TaxTMI 
TaxTMI 
2020 (1) TMI 818
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....,00,000.00 3 04-09-2013 1,50,000.00 4 15-09-2013 5,00,000.00 Total 12,50,00,00.00 Accordingly, the JCIT, Vijayapur, initiated penalty proceedings u/s 271D and 271E of the IT Act, 1961 respectively for accepting and for repaying the above said amount by way of cash in violation of the provisions of section 269SS & 269T of the Act, 1961 respectively. The assessee submitted before the ld. JCIT that she has received the above said amounts as giftf from her husband in his individual as well as HUF capacity and the same was credited in her capital account. Thereafter, gift was given by her to her husband and the HUF. The assessee submitted that these gifts are genuine transactions and no evasion of tax is involved. Accordingly, the assessee pleaded that the penalty proceedings may be dropped. The Ld. JCIT, however, took the view that the assessee is claiming the receipt and payment of money as gift in order to escape from the provisions of sec. 269SS and sec.269T of the IT Act, 1961. Further, he took the view that the impugned transactions are only loan transactions entered under the garb of gift transactions. The Ld JCIT, further noticed that the ....
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....S/269T of the IT Act, 1961, the Ld JCIT has levied penalty u/s 271D/271E of the IT Act, 1961. We noticed that the ld.CI(A) has deleted the penalty levied u/s 271D of the Act, 1961, but confirmed the penalty levied u/s 271E of the Act. It is the case of the assessee that, even if it is considered as loan transactions, the penalty is not leviable, since the loan transactions between close relatives are considered to constitute reasonable cause in terms of sec.273B of the Act. 7. In the instant case, there is no dispute between parties that the assessee has received loan from her husband and re-paid the loan to him. The assessee has placed reliance on the decision rendered by the Co-Ordinate Bench of this Tribunal in the case of Smt. Deepika vs. ACIT in ITA No.561/Bang/2017 dated 13.10.2017, wherein the Tribunal has held that the loan transactions between the close relatives would not attribute penalty u/s 271D of the Act, 1961. For the sake of convenience, we extract below the relevant observations made by the Co-Ordinate Bench in the aforesaid case. "7. We have considered the rival submissions. The facts as decided by ITAT Kolkata in the case of Dr.B.G.Panda were that lo....
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.... was involved and there was no promise to return the amount with or without interest. It was clear that the money given by the wife was a joint venture of the family. Taking into consideration overall facts and circumstances of the case, it could be said that the aforesaid piece of legislation was not applicable in the instant case. By taking the liberal view and applying the golden rule of interpretation, the assessee had a reasonable cause within the meaning of section 27 3B. Therefore. the penalty should be deleted. 8. In the case of ACIT Vs. Vardaan Fashion (2015) 60 Taxmann.com 407 (Delhi-Trib.) it was held that where the Assessee intended to purchase a property jointly for which assessee's wife had advanced a sum of money to assessee and when deal for purchase of such house property did not materialize, assessee refunded said amount through cheque to his wife. On the question whether acceptance of cash by husband from his wife would amount to taking of loan or advance in strict sense of section 269SS , the tribunal held that it cannot be construed as loan attracting provisions of Sec.269SS of the Act and therefore no penalty under section 271D could be l....
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....was cancelled." 10. The ratio of the above decision of the Income-tax Appellate Tribunal, Amritsar Bench, would be squarely applicable to the facts of the assessee's case. Here also, the daughter and member of the HUF have given money for certain specific purpose. The source and genuineness of the loan has been accepted by the AO. The cash loans in question therefore cannot be said fall within the mischief of Sec.269SS of the Act as near relatives cannot be said to be "Other person" within the meaning of Sec.269SS of the Act. In any event in the circumstances of the case, there was reasonable cause for accepting loans in cash. 11. In the case of CIT v. Sunil Kumar Goel [2009] 315 ITR 163/183 Taxman 53 , the Hon'ble Punjab and Haryana High Court held as under : "A family transaction, between two independent assessees, based on an act of casualness, especially in a case where the disclosure thereof was contained in the compilation of accounts, and which had no tax effect, established 'reasonable cause' under section 273B of the Act. Since the assessee had satisfactorily established 'reasonable cause' under section 273B of the Act, he....