Cash sale consideration for immovable property is outside the loan-or-deposit bar, so penalty was unsustainable.

Section 269SS applies only to loans or deposits and does not extend to cash receipt of sale consideration for transfer of immovable property. Where the amount was received as sale consideration in cash, the basis for penalty under section 271D was absent because the transaction was not a loan or deposit. The authorities had therefore misapplied the provision in sustaining the penalty, and the penalty was deleted.

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Issues: Whether penalty under section 271D of the Income-tax Act, 1961 could be sustained for receipt of cash sale consideration on transfer of immovable property, when section 269SS applies to loans or deposits.

Analysis: Section 269SS prohibits acceptance of loan or deposit otherwise than by account payee cheque or bank draft. On a plain reading, the statutory bar is confined to loan or deposit and does not extend to receipt of sale consideration for immovable property. Since the amount in question was received as sale consideration in cash and not as a loan or deposit, the foundation for invoking section 271D was absent. The authorities below therefore misapplied the provision while sustaining the penalty.

Conclusion: The penalty under section 271D was not sustainable and was deleted. The assessee succeeded.

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