TaxTMI 
TaxTMI 
2009 (4) TMI 803
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....of section 269T as the payment of loan amounting to Rs. 86,350 has been paid in cash. The assessee submitted before the Assessing Officer that M/s. Ram Kumar Krishan Kumar was in urgent need of money and he could not wait up to clearance of cheque, and as such the assessee indeed made the repayment of loan in cash. The assessee also filed the copy of account with M/s. Ram Kumar Krishan Kumar. The assessee also filed copy of cash receipt given by M/s. Ram Kumar Krishan Kumar confirming the receipt of repayment of loan in cash. The Assessing Officer initiated penalty proceedings under section 271E and issued a show cause notice under section 271E dated February 28, 2006, fixing the hearing on March 22, 2006. In the course of penalty proceedings, the assessee filed its reply vide letter dated May 31, 2006, and letter dated June 6, 2006, where it was submitted that the assessee had a credit balance in the account of M/s. Ram Kumar Krishan Kumar, and an amount of less than Rs. 20,000 was repaid in cash on a single day as the concerned party had refused to accept the payment by way of cheque. It was further submitted that the said party was an incometax assessee. It was further submitte....
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....an Kumar, the transaction of accepting or paying money were taking place between the assessee and M/s. Ram Kumar Krishan Kumar. He further submitted that the transaction in question was neither loan nor deposit as contemplated under section 269T of the Act. He further submitted that the repayment of the amount were made in cash as the party concerned was in an urgent need of money and refused to accept the amount by account payee cheque or draft. He further submitted that in the course of survey operation under section 133A at the business premises of the assessee, the assessee had declared or surrendered an amount of Rs. 6,34,925 and paid the tax accordingly, on the understanding that the Department would not levy any penalty. He, therefore, submitted that the penalty confirmed by the learned Commissioner of Income-tax (Appeals) is totally unjustified and it is, thus, to be deleted. The learned Departmental representative, on the other hand, supported the orders of the authorities below. We have considered the rival contentions of both the parties and have carefully gone through the orders of the authorities below. The accounts between the assessee' s business concern and M/s. ....
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.... meaning of section 269T of the Act. However, the Assessing Officer has issued the show-cause notice on the footing that the assessee has made the repayment of loan in cash in violation of the provisions of section 269T of the Act. The case made out by the Assessing Officer while imposing the penalty is the case of repayment of loan and not deposit. It is now clear that on or after June 1, 2002, both loan or deposit are covered by section 269T of the Act. The word " loan" has been inserted in section 269T by the Finance Act, 2002, with effect from June 1, 2002. The object of the amendment was to cover the repayment of both the loan and deposit under section 269T making it par with section 269SS, which covered both the loans and deposits for acceptance. We, therefore, hold that the repayment of loan on or after June 1, 2002, is also covered by section 269T of the Act. In the reply before the Assessing Officer, the assessee stated that M/s. Ram Kumar Krishan Kumar was in urgent need of money and he could not wait up to the clearance of cheque and as such the assessee indeed made the repayment of loan in cash. It goes to show that the transaction was a repayment of loan, was not at a....
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....in the year 1983 or 1984 is not well founded. In my view, the date on which the loans were obtained is not relevant for the applicability of section 269T of the Act and the question has to be considered when the loans were repaid. The loans were admittedly repaid in the year 1991 and at that time, the provisions of section 269T have come into force and the question whether the provisions were in force on the date when the loans were taken is not relevant for the applicability of section 269T. Admittedly, the provisions of section 269T were in force on the date when the loans were repaid in cash and, therefore, I reject the submission of learned counsel for the petitioner that the provisions of section 269T are not applicable as the loans were obtained prior to the introduction of the provisions of section 269T as untenable." We make it further clear that when the Legislature did not intend to exclude the current loan or deposit from the definition of loan or deposit, there is no reason to stretch or narrow down the definition of loan or deposit given in the Explanation to that section in the Act itself. A plain reading of language used in the definition of "loan or deposit" in sec....