Tax Tribunal Rules No Penalty for Cash Receipt at Property Sale, No Section 269SS Violation, Appeal Allowed.

The ITAT ruled in favor of the appellant, a Book Maker, regarding a penalty under section 271D of the Income Tax Act, 1961, for receiving Rs. 9,38,000 in cash during a property sale. The Tribunal found no violation of section 269SS, as the cash was received at registration, not as an advance. Consequently, the penalty was deemed not applicable, and the appellant's appeal was allowed.

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Issues:
The judgment addresses the issue of penalty levied under section 271D of the Income Tax Act, 1961 for receiving cash in a property sale transaction, specifically examining the applicability of section 269SS of the Act.

Summary:
The appellant, a Book Maker of Hyderabad Race Club, sold a property for Rs. 39,38,000, receiving Rs. 9,38,000 in cash at the time of registration. The Assessing Officer imposed a penalty under section 271D for this cash receipt. The CIT(A) upheld the penalty, citing violation of section 269SS, despite the appellant's explanation of the cash payment being due to the purchaser's lack of sufficient bank balance. The appellant contended that the provision of 'specified sum' introduced in 2015 does not apply as the cash was received at the time of registration, not as an advance. The Tribunal referred to a previous case where it was held that the 'specified sum' provision is for advance receivable, not final payments made at registration. Consequently, the Tribunal ruled in favor of the appellant, stating no violation of section 269SS and thus no penalty under section 271D is applicable.

Therefore, the Tribunal allowed the appellant's appeal, emphasizing that the cash received at registration did not contravene section 269SS, leading to the penalty being deemed not leviable.

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