Tribunal remits cash loan verification, directs S.271D reevaluation. Revenue appeal allowed, assessee cross objection dismissed.

The Tribunal remitted the matter to the Assessing Officer to verify if a cash loan was actually received by the assessee or if there were only journal entries, directing a reevaluation of the applicability of the penal provisions of S.271D. The Revenue's appeal was allowed for statistical purposes, while the assessee's cross objection was dismissed.

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Issues involved:
The only issue involved in the appeal of the Revenue relates to the action of the CIT(A) in cancelling the penalty u/s 271D of the Act.

Details of the Judgment:

Issue 1: Imposition of Penalty u/s 271D
The Assessing Officer imposed a penalty of Rs. 24,01,500 u/s 271D of the Act for the assessment year 2005-06, based on the belief that the assessee had contravened the provisions of S.269SS by accepting a cash loan. The CIT(A) deleted the addition made under S.68 of the Act, stating that the cash loan taken by the assessee was shown in the Receipts and Payments Account, hence no addition could be made under S.68. The CIT(A) observed that no cash loan was accepted by the assessee, as the transaction was a journal entry between M/s. Lahari Green Park and the vendor, with no direct involvement of the assessee. The Revenue contended that there was a clear violation of S.269SS and the penalty should be upheld. However, the Authorised Representative for the assessee argued that no cash loan was accepted, and the CIT(A) rightly deleted the penalty. The Tribunal decided to remit the matter to the Assessing Officer to verify if a cash loan was actually received by the assessee or if there were only journal entries, directing a reevaluation of the applicability of the penal provisions of S.271D.

Separate Judgment:
The cross-objection of the assessee, which supported the CIT(A)'s order, was dismissed as it did not require independent adjudication. The Revenue's appeal was allowed for statistical purposes, and the assessee's cross objection was dismissed.

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