TaxTMI 
TaxTMI 
2009 (9) TMI 1005
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....d the provisions of section 268SS of the Act. 2. The ld. CIT(A) failed to appreciate the fact that the assessee could not justify the contravention of the provisions of section 269SS." 2. Facts, in brief, as per relevant orders are that during the course of assessment proceedings for the AY 2005-06, the Assessing Officer[AO in short] noticed that the assessee accepted following amount of loans in cash in contravention of provisions of sec. 269SS of the Income-tax Act,1961[hereinafter referred to as the 'Act']:- Sr.No. Name Amount(Rs) Amount (Rs.) 1. R.D. Shah (HUF) 20,000 10,000 19,000 15,000 2. R.D.Shah (Ind.) 25,000 33,000 Chq. No.822719, SBI, Dandiabazar for Sales Tax dt. 2/12/2004 3,900 Chq. No.822722 SBI, Dandiabazar....
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....CIT imposed a penalty of ₹ 7,47,408 u/s.271D of the Act . 3. On appeal, while reiterating their submissions before the Addl. CIT and relying on the decisions in the case of Kalakrithi v. ITO (2002) 253 ITR 754 (Mad.), ADI(Investigation) Vs. Kum. A.B.Shanti, Dy. CIT v. Vignesh Flat Housing Promoters (2007) 105 ITD 359 (Chennai); Shreenath Builders v. Dy. CIT (2000) 111 Taxman 142 (Mag.); Asstt. CIT v. Alfa Hydromec (P) Ltd. (2006) 99 TTJ (Jodh.) 405; CIT v. Natvaralal Purshottamdas Parekh (2008) 219 CTR 509 (Guj) and CIT v. Lokhpat Film Exchange (cinema), the assessee contended that there was a reasonable cause for accepting the money from family members and these being not in the nature of loans or deposit, penalty u/s.271D of the Ac....
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....s. Maheshwari Nirman Udhyog,302 ITR 201 (Raj),Hindustan Steel Ltd. Vs. State of Orissa, 83 ITR 26 (SC) Addl. CIT Vs. I.M.Patel & Co.,107 ITR 214(Guj) (Guj),Vir Sales Corporation Vs.ACIT, 50 TTJ 130[Ahmedabad]. 5. We have heard rival submissions and gone through the facts of the case as also the decisions relied upon. Before proceeding further, we may have a look at the relevant provisions of sec. 269SS of the Act, which read as under: " No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,- (a) the amount of such loan or deposit or the aggregate amo....
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....repayment, rate of interest, manner of repayment, etc. so as to treat the said transactions as loan or deposit. Revenue have not placed before us any material, rebutting the findings of facts recorded by the ld. CIT(A). Since there is nothing on record to suggest that the transactions are in the nature of loan or deposit, apparently, the provisions of section 269SS are not attracted. The meaning of "deposit " and " loan " has been explained on page 8454 of the Chaturvedi and Pithisaria's Income-tax Law. Fifth Edition, Volume 5, as under: " 'Deposit' and 'loan'- these two are not identical in meaning. - It is true that both in the case of a loan and in the case of a deposit there is a relationshi....
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....t always considered identical. " In the light of aforesaid distinction between loan and deposit, especially when there is nothing to suggest in the case under consideration the aforesaid transactions are in the nature of loan or deposit, we are of the opinion that provisions of sec. 269SS are not attracted in this case. 5.2 There is another aspect of the matter. In the case of Bombay Conductors & Electricals Ltd. Vs. DCIT,56 TTJ 580(Ahd.), the Tribunal found that there was no evidence on record to show that infraction of the provisions was with the knowledge or in defiance of the provisions. It has further been held that there is nothing on record to indicate that the assessee had indulged in any tax planning or tax evasion and that....
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....ith the genuineness of transactions would constitute reasonable cause within the meaning of provisions of sec. 273B of the Act It was held that a family transaction between two independent assessees based on an act of casualness, specially when disclosure is contained in the accounts would establish reasonable cause within the meaning of provisions of sec. 273B of the Act. Coming to the facts of the case under consideration, we notice that no loss of revenue has occurred in this case and the genuineness of the transaction has not been doubted. The Hon'ble Apex court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 had long ago settled the law that penalty is not to be ordinarily imposed unless the party either acted deliberately ....