2011 (1) TMI 1354

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....n regarding acknowledgement of debt effected though journal entries in the books of the assessee would not amount to acceptance of any loan or deposit otherwise than account payee cheque or account payee bank draft within the meaning of section 269SS to attract levy of penalty u/s. 271D of the IT Act, 1961. 2.On the facts and in the circumstances of the case and in law, while deleting penalty, the ld. CIT(A) overlooked that the assessee along with others, was found to be indulging in large scale manipulation of prices of select scripts through fraudulent use of bank and other public funds and had flouted all the norms of risk management by making transactions through a large number of entities so as to hide the nexus between the source o....

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....of the group involving identical facts, the penalty levied by the Deparmtent u/s. 271D stood deleted by the ITAT. The A.R further placed reliance on High court judgement in the case of Noida Toll Bride Co. Ltd. (262 ITR 260)(Del) wherein it was held that provisions of section 269SS and 269T were not attracted in case of journal entries. Further reliance was placed on the judgement of Sunflower Builders (P) Ltd. 61 ITD 227 (Pn). Relying on the aforesaid judgment of the ITAT and High Court, the Assessee contended that penalty levied by the Additional Commissioner u/s. 271D deserved to be cancelled. 5.The CIT(A) noticed that the ITAT in the assessee's group had held that penalty cannot be levied when the payments were made through journal e....