2013 (2) TMI 211

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....nal was right in deleting the penalty of Rs.20,99,393/- levied under Section 271D of the Income Tax Act for violation of Section 269SS on the ground that the assessee had taken the loan only from her father-in-law and the transaction was genuine?"   2. The assessee, for the assessment year 2005-2006, claimed loan of Rs.20,99,393/- taken from her father-in-law for purchasing the property. The Assessing Officer initiated penalty proceedings under Section 271D of the Income Tax Act, 1961 on the ground that the assessee had obtained a loan of Rs.20,99,393/- in cash from her father-in-law, which is in contravention of the provision of Section 269SS of the Income Tax Act. During the penalty proceedings, the assessee claimed that the amoun....

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....ing amount of Rs.20,99,393/- is between the father-in-law and daughter-in-law and the genuineness of the transaction is not disputed, in which, the amount has been paid by the father-in-law for the purchase of property. On those findings, the Tribunal allowed the appeal.   5. Mr.J.Narayanasamy, learned standing counsel appearing for the Revenue submitted that the Tribunal has not appreciated the nature of transaction and that the assessee had taken only loan of Rs.20,99,393/- from her father-in-law. He further submitted that the assessee had no where pleaded any 'reasonable cause' as contemplated under Section 273B of the Income Tax Act and while so, the Tribunal was not right in saying that the genuineness of the transaction is not....

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....ions are bonafide, penalty cannot be imposed.   9. To substantiate the plea that her father-in-law had advanced the amount as cash gift, the assessee's father-in-law had filed an affidavit before the Commissioner of Income Tax (Appeals). Regarding the affidavit, remand report was called for from the Assessing Officer. In the remand report, the Assessing Officer has doubted the nature of transaction. In our considered view, in the light of the relationship between the assessee and her father-in-law, the Tribunal has rightly held that the genuineness of the transaction is not disputed, in which, the amount has been paid by the father-in-law for purchase of property and the source had also been disclosed during the assessment proceedin....