TaxTMI 
TaxTMI 
2019 (8) TMI 240
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....and brevity. At the first instance I will deal with the appeal in ITA No. 70/Chd/2019 wherein following grounds have been raised : 1. That the Ld. CIT(A) has erred in confirming the penalty of Rs. 8,50,000/- u/s 271-D of the Income Tax Act, 1961. 2. That the Ld. CIT(A) has also erred in considering the fact that the cash transaction as made by the assessee is so called loan taken from the M/s Kundan Lal & Sons, (Commission Agent). 3. That the Ld. CIT(A) has erred in not considering the submissions of the assessee. 4. That the penalty as confirmed by the CIT(A) is against the facts and circumstances of the case. 5. That the Appellant craves leave to add or amend the grounds of appeal before the ap....
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....gent namely M/s Kundan Lal & Sons and in order to settle the account, balance amount of Rs. 7,47,646/- was paid back, the Assessee also furnished the account statement from the Commission Agent. The reliance was placed on the following case laws: * CIT Vs. Maheshwari Nirman Udyog (2008) 302 ITR 201 (Raj) * CIT Vs. Idhayam Publications Ltd. (2006) 285 ITR 221 (Mad) 5. The A.O. however did not find merit in the submissions of the assessee and levied the penalty of Rs. 8,50,000/- under section 271D of the Act. 6. Being aggrieved the assessee carried the matter to the Ld. CIT(A) and furnished the written submissions which read as under: "In this case the assessee filed his return electronically declaring an inco....
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.... and 11.05.2013 and returned the balance on 15.06.2013. In this case the assessee returned the money in less than one month's time period. So. it is just a normal business transaction between an agriculturist and a commission agent and not an unsecured loan. According to basic principles of accounting definition of business is - it refers to activities and events that affect the financial position of a business and are capable of being assigned monetary values and an unsecured loan is a loan that is issued and supported only by the borrower's creditworthiness, rather than by any type of collateral. So, from this we can derive that in this transaction between agriculturist and commission agent there is financial activity which makes ....
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....ngh, Sh. Ajaib Singh and Sh. Gurbhag Sing have given land of 20 Acre to the appellant for cultivation on rent amounting to Rs. 22,000/- per annum for five years and one year rent about Rs. 2,64,000/- has been received in advance. No such evidence has been submitted. The absence of appellant's name in the "Girdawri" and any further corroborating evidence clearly establishes that explanation of the appellant is an afterthought. Further, explanation of the appellant that he has sold agricultural produce worth Rs. 1,02,354/-on 20.04.2013 to M/s Kundan Lal & Sons, Commission Agent and further promised to sell the whole produce to them and took Rs. 8,50,000/- advance in cash, but, due to natural calamity he could not get the enough produce an....
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....therefore the provisions of Section 269SS were not applicable, since it was neither loan nor a deposit taken by the assessee. It was further submitted that the A.O. himself accepted that the assessee was an agriculturist and accepted the returned income shown by the assessee therefore the penalty was not leviable under section 271D of the Act. The reliance was placed on the following case laws: * CIT Vs. Manohar Lal Thakral 93 taxmann.com 156 (P&H) * Baldev Singh Vs. Addl. CIT 93 taxmann.com 212 (CHD Trib) * ITO Vs. M/s Shiv Enterprise in ITA No. 2911/Ahd/2009 (AHD-Trib) * CIT Vs. Hissaria Bros (2007) 291 ITR 0244 (Raj) * ITO Vs. Bharadiya Trading Co. (2003) 85 ITD 0042 (PUNE Trib) * ITO....
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....cts it is clear that assessee is an agriculturist selling his crop through M/s Kundan Lal & Sons, Panchkula and he was receiving the amount against the crops from the said Commission Agent, therefore it cannot be said that the assessee received or paid amounts in cash as a deposit or loan rather the amounts received in cash were against the agriculture crops, therefore the provisions of Section 269SS and 269T of the Act were not applicable to the facts of the assessee's case. On a similar issue the Hon'ble Rajasthan High Court in the case of CIT Vs. Hissaria Bros (2007) 291 ITR 0244 held as under: " that the assessing authorities were bound by the general instructions contained in the circular issued by the Board in respect of ....