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of <h1>Tribunal Upholds Decision: No Penalty for Journal Entries Between Sister Concerns, No Breach of Section 269SS Found.</h1> 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 ... Deposits - Mode of taking/accepting - Levy of penalty u/s 271D - transactions entered into by book entry did not involve movement of cash - HELD THAT:- Looking to the facts and circumstances of the case, we find that in the instant case, the assessee has transferred the funds from one concern to its sister concern. There was no evidence to show that money was loaned or kept deposited for a fixed period or repayable on demand. We also find that accounts of Ambuja Agro Industries were credited by journal entries on account of payments made by the said company for and on behalf of the assessee-company and there was no actual receipt of money. The assessee has given this explanation to the AO and CIT(A) and considered by this relevant account entries and held that no deposit has been taken in violation of s. 269SS and our interference is not required. The learned counsel has drawn our attention to paper book filed by him at p. 10 and p. 12 in which Rs. 5,00,000 have been transferred from Ambuja Agro Industries Ltd. on 16th March, 1992. This amount was credited in the account of B.D. Agarwal & Co. Therefore, our interference is not required with the order of the CIT(A). In the result, the Revenue's appeal is dismissed. 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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