Appeal allowed due to technical breach in income recording; penalty deleted under section 271D.

The Tribunal allowed the appeal, ruling that the technical breach of recording surrendered income in the sons' names did not justify penalty imposition under section 271D of the Income-tax Act, 1961. Citing legal precedents and absence of malafide intent, the penalty was deleted, emphasizing the significance of reasonable cause in such matters.

---

---

Issues Involved:
- Appeal against penalty imposed under section 271D for contravention of section 269SS of the Income-tax Act, 1961.

Detailed Analysis:

Issue 1: Penalty Imposition under Section 271D
The appeal was filed against the penalty imposed under section 271D for contravening section 269SS of the Income-tax Act, 1961. The assessee had surrendered excess stock and cash during a survey, recording the amount in the names of two sons as a loan. The Assessing Officer initiated penalty proceedings, which were confirmed by the Ld. CIT(A). The main argument was that since the amount was surrendered and recorded in the names of the sons, without any malafide intention, penalty should not have been levied.

Analysis: The Tribunal noted that the excess cash was surrendered in the names of the sons, not as a loan taken by the assessee. Citing precedents, including the case of CIT v Sunil Kumar Goel, it was established that transactions between relatives without malafide intent do not attract penalty. The Tribunal found it to be a technical breach as the amount was recorded in the sons' names for accounting purposes. Relying on legal reasoning, the Tribunal concluded that this was not a suitable case for penalty imposition and thus decided to delete the penalty.

Conclusion:
The Tribunal allowed the assessee's appeal, emphasizing that the technical breach of recording the surrendered income in the sons' names did not warrant penalty imposition. The decision was based on legal precedents and the absence of malafide intent in the transactions. The penalty under section 271D was deleted, highlighting the importance of reasonable cause in such cases.

---