TaxTMI 
TaxTMI 
2013 (11) TMI 1246
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....a Nath. There is another HUF composed of one Mr. Anirdam Nath and his mother Sushmita Nath. 4. The Anirban Nath Sushmita (HUF)-the assessee-appellant was in need of money to apply for allotment of shares of two companies M/s Trimurti Fertiliser Ltd and Crown Leasing & Finance Co. Ltd. It approached Arindam Nath Sushmita HUF, and Arinban Nath (individual) for giving loan of Rs. 6, 45, 000/- and Rs. 5, 60, 000/- respectively. The loans were advanced and the money was paid by the creditors to the companies directly. There was no term fixed for repayment of these loans, however, the interest was to be paid at the market rate. The shares were allotted in favour of assessee-appellant by the companies. The investment, however, did not fetch any p....
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....n the account of Anirban Nath (individual) of Rs. 5, 95, 560/- and in the account of Arinban Nath Sushmita (HUF) (assessee-appellant) of Rs. 7, 50, 979/-. These balances got adjusted to the extent of Rs. 9, 14, 000/- on account of sale of shares. Since the amount was not repaid by account payee cheque or account payee bank draft, the transaction falls within the mischief of Section 269-T of the Act and thus penalty is leviable under Section 271-E. 8. Shri S.D. Singh has preferred this appeal on the grounds as follows:- "(i) Whether, in absence of a finding by the Tribunal that part repayment (of loans) of Rs. 9, 14, 000/- was against any "deposit"; penalty could be imposed, such a view being contrary to the provisions of section 269T read....
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....sed the fact that the existing provision did not have any application to loans. The amendment was intended to extend its scope to loans also, hence, loans came within the purview of Section 269-T and the penalty provisions of Section 271-E w.e.f. June 1, 2002. In a case, where the repayment was made of the loan taken from a sister concern in the assessment year 2001-02 contrary to the provisions of Section 269-T, the penalty could not be levied under Section 271-E. 11. In A.M. Shamsudden v. Union of India and others (supra) the Madras High Court held that Section 269SS of the Act occurs in Chapter XX-B deals with two different kinds of transactions, namely, loans and deposits. Section 269T covers one of the transactions namely the deposit.....
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....me in the year 2002 w.e.f June 1, 2002. The Statement of Objects in Clause 95 of the Budget 2002-03 reads as follows:- "Modification of the provisions relating to mode of repayment of certain deposits.--Under the existing provisions of Section 269T of the IT Act, no branch of a banking company, co-operative bank and no other company or co-operative society or partnership firm or other person, can repay any deposit made with such entity otherwise than by an account-payee cheque or an account-payee draft drawn in the name of the person who has made the deposit, in cases where the amount of deposit or the aggregate of the deposits held, exceeds twenty thousand rupees. The Explanation below Sub-section (2) of the said section defines 'deposit'....
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....ions of Section 269-T will be applicable only where cash was introduced to explain seizure in search cases. The scope of Section 269-T is not restricted in such cases only. 16. We find that the Assessing Officer, Appellate Authority as well as Tribunal did not consider the method of transaction, which was by way of discharge of the liability of the loan. The assessee was paying interest on the loan regularly as reflected in his statement of affairs and profit and loss account in the financial years 1992-93 and 1993-94. The repayment of loan was not made after sale of shares. The assessee appellant had debited the account being cost of shares. The transaction between Karta of HUF and the HUF could not be termed as deposits as provided under....