2013 (4) TMI 750 - AT - Income Tax

Court dismisses Revenue's appeal against penalty for accepting cash share application money, not considered a deposit.

The appeal by the Revenue against the deletion of a penalty of Rs. 10,80,000 imposed under section 271D for accepting share application money in cash in ... - Issues involved: Appeal against deletion of penalty u/s 271D for violating provisions of Section 269SS.Summary:1. The Revenue appealed against the deletion of a penalty of Rs. 10,80,000 imposed u/s 271D for accepting share application money in cash in violation of Section 269SS. 2. The case involved the receipt of share application money in cash above the specified limit without allotting shares, leading to the imposition of the penalty u/s 271D. The question was whether such share application money constituted a deposit/loan under section 269SS. Reference was made to a judgment by the Hon'ble Jharkhand High Court, which established that share application money is considered a deposit until shares are allotted. Based on this, the share application money received in cash above the limit was deemed a deposit within the meaning of section 269SS.3. The Counsel for the assessee highlighted that the penalty was deleted by the ld. CIT(A) after considering the case in detail. The assessee argued that share application money should not be treated as a deposit under section 269SS, citing a previous ITAT decision. Consequently, the penalty u/s 271D was deemed inapplicable and was deleted.4. After reviewing the arguments and material on record, it was concluded that the share application money did not qualify as a deposit under section 269SS, as elaborated by the ld. CIT(A). Therefore, the appeal by the Revenue was dismissed.5. The appeal by the Revenue was ultimately dismissed, upholding the decision to delete the penalty u/s 271D for violating the provisions of Section 269SS.Separate Judgement: None.