TaxTMI 
TaxTMI 
2003 (4) TMI 498
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....etime in the year ended 31‑3-1996. In between this period, the assessee had obtained cash loans exceeding Rs. 20,000 on several occasions totalling to Rs. 4,96,000 from M/s. S.P.K. Balakrishnan & Co., a partnership firm in which the assessee's HUF, assessee's father and mother were partners. The Department has imposed levy of penalty under section 271D of the Act. The assessee had made the following submissions before the Commissioner (Appeals): "With reference to the above, I submit that I am full-time employee of Sree Ayyanar Spinning and Weaving Mills Ltd., Mallanginer. When I wanted to construct a residential house in the above address, my commitments connected with my employment did not give enough time to look after the constru....
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....ions where the parties are a father, a mother and son. Accommodation transactions between a parent and son cannot be called as a loan or a deposit. Please refer to the decision of the Income-tax Appellate Tribunal in the case of Mohan Karkare v. Dy. CIT 51 ITJ 595 for which a copy is enclosed. Again in other case, the Tribunal has held that a penalty under sections 271D and 271E cannot be levied in respect of cash transactions between sister concerns. Please refer to the enclosed copy of the judgment in the case of Muthoot M. George Bros. v. Asstt. CIT 74 ITD 290. It is next submitted that the object of introducing sections 269SS and 269T in the I.T. Act has been clearly explained in Circular No. 387, dated 6-7-1984 (paras 32.1 and 32.2 re....
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....e's HUF, assessee's father and mother are also partners and these monies were withdrawn in cash since the transactions were between son, father and mother. Therefore, the provisions of section 269SS have been mainly introduced with a view to prevention of evasion of tax by making fictitious entry in the books of account. The Commissioner (Appeals) held that there was absolutely no evasion of tax or doubt about the transactions and identification of the persons involved in the transactions and penalty under section 271D was not to be levied. The Revenue is aggrieved. 3. I have heard both the parties on the disputed issue and totally convinced with the reasoning given by the Commissioner (Appeals) in cancelling the penalty. First of all, the....