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TMI Blog2024 (10) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... should draw its colour from other words used in the provisions contained in section 269SS of the Act i.e., money receivable as an advance . Invoking the doctrine of Ejusdem Generis, we are of the view that the term otherwise should be interpreted in a narrow sense and it must include the words similar to money receivable, as advance . In other words, the term otherwise cannot be given a wider interpretation. The Hon ble Supreme Court in the case of Kamlesh Kumar Sharma Vs. Yogesh Kumar Gupta [ 1998 (2) TMI 600 - SUPREME COURT ] held that wherever there is term otherwise the word is to be given a restricted meaning. Further on the facts of the present case, we find there is reasonable cause as mandated under section 273B of the Act, for the failure to comply with section 269SS of the Act. Section 269SS of the Act was amended by the Finance Act, 2015, wherein the term specified sum was introduced to include amount received for transfer of immovable property as a measure to curb generation of black money. In the present case, there was no intention, whatsoever, to generate unaccounted money/black money as the assessee had recorded the receipt of entire cash in the registered sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and had also disclosed the capital gains arising on the sale of property. The assessee in the return of income claimed exemption under section 54 of the Act with regard to investment made from sale proceeds of the property. The assessment was selected for scrutiny by issuance of notice under section 143(2) of the Act. The Assessment Order was passed under section 143(3) of the Act (Order dated 09.12.2019) accepting the returned income. 3. However, during the course of assessment proceedings, it was noticed by the AO that assessee was in receipt of cash of Rs.49,10,000/- on account of sale of property on 15.06.2016. The AO was of the view that accepting cash on account of sale of immovable property was in contravention of provision of section 269SS of the Act which was amended by Finance Act, 2015 w.e.f. 01.06.2015, whereby the amount of cash received of more than Rs.20,000/- on account of sale of property was also included as violation of section 269SS of the Act. Accordingly, assessee was issued show cause notice under section 274 of the Act r.w.s. 271D of the Act on 11.01.2022. In response, assessee submitted as follows: I pushpalatha, I have sold my house property during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of hearing. 7. The learned AR submitted that there was no agreement for sale and the amount of Rs.49,10,000/- has been received as part of the sale consideration while executing the sale deed. Therefore, it was submitted that provisions of section 269SS of the Act will not have application. In this context, the learned AR relied on the Orders of the Tribunal in the case of ITO Vs. Shri. R. Dhinagharan (HUF) in ITA No.3329/Chny/2019 (Order dated 29.12.2023) and in the case of Ramkumar Reddy Satty Vs. ACIT in ITA No.488/Hyd/2023 (Order dated 19.03.2024). 8. The learned DR, on the other hand, submitted that Explanation (iv) to section 269SS of the Act defines the meaning of specified sum as any sum of money receivable as advance or otherwise with respect to transfer of an immovable property, whether the transfer takes place or not. It was submitted by the learned DR that the term otherwise is wide enough to cover not only advance received during the course of sale transaction but would also cover sale consideration received during the execution of sale deed. 9. We have heard the rival submissions and perused the material on record. Admittedly, assessee had received cash amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the word otherwise , it would thwart the very object of the Act.... The word otherwise has to be read as ejusdem generis, that is to say, in group similar to death, resignation, long leave vacancy, invalidation, person not joining after being duly selected. Hence the word otherwise cannot be given the wide and liberal interpretation which would exclude a large number of expected applicants who could be waiting to apply for the vacancies occurring in the succeeding year in question. 11. Further, the Hyderabad Bench of the Tribunal in the case of Suman Savings and Investments Pvt. Ltd., reported in (1987) 23 ITD 345 (Hyd.), had accepted the Department s contention that the principle of Ejusdem Generis should be applied to the term otherwise in section 40A(8)(c)(iv) of the Act and that it should be interpreted within the context in which it is used. The relevant finding of the Hyderabad Bench of the Tribunal reads as follows: 9. We are not persuaded by the contention of Sri Parthasarathy that the term 'otherwise' occurring in sub-cl. (iv) of cl. (c) of Explanation to sub-s. (8) of s. 40A would cover the chit fund business. The Legislature in its superior wisdom has use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced as under: o specified sum means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. The Budget Speech of the Hon'ble Finance Minister while placing the Finance Bill, 2015 highlighting the intention of the amendment relevant for decision making in the present appeal is captured below: 3. A. Measures to curb black money 3.1 With a view to curbing the generation of black money in real estate, it is proposed to amend the provisions of section 269SS and 269T of the Income-tax Act so as to prohibit acceptance or re- payment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions. The Memorandum forming part of Finance Bill, 201.5 highlighting the intention of the amendment is captured below: B. MEASURES TO CURB BLACK MONEY Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances The existing provisions contained in section 269SS of the Income- tax Act provide that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained in section 269SS provides that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit is twenty thousand rupees or more. It is proposed to substitute the said section so as to provide that no person shall take from any person, any loan or deposit or specified sum, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit or specified sum is twenty thousand rupees or more. It is also proposed to define specified sum as any sum of money receivable, whether as advance or otherwise in relation to transfer of an immovable property whether or not the transfer materialises. These amendments will take effect from 1st June, 2015. 12.1 In the present case, the sale consideration was received in cash at the time of execution of multiple sale deeds from different persons for the sale of plots and accepted as genuine in the assessment order completed on 23.05.2018 and admittedly there was no advance received by the seller. The amended provisions ..... 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 by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. 54.4 Section 269T of the Income-tax Act has also been amended to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of anadvance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place. 54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made. 54.6 Applicability: These amendments have taken effect from 1st day of June, 2015. From the above provisions, Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions have been provided in the section. Similarly, the existing provisions contained in section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the section if the amount of loan or deposit is twenty thousand rupees or more. In order to curb generation of black money by way of dealings in cash in immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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