TaxTMI 
TaxTMI 
2015 (10) TMI 2238
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....e case are that the assessment of the assessee u/s. 143(3) was completed on 11.12.2009 at a total income of Rs. 1,03,78,160/- as against returned income of Rs. 1,02,55,632/-. During the course of assessment proceedings, the Assessing Officer having perused the loan account of Shri Harpal Singh Pasricha, Managing Director of the assessee company, noticed that a loan of Rs. 30 lacs was accepted by the assessee company on behalf of Shri Harpal Singh Pasricha from the proprietary company of Ms. Neelam Kaur, M/s. Navyug Sales Corporation by passing a book entry in its books of account. The AO further observed that since accepting of loan/deposits otherwise than by an account payee cheque or account payee bank draft exceeding Rs. 20,000/- was in ....
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....herefore, reasonable cause u/s. 273B does not come to the rescue of the appellant. Aggrieved by the impugned order, the assesseecompany has come up in this appeal before us. 3. The ld. Counsel for the assessee contended that in order to expore financial assistance from lending institution, the assessee company had the requirement of raising its share capital which was agreed to be pooled by its directors in the following combination: Mr. Harpal Singh (MD) Rs.50,00,000/- Smt. Neelam Kaur(Director) Rs.15,00,000/- Total Rs.65,00,000/-. The above directors had already given loans to the assessee company which had credit balances of Rs. 28,83,793/- and Rs. 68,94,925/- respectively and it was decided to convert the loan A/....
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.... was also argued that the shares were subsequently allotted to Shri Harpal Singh Pasricha and Mrs. Neelam Kaur as the loan account of both Directors was later on adjusted against share capital and shares were issued subsequently. In support, ld. AR of the assessee relied upon following decisions: (i). CIT vs. Noida Toll Bridge Co. Ltd., 262 ITR 260 (Del) (ii). CIT vs. Worldwide Township Projects Ltd. (2014) 367 ITR 433 (Delhi) (iii). Order dated 16.01.2015 of ITAT, Delhi (ITA Nos.2253 & 2259/Del/2013 & Ors.) in the cases of ACIT vs. M/s. Vardaan Fashion and ACIT vs. Shri Inderpal Singh Wadhawan. (iv). Bombay Conductors & Electricals Ltd. vs. DCIT(1996) 56 TTJ(Ahd.) 580 (v). Sunflower Builders (P) Ltd. vs. DCIT (1996) 61 ITD (....
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....sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by,- (a) the Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Pr....
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....arent that the deposit or loan must be through money, as explained in Explanation (iii) to this section. It is not in dispute that the loan of Rs. 30 Lakhs has been accepted by the assessee-company in the present case by way of journal entry (book entry) and there is no transfer of funds. Such acceptance of loan by way of journal entry, being not covered by the provisions of section 269SS, the assesseecompany cannot be held to be liable for penalty u/s. 271D for acceptance of loan in violation of section 269SS. As a matter of fact, the journal entry passed in assessee company's account had the effect of reducing loan of one director and recording the loan of other director. Thus, the loan of one director was transferred to be held as loan o....