in case of Share application money. The decision of Hon'ble Madras High Court in the case of CIT -vs.- Rugmini Ram Raghav Spinners Pvt. Ltd 304 ITR 417 is squarely applicable on the facts of the case wherein the Hon'ble Court has categorically held that the share application money is not loan or deposit and hence not falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheque or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, if,- (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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