TaxTMI 
TaxTMI 
2019 (3) TMI 1259
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....000 2 S. Manohar 3,50,000 3 M. Anandan 5,00,000 4 K. Padma 12,66,000 5 A.P. Ashok Kumar 43,30,000 6 C. Bama 9,90,000 7 D. Chinnakannu 23,40,000 1,10,26,000 Ld. Assessing Officer was of the opinion that the assessee, but for seeking adjournments, did not give any worthwhile reply as to why it had accepted loans/ advances in cash. Ld. Assessing Officer thereupon took a view that assessee had violated Section 269SS of the Act for a sum of Rs. 1,10,26,000/-. Penalty of like amount was levied u/s.271D of the Act. 3. Assessee's appeal before ld. Commissioner of Income Tax (Appeals) did not meet with any success. Though the ld. Commissioner of Income Tax (Appeals) sought a remand report from the ld. Assessing Officer with regard to the submission made by the assessee before him, as per the ld. CIT(A), ld. Assessing Officer in such remand report stated that assessee despite various notices given to it, did not furnish any explanation for the violation of Section 269SS of the Act. Assessee did state before ld. Commissioner of Income Tax (Appeals) that a sum of Rs. 76,60,000/- out of Rs. 1,10,26,000/- was r....
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.... According to him, assessee had given a detailed reply on 17.12.2014 to the ld. Assessing Officer but this was ignored for no reason. Reliance was also placed on the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Idyayam Publications Ltd, (2006) 285 ITR 221.Thus, according to him, levy of penalty was done merely on presumptions and ought to be deleted. 5. Per contra, ld. Departmental Representative strongly supporting the orders of the lower authorities submitted that even if money received by the assessee were from its customers as advances, still it stood covered u/s.269SS of the Act. As per the ld. Departmental Representative, nature of the payments made by the customers to the assessee were nothing but pure loans and not advances. According to him, it might be true that out of four persons who had loaned money to the assessee, two had acquired flats from it. However, as per the ld. Departmental Representative, this also clearly demonstrated that the other two persons had no intention of buying any property from the assessee and what they had given was only loans. In so far as money received from promoters were concerned, contention of the ld. Department....
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....he Financial Year: 2010 - 11 and no repayment of the above Loans was made during the financial Year : 2010 - 11 . Apart from the above , there were no other unsecurcd Loans or Deposits in the Balance Sheet and the question of applicability of the provisions of Sec.269SS and 269T and Penal provisions of Sec. 271D did not arise in this case (2) Even in the Scrutiny assessment order passed by the Learned Assessing Officer dated 25.03.2014, there was no reference: about acceptance and repayment of deposits by the above Assessee in cash except the additions for unproved expenditure and only the penal proceedings u/s. 271 (1) (c) were initiated and not any other proceedings. (3) Even in the notice u/s.271D sent by your Office dated 10.11.2014, it was only mentioned as hereunder : ''Whereas in the course of proceedings before me for the assessment year 2011-12, it appears to me that you: * Have without * Have concede the particulars of income or furnished inaccurate particulars of such income. Even in the letter cited above, there was no mention about the reasons for which the Penalty Proceedings u/s. 271 D were initiated. I wish to bring to Your kind notice ....
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.... (d) Name: Mr. M. Anandan - Rs. 5.00 lakhs on 08.03,2011. Nature of Business: Labour Contracts in Periamet. PAN : AAQP A 6963 Q I X ( 1 ). Relationship with thc Asseseee: No Business / personal relationship with the Assessee. Both the above have given their Sworn Statements individually in respect of the Advances given by them to the Assessee Company alongwith Xerox copies of Acknowledgements and Annual Accounts for the Year Ended : 31.03,2011 and also the ledger copy of the Assessee in their books respectively during their personal appearance in response to the summons issued to them by the Learned Assessing Officer . . From the above it could be seen that all the above parties had responded to the Summons issued to them without any Avoidance and given the proof alongwith their Income Tax Returns respectively wherein they have declared the advances given by them to the Assessee Company for purchase of Flats and I humbly wish to reiterate that such amounts were only Advances which will be adjusted against the cost of the Flat at the time of handing over to them respectively and not Loans or Deposits to the Company which carry interest . (2) Advances Received from....
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....r authorities, which clearly indicated that sums received from M.R. Jayalakshmi, S. Manohar, M. Anandan and K. Padma were nothing but advances against sale of flat. Section 269SS of the Act was substituted by Finance Act, 2015 w.e.f. 01.06.2015. The said Section as it stood before 01.06.2015 read as under:- ''269SS. Mode of taking or accepting certain loans and deposits - 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 or use of electronic clearing system through a bank account if - (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not) the amount or the aggregate amount remaining unpaid; or (c) the amount of the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b) is ....