Tribunal Upholds Decision: No Penalty for Journal Entries Between Sister Concerns, No Breach of Section 269SS Found.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the penalty of Rs. 13,44,999 under s. 271D. It concurred that the transactions, executed via journal entries without actual cash movement, did not breach s. 269SS. The Tribunal recognized a reasonable cause under s. 273B, noting the transactions were between sister concerns for urgent business needs, thus validating the CIT(A)'s findings.

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Issues involved:
The appeal by the Revenue against the order of the CIT(A)-XII, Ahmedabad, for asst. yr. 1992-93 regarding the deletion of penalty u/s 271D of Rs. 13,44,999 on the plea that the transactions entered into by book entry did not involve movement of cash.

Summary:
The AO found that the assessee had taken deposits from Ambuja Agro Industries Ltd. of Rs. 33,59,092 otherwise than by an account payee cheque/draft, violating provisions of s. 269SS of the IT Act, 1961. The penalty under s. 271D of Rs. 13,44,999 was imposed, which the CIT(A) later deleted. The CIT(A) observed that the accounts were credited by journal entries, with no actual receipt of money, thus s. 269SS provisions did not apply. The CIT(A) also cited the judgment of the Hon'ble Tribunal, Ahmedabad Bench, in a similar case for asst. yr. 1991, to support the decision.

Further, the CIT(A) found that even if a breach existed, a reasonable cause under s. 273B was present, as the transactions were for urgent business needs and made under a bona fide belief. The Tribunal concurred with the CIT(A)'s findings, noting that the funds were transferred between sister concerns without evidence of a loan or deposit, and no interference was required with the CIT(A)'s order.

Therefore, the Revenue's appeal was dismissed based on the above considerations.

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