ITAT upholds deletion of penalty for cash loans, citing permissible limits and bonafide belief The ITAT Visakhapatnam upheld the CIT (A)'s decision to delete a penalty of Rs. 9,39,000 imposed under section 271D for receiving loans in cash exceeding ...
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ITAT upholds deletion of penalty for cash loans, citing permissible limits and bonafide belief
The ITAT Visakhapatnam upheld the CIT (A)'s decision to delete a penalty of Rs. 9,39,000 imposed under section 271D for receiving loans in cash exceeding the limit prescribed under section 269SS during the assessment year 2007-08. The ITAT found that the transfers were within permissible limits, indicating a bonafide belief by the grand father that such transfers were allowed, leading to the dismissal of the Revenue's appeal and the assessee's cross objection on 13.7.2011.
Issues involved: Appeal against deletion of penalty u/s 271D for receiving loans in cash exceeding limit u/s 269SS.
Summary: 1. The appeal before ITAT Visakhapatnam concerned the deletion of a penalty of Rs. 9,39,000 u/s 271D by the CIT (A) for receiving loans in cash exceeding the limit prescribed u/s 269SS during the assessment year 2007-08.
2. The Revenue's appeal was initially barred by a 3-day delay, which was condoned, and the appeal was admitted for hearing.
3. The Assessing Officer found that the assessee received loans in cash from family members exceeding the limit, leading to the penalty. The CIT (A) deleted the penalty, prompting the Revenue's appeal.
4. The Departmental Representative argued that the CIT (A)'s relief based on the assessee's ignorance of the law was unjustified under Sec. 273B of the Act.
5. The Assessee's Representative contended that the loans were transferred for investment purposes by family members, especially due to the assessee's father's death and the care provided by the grand father, who managed financial affairs.
6. After considering submissions and evidence, ITAT found that the transfers were within Rs. 17,000 to Rs. 19,000, not exceeding Rs. 20,000 each time, indicating a bonafide belief by the grand father that such transfers were permissible. The CIT (A) had also considered these factors in deleting the penalty.
7. Upholding the CIT (A)'s decision, ITAT dismissed the appeal of the Revenue and the cross objection of the assessee on 13.7.2011.
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