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TMI Blog2023 (10) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... , on a prima facie perusal of LPS-01-Page 135 , we find that there are transactions of Demand-Draft, Cheques, Plots, lands, etc. noted in the said document and at the end of document, there is a mention of deposit of Rs. 33,13,000/- at the showroom. Apparently, these transactions do not speak of cash-loans having been taken/repaid by assessee from Laxmi Narayan Shivhare. Therefore, the contentions raised by AR are very much meritorious which Ld. DR could not contradict or rebut. In these circumstances, we are unable to sustain the view taken by lower-authorities. Decided in favour of assessee. Penalty u/s 271D qua the alleged loans taken from other persons - AR submitted that although a search u/s 132 was also conducted upon assessee but the assessee never claimed to have taken loans for explaining source of any cash, jewellery, asset, investment found during search or any entry in the books of account in any of the assessment-years involve - HELD THAT:- ssessee being in liquor business, the possibility of bringing cash from shops cannot be ruled out. Secondly, we find merit in AR s submission that if the AO really believed that the assessee had taken loans from different per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OUNTANT MEMBER For the Appellant by Shri Anil Kamal Garg, Arpit Gaur, ARs For the Revenue by Shri P.K. Mishra, CIT-DR ORDER PER B.M. BIYANI, AM: Feeling aggrieved by a consolidated appeal-order dated 09.09.2021 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [ Ld. CIT(A) ], which in turn arises out of a consolidated penalty-order dated 27.09.2019 passed by learned Addl. CIT, Central Range, Bhopal [ Ld. AO ] u/s 271D 271E of Income-tax Act, 1961 [ the Act ] for assessment-year [ AY ] 2013- 14 to 2015-16, the assessee has filed these four appeals. Since these appeals emanate from a common penalty-order and common order of first appellate authority and the issues involved are also identical, they were heard together and are being disposed of by this common order for convenience and clarity. 2. Heard the Ld. Representatives of both sides at length and case records perused. 3. Briefly stated the facts leading to present appeals are such that the assessee is engaged in the business of sale of liquor and assessed regularly by Income-tax Department. A search u/s 132 was conducted on 07.01.2016 upon assessee wherein two documents in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alties are imposed on the basis of LPS-01-Page 135 by alleging that the assessee had taken cashloans from Shri Laxmi Narayan Shivhare. Ld. AR submitted that the search was conducted on Shivhare Group including assessee as well as the person named Shri Laxmi Narayan Shivhare. Thereafter, all cases including that of assessee as well as Laxmi Narayan Shivhare were centralized and the assessments were framed by the same AO. Ld. AR pointed out that although the AO alleged that the assessee had taken cash-loans from Laxmi Narayan Shivhare and accordingly invoked section 269SS in the hands of assessee but no enquiry at all was made from Laxmi Narayan Shivhare. Ld. AR submitted that when the case of Laxmi Narayan Shivhare was very much assessed by same AO, why didn t he ascertain the factual position from Laxmi Narayan Shivhare? Not only that, Ld. AR went on submitting that if the AO believed that Laxmi Narayan Shivhare had given cash-loans to assessee, it was legally incumbent upon him to examine as to whether Laxmi Narayan Shivhare had really made loans to assessee or not and if yes, then from explainable sources or unexplainable sources? Further, in the event it is found that Shri L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the showroom. Apparently, these transactions do not speak of cash-loans having been taken/repaid by assessee from Laxmi Narayan Shivhare. Therefore, the contentions raised by AR are very much meritorious which Ld. DR could not contradict or rebut. In these circumstances, we are unable to sustain the view taken by lower-authorities. We are, therefore, persuaded to delete the penalty imposed by AO u/s 271D in AY 2013-14 and 2014-15. The assessee succeeds in its appeals. ITA No. 277/Ind/2021 AY 2015-16 Penalty u/s 271D: 9. Ld. AR drew our attention to penalty-order and submitted that the AO has imposed penalty u/s 271D of Rs. 59,32,000/- which has two parts, namely (i) Penalty of Rs. 11,00,000/- imposed on the basis of LPS-01-Page 135 by alleging that the assessee had taken cash-loans from Shri Laxmi Narayan Shivhare; and (ii) Penalty of Rs. 48,32,000/- on the basis of LPS- 02-Page 48 by alleging that the assessee had taken cash-loans from other persons. 10. Regarding the penalty of Rs. 11,00,000/- qua the alleged loans taken from Laxmi Narayan Shivhare inferred on the basis of LPS-01-Page 135 , the factual position is same as discussed by us in foregoing para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee never claimed to have taken loans for explaining source of any cash, jewellery, asset, investment found during search or any entry in the books of account in any of the assessment-years involved. When section 269SS and 269T were introduced through Finance Act, 1984, the CBDT issued Circular No. 387 dated 07.06.1984 explaining the objective of these sections as under: Prohibition against taking or accepting certain loans and deposits in cash: 32.1 Unaccounted cash found in the course of searches carried out by the Income-tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons. Unaccounted income is also brought into the books of account in the form of such loans and deposits and taxpayers are also able to get confirmatory letters from such persons in support of their explanation. 32.2 With a view to countering this device, which enables taxpayers to explain away unaccounted cash or unaccounted deposits, the Finance Act has inserted a new section 269SS in the Income-tax Act debarring persons from taking or accepting, after 30th June, 1984, from any other person any loan or deposit otherwise than by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Thus, we find that the AO s action is based on mere surmises and conjectures without having any valid, positive, cogent or corroborative evidence. Fourthly, the Ld. AR has also relied upon CBDT Circular No. 387 dated 07.06.1984 to advance an argument that the intention behind introduction of section 269SS/269T as explained by CBDT clearly encapsulates, rather guards, the assessee s case. On perusal of Circular, we find the opening para itself Unaccounted cash found in the course of searches carried out by the Income-tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons . It conveys that the provisions of section 269SS/269T would trigger where the assessee explains the source of cash or any other asset found during search as representing the cash loans taken from various persons. Although we do understand that the intention behind introduction of section 269SS/269T as clarified in this Circular cannot obliterate the applicability of sections 269SS/269T which are statutory provisions once enacted, but in numerous decisions this clarification has been taken as an aid for interpreting the law and it can be certa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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