2011 (6) TMI 747

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....e and in law, the ld. CIT(A) erred in upholding that the assessee appellant is not an agriculturist as he is partner in the firm M/s. Ree Filling Station and drawn salary from the said firm, therefore, violated the provisions of section 269SS without appreciating that the assessee appellant has joined the partnership firm on 26.08.2004 whereas the loans have been taken on 20.08.2004. 2. That on the facts & circumstances of the case and in law, the ld. CIT(A) erred in upholding that the assessee appellant is a partner in the firm and drawn salary from the said firm whereas per explanation filed no income has accrued or received by the assessee appellant till the date of accepting loans, therefore, having only agriculture income and, as such....

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.... laws: i) Decision of the ITAT, Delhi Bench in the case of Ashwani Kumar Vs. ITO, 309 ITR (AT) 69, wherein it has been held as under: "Penalty under s. 271D - Contravention of s. 269SS-Persons having agricultural income only - Assessees taking loan from their grandfather, all having agricultural income and neither of them having any income chargeable to income-tax as on the date of transaction, penalty u/s 271D would not be attracted by application of second proviso to s. 269SS - Sec. 269SS being transaction specific, it is immaterial that assessees subsequently earned taxable income - If no tax is payable by a persons, he cannot be treated as an assessee so as to subject him to the rigours of ss. 269SS and 271D. ii) Decision of ITAT, Amr....