2020 (4) TMI 811

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....ct, 1961, ought to have upheld the levy of penalty u/s 271D as the assessee failed to establish the compelling reasons or genuine business constrains or reasonable cause for having transactions in respect of each and every journal entry with its group concern." 2. At the outset of hearing, the ld. Authorized Representative (AR) of the assessee submits that the grounds of appeal raised by the revenue are covered by the decision of Tribunal in assessee's group case in Brightgold Construction Pvt Ltd in ITA No. 2582/Mum/2017. The ld AR for the assessee invited our attention on the order of ld. CIT(A) and would submit that while passing the impugned order, the ld. CIT(A) passed the combined order in case of M/s Vardhvinayak Township Development Pvt. Ltd. (assessee) and Bright Gold Construction Pvt. Ltd. The revenue filed two separate appeals before the Tribunal challenging the order of ld. CIT(A) dated 30.01.2017. In case of Bright Gold Construction Pvt. Ltd., the Tribunal vide its order dated 24.07.2019 in ITA No. 2582/Mum/2017 has affirmed the order of ld. CIT(A). The ld. AR of the assessee, thus, submits that the grounds of appeal raised by assessee are in fact covered in favour a....

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....al before the Tribunal in Brightgold Construction Pvt. Ltd. on similar set of fact and the co-ordinate bench of Tribunal in its order dated 24.07.2019 in ITA No. 2582/Mum/2017 affirmed the order of ld. CIT(A) and dismissed the appeal of the revenue. 7. For appreciation of fact the complete order of co-ordinate bench is extracted below: "This appeal by the Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)]-49, in short CIT(A), in appeal No. CIT(A)-49/IT-185 & 186/2015-16, dated 30.01.2017. The Assessment was framed by the Additional Commissioner of Income Tax, Range-7, Mumbai (in short DCIT/ITO/ AO) for the A.Y. 2012-13 vide order dated 28.09.2015, under section 143(3) of the Income-tax Act, 1961 (hereinafter 'the Act'). The penalty under dispute was levied by Addl. CIT, Central Range-7, Mumbai under section 271D of the Act vide order dated 28.09.2015. 2. The only issue in this appeal in this appeal of Revenue is against the order of CIT(A) deleting the penalty levied by the additional CIT central range, Mumbai under sections 271 D of the Act for accepting in cash loan/ deposit/ transactions made through journal entries in excess of Rs.20,0....

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....decisions in favour of assessee in the following cases: - (i) Hon'ble Delhi High Court in the case of CIT vs. Noida Toll Bridge Co. Ltd. [2003] 262 ITR 260 (Delhi) rendered on 28.01.2003. (ii) Hon'ble Rajasthan High Court in the case of CIT vs. Hissaria Bros. [2007] 291 ITR 244 (Rajasthan) rendered on 21.07.2006. (iii) Order of Co-ordinate Bench of this Tribunal in the case of CIT vs. Triumph International Finance (I) Ltd. in ITA No. 542/Mum/2007, dated 29.01.2008. (iv) Order of Co-ordinate Bench of this Tribunal in the case of Muthoot M. George Bankers vs. ACIT [1993] 46 ITD 10 (Cochin), dated 16.04.1993. Aggrieved, now Revenue is in appeal before Tribunal. 4. We have heard this appeal of Revenue. We have heard the rival contentions and gone through the facts and circumstances of the case. Admittedly, the assessee has accepted loan/ deposits from various sisters concerns through journal entries otherwise then account payee cheque or draft in excess of Rs. 20,000/- in violation of the provisions of section 269SS. 5. We noted that the assessee claimed the journal entries pointed out by the AO and during penalty proceedings by the Addl.CIT, are not loan or depos....

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....th Section 269SS of the Act. (e) Mr. Mohanty's submission that the test laid down in Triumph International Finance (supra) will have no application in the present facts in view of the large number of entries in this case as compared to only one entry in the case before this Court. The test of reasonable cause cannot, in the present facts be determined on the basis of the number of entries. If there was a reasonable cause for making the journal entries, then, the number of entries made, will not make any difference. Besides, on facts, the Tribunal was satisfied with the reasons given by the Assessee for reasonable cause and this finding is not shown to be perverse. Finally, the issue of there being a reasonable cause or not is an issue of fact. No inference of law and / or issue of interpretation is to be made. The decision relied upon by the Revenue in case of Premier Breweries Ltd.(supra) concerned itself with the issue of a claim for deduction under Section 37 of the Act on the basis of the Agreements entered into between the parties. The inference of law in that case was whether on the facts, it could be inferred that the claim for deduction is in respect of expenditure in....