2013 (6) TMI 858

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.... dated 26.11.2010 pertaining to the assessment year 2005-06 have been deleted. 2. In both the appeals, the grievance of the Revenue is that the CIT(A) was in deleting the penalties levied under Sections 271D and 271E of the Act. 3. First, we take up the appeal of the Revenue pertaining to the levy of penalty under Section 271D of the Act vide ITA No.201/PN/2012. In brief, the facts are that assessee is an individual engaged in the business of trading in fertilizers and in the activity of agriculture. A search action under Section 132 of the Act was carried out in the case of Rudranee Group on 02.02.2006 and as a consequence a survey action under Section 133A of the Act was conducted on 02.02.2006 at the business-cum-residential premises o....

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.... Act and therefore penalty under Section 271E was also exigible. 4. The ACIT levied penalties under Sections 271D and 271E of the Act of ₹ 10,00,000/- each. Before the CIT(A), assessee referred to his statement recorded on 07.12.2007 by the then ACIT, Central Circle, Aurangabad in the presence of Shri K.N. Mutha. Assessee submitted that in the said statement he had denied receipt of any loan from Shri K.N. Mutha and the said Shri K.N. Mutha did not contradict the reply given by the assessee. Assessee pointed out that he had filed an affidavit with the Assessing Officer in the proceedings of Shri K. N. Mutha confirming that he had not received any loan from him. It was also pointed out that the cheque dated 11.03.2005 impounded from t....

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....eceived the corresponding amount of loan in cash and in the absence of cheuqe encashment, it was also to be presumed that the loan has been repaid in cash, which is in violation of Sections 269SS and 271E of the Act thereby levying penalties under Sections 271D and 271E respectively was justified. 7. On the other hand, learned counsel for the assessee has relied upon the findings of the CIT(A), which according to him have not been controverted by the Revenue, in support of the case of the assessee. 8. We have carefully considered the rival submissions. Section 269SS of the Act prescribes that no person shall take or accept from any other person any loan or deposit otherwise than by an account payee cheuqe or an account payee bank draft if....

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....at the said cheque dated 11.03.2005, though signed by him, was blank and was certainly not in favour of Shri K.N. Mutha. It is also notable that no hundi or any other promissory notes evidencing giving of loan by Shri K.N. Mutha to assessee has been found by the Revenue. Notably, assessee canvassed that his denial of having received the alleged loan from Shri K.N. Mutha was in his presence and the same was not contradicted by Shir K.N. Mutha. 10. All the aforesaid points, brought out by the assessee and accepted by the CIT(A), have not been proved false by the Revenue at any stage. Therefore, in our view, the CIT(A) made no mistake in holding that the Revenue has not established beyond doubt that assessee had in-fact received any loan of &....