TaxTMI 
TaxTMI 
2002 (3) TMI 237
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....ee had accepted the loan/deposit of Rs. 5,05,300 from its sister-concern M/s G.P. Taparia, Nokha. The AO was not satisfied with the reasons given by the assessee and he has levied a penalty of Rs. 5,05,300. 3. The learned CIT(A) after careful consideration of the facts of the case, held that the assessee is a contractor doing business in a remote area of Nokha Tehsil. The assessee had to make spot payments to the labour, etc. and for that the assessee needed cash. Therefore, the assessee borrowed the money from sister-concern at the work site. Therefore, it is only a technical breach of law and for a mere technical breach, no penalty was exigible. Therefore, the penalty levied by the Dy. CIT, Bikaner Range, Bikaner, was cancelled by him.....
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.... (1993) 46 ITD 10 (Cochin) (iii) Moolchand Ashok Kumar vs. Dy. CIT 21 Tax World 763 (Jp) (iv) Manoj Lalwani vs. Jt. CIT 23 Tax World 434 (Jp) 5.2 The learned Dy. CIT has not categorically mentioned whether the transactions are of loan or deposit as held in the case of A.M. Shamsudeen vs. Union of India & Ors. (2000) 164 CTR (Mad) 466: (2000) 244 ITR 266 (Mad). 5.3 The learned Dy. CIT is of the opinion that s. 269SS uses the words "any person" hence sister-concern can also be covered. Again he did not appreciate the submissions correctly inasmuch as what was submitted was that the transactions with sister-concern is neither a loan nor deposit. Hence, ss. 269SS and 269T will not apply. He relied upon the following citations : (....
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....audit report also where the tax auditor had not reported any contravention of these provisions. 5.7 Both the parties are admittedly income-tax assessees. The amount given and accepted was duly explained amount. Hence, there was no addition made under s. 68 of the Act. 5.8 While interpreting penalty provisions the legislative intent and the object behind the enactment plays important role and has always to be kept in mind. The CBDT vide its Circular No. 387, dt. 6th July, 1984, had explained that these provisions were enacted to curb the black money so that a party in a search cannot explain the available cash with reference to any third person. There were no such facts in the instant case. 5.9 In any case, the default, if any, was ....
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....r. Therefore, it was rather difficult to say that the transactions were in the nature of deposits or loans with certain conditions attached to them, either as regards the period of such deposits or loans or with regard to their repayments. From the copies of the accounts furnished, all that could be gathered was that funds had been transferred from and to the sister-concerns as and when required and since the managing partner was common to all the sister-concerns, the decision to transfer the funds from one concern to another concern or to repay the funds could be said to have been largely influenced by the same individual. In other words, the decision to give and the decision to take rested with either the same group of people or with the ....