TaxTMI 
TaxTMI 
2016 (1) TMI 633
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....oans exceeding Rs. 20,000/- from/to M.Subramaniam (HUF) thereby contravening the provisions of section 269SS and 269T of the Act. Thus, the Assessing Officer levied penalty under section 271D and 271E of the Act. The assessee contended before the Assessing Officer that he has not received any loan or deposit but it is only an accommodation transaction there is no revenue leakage or evasion of tax from accepting and repaying the amounts from HUF, therefore pleaded that no penalty to be levied. However, the Assessing Officer levied penalty for accepting and repaying the amounts exceeding Rs. 20,000/- in cash. On appeal, the Commissioner of Income Tax (Appeals) sustained the penalties levied rejecting the contention that penalties could not attract for genuine credits. He further held that there is no reasonable cause for accepting and repaying loans and thus he sustained the penalties. 3. Counsel for the assessee strongly places reliance on the decision of jurisdictional High Court in the case of Smt. M.Yesodha (351 ITR 265) and submits that an identical issue had come up before the High Court wherein the assessee accepted the amount exceeding Rs. 20,000/- from her father-in-law f....
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....se of making any fictitious entries in the books of accounts without there being any actual transaction. 4. M.Subrarnaniam (HUF) is also assessed to income tax in PAN: AABHS5D66RJVVard-II(2)/CBE and it has filed his return of income for the Assessment year 2009*10 on 02-07-2009. 5. M.Subramaniarn (HUF) had sold property at D-2, 1st floor D Block, Door No,25-02, Bharathi park 4th Cross,Alagesan Road" Saibaba Colony, Coimbatore. for Rs. 42,00,000/- During the assessrnent year 2009- 10 the appellant not the money from HUF for the purchase of another property in her 'individual name along with her husband Shri. M, Subramaniam and had advanced Rs. 27,00,000 /- to Mr. K.Ramesh, Coimbatore. 6. The above transactions between the family members are genuine and bonafide transactions. 7. The source of money had already been disclosed in the respective returns of income. 8. The Assessing Officer had passed order u/s. 143(3) for the assessment year 2009-10 accepting the returned income in the appellant's case. 9. the appellant had no intention to evade tax and did not make any attempt to avoid any tax liability. 10. Though it is....
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....nuine and bona fide transaction and the tax payer could not get a loan or deposit by account payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty. In the instant case, the Commissioner of Income-tax (Appeals) and the Appellate Tribunal found on the facts that the transactions were genuine and the identity of the lenders was also satisfied. The Appellate Tribunal also upheld the order of the Commissioner of Income-tax (Appeals) that there was no intention on the part of the assessee to evade the tax. Once the said finding as to the genuineness of the transactions is arrived at by the Tribunal on the facts, following the decision of this court in CIT v. Ratna Agencies [2006] 284 ITR 609, wherein it was held that the finding recorded by the Tribunal in this regard is a finding of fact and no question of law much less a substantial question of law would arise, we do not have any hesitation to hold that it may not be proper for this court to interfere with such a finding of fact." 8. Further, almost identical situation came up for consideration before the Madras High Court ....
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.... The Tribunal further held that the transaction of receiving the amount of Rs. 20,99,393 is between the father-in-law and the 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 the 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 disputed. He also submitted that the Tribunal was not right in reappreciating the factual findings recorded by the Assessing Officer and the Commissioner of Income-tax (Appeals) thatthe cash taken by the assessee from her father-in-law was only a loan transaction. 6. Per contra, learned counsel appearing for the assessee submitted that as evident from the stand of the ....
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.... loan or other transaction, still the other provision, namely, section 273B of the Income-tax Act, comes to the rescueof the assessee, if she able to show reasonable cause for avoiding penalty under section 271D of the Income-tax Act. The Tribunal has rightly found that the transaction between the daughter-in-law and the father-in-law is a reasonable transaction and a genuine one owing to the urgent necessity of money to be paid to the seller. We find that this would amount to reasonable cause shown by the assessee to avoid penalty under section 271D of the Income-tax Act. 11. Referring to the decision CIT v. Kundrathur Finance and Chit Co. reported in [2006] 283 ITR 329 (Mad), this court in the decision CIT v. Lakshmi Trust Co. reported in [2008] 303 ITR 99 (Mad), held as follows (page 101) : "In the instant case, the Commissioner of Income-tax (Appeals) and the Appellate Tribunal found on the facts that the transactions were genuine and the identity of the lenders was also satisfied. The Appellate Tribunal also upheld the order of the Commissioner of Income-tax (Appeals) that there was no intention on the part of the assessee to evade the tax. Once the ....