TaxTMI 
TaxTMI 
2018 (8) TMI 1635
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....m customers. Therefore, the case of the assessee is not covered u/s.269T of the Act and hence, the assessee is liable for penalty u/s.271E of the Act. 6. On the other hand, ld D.R. relied on the orders of lower authorities. 7. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. The Assessing Officer levied penalty u/s.271E of the Act for repayment of advance by the assessee in cash of Rs. 21,49,943/-. 8. On appeal, the CIT(A) confirmed the same. 9. Ld A.R. contended that provisions of section 269T is applicable in a case where the assessee repaid the advance received from the customers. 10. Ld D.R. supported the orders of lower authorities. 11. We find that the Assessing Officer has observed as under: "The assessment u/s. 143(3) was made in the case of the assessee on 15.04.2010. The assessee is carrying on the business of transportation fit logistic services. The Assessing Officer has assessed the total income of Rs. 88,000/- as against the returned income of Rs. 57,7.62/-. The Assessing Officer has called for various details from the assessee in respect of gross receipt of the assessee. During ....
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....y erred in holding that advances against the booking of shops and offices is not deposit within the meaning of section 269SS and 269T of the Income Tax Act, against the decision of Allahabad High Court 303 ITR 9 in the case of Chaubey Overseas Corp. and thereby deleting the penalty of Rs. 15,92,940/­ under section 271E of the Income Tax Act? 2. Having heard the learned counsel for the parties and having perused the decisions on record and in particular that of the tribunal, we notice that the respondent assessee is engaged in the business of construction activity. During the previous year relevant to assessment year 2006­2007, the assessee had paid a sum of Rs. 13,91,330/­ to 25 different parties. Such amounts were in excess of Rs. 20,000/­ at a time and were not made through cheques. Assessing Officer therefore, believed that the payments were hit by section 269T of the Income Tax Act, 1961 and resultantly, the assessee was liable to penalty under section 271E of the Act. 3. The case of the assessee was that such amounts were received from the said 25 parties for booking of the shop/office/flat which they later on cancelled. Such amounts therefore....
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....cation at all." 11. The term loan or deposit as per explanation to section 269T means any loan or deposit of money which is repayable after notice or repayable after a period. In the case of the assessee the advance money/earnest money was not accepted with any pre­conditions of repayment on or after an interval of time. CIT(A) has given a finding that considering the nature of repayment the amount returned does not fall under the narration of loan or deposit. Further he has also given a finding that the advance money received from the customers has not been converted into loan or deposit. He has further observed that in some cases the assessee had accepted the advance money in cash in excess of Rs. 20,000/­ which was in the knowledge of A.O. but AO had applied the provisions of sec.271D of the Act. He has further held that there is no ban in the Act against accepting cash for sale of an immoveable asset. In the present case, the advance is for purchase of shop/premises which is accepted asset. CIT(A) has further observed that AO had not commented on the detailed submissions filed before him during the course of penalty proceedings and without appreciating the full....
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....ayment/repayment by a crossed cheque or Bank Draft evidences the payment itself. It is easy to establish if payment/repayment is made through a Bank Draft or by crossed account payee cheque. 40. We do not find so. We have carefully perused the order of the CIT (A) which was in favour of the assessee. The said order of CIT (A) does not discuss ingredients of Section 269 T and it proceeds on the assumption that the additions made under Section 68 of the Income Tax Act having been set aside, no case of penalty has been made out as it was a trade advance. 41. The applicability of Section 269T is not dependent on facts as to whether the transaction is genuine or of doubtful character. Even the genuine deposits are also covered under Section 269T. The source of deposit, capacity of the depositors etc. are wholly irrelevant so far as the applicability of Section 269T is concerned. No evidence could be referred or pointed out which has been omitted to be considered by the Tribunal in holding that the said deposit is not a trade advance. The finding of the Tribunal holding that the deposit in question is not a trade deposit is basically a finding of fact and was rightly ar....
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....t ltd.(supra), this Court had taken such a view also. 11. Even independently section 273B of the Act provides that notwithstanding anything contained in section 271E, no penalty shall be imposable on the person or the assessee as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. It was in this background that in somewhat similar circumstances, Madras High Court in case of Commissioner of Income­tax v. Rugmini Ram Ragav Spinners P. Ltd. reported in (2008) 304 ITR 417(Mad) upheld the tribunal's decision of deleting the penalty making the following observations : "7. Hence, the factual finding by the authorities below is that the amount received is not a deposit or loan, but it is only share application money, and the same is based on valid materials and evidence. The relevant provisions of law are sections 269T, 271D, 271E and 273B of the Act. In the present case, the Assessing Officer levied penalty under section 271E deals with "penalty for failure to comply with the provisions of section 269T". Section 271E, as on the relevant period, reads as follows: "271E....