TaxTMI 
TaxTMI 
2020 (5) TMI 300
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....action were not doubted as the assessee is also agriculturist. The All these persons were agriculturists and that the genuineness of the transactions at no point of time had been doubted by the revenue. They lived in Village(remote) areas. 4. That the Hon'ble Ld CIT(A) had erred on facts and circumstances of the case and in law in making an addition on account of penalty u/s 271 D of Rs. 12,00,000.00, being wholly based on conjecture and surmises and being untrue, the same must be deleted. Because The requirement of section 273B is for the assessee to prove that there was a reasonable cause for its having failed to abide by the provisions of section 269SS. As emerges from the record, not only the substantiating evidence like both are agriculturist but, also additionally, transactions were reflected in the accounts of assessee and the advancement of loan to the assessee had been reflected in the books of account of those persons from whom the loan had been received. The identity of those persons has also been well established. The assessee also had given satisfactory reason for taking such loan. His bona fide belief that such transactions would not attract provision of sect....
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....nd that there was reasonable cause for accepting cash loans because the assessee has taken cash loan from his own relatives and the transaction of loan is genuine. The Assessing Officer further observed that the assessee was unable to explain any reasonable cause for accepting the deposits in the form of cash. The Assessing officer also observed that the assessee has not brought on record that the persons from whom loan has been taken is not maintaining any bank account. Thus, the Assessing Officer held that provisions of Section 269SS are attracted in the instant case since no explanation or reasons were furnished for non-compliance of the statutory provisions of Section 269SS of the Income Tax Act, 1961 and imposed penalty of Rs. 12,00,000/- u/s 271D of the Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the genuineness of the transaction is not disputed. Both the transaction was made between the farmers. The Ld. AR submitted that the ssessee is a resident of village Barola, Noida and is presently residing at A-173, 2nd Floor, Sector-47, Noida. He is a....
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....e the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act. Since the creditor had given the loan from their agricultural income and the borrower was also engaged in agricultural activity (photographer job was temporary, he was amateur and having marginal income), the provisions of section 269SS are not attracted. The Ld. AR further submitted that the assessee had entered into genuine transactions of taking loan from his relatives. Section 269SS was introduced by the Finance Act 1984 with effect from 01.04.1984. Object and purpose of introducing this provision is explained by Circular No.387 dated 06 Jul 1984. Para 32.1 of the said circular states that: "unaccounted cash found in the course of searches carried out by the income tax department is often explained by taxpayers as representing loans taken from or deposits made by various persons. Unaccounted income is also brought into the books of accounts in the form of such loans and deposits, and tax-payers are also ab....
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....ty is not automatically exigible, since it could be saved notwithstanding violation of section 269SS, if there is a reasonable cause. The Ld. AR relied upon the following decisions: i. CIT vs. Bhagwati Prasad Bajoria, HUF (2003) 263 ITR 487 (Gau) ii. CIT vs. T R Rengarajan (2005) 279 ITR 587 (Mad) iii. CIT vs. Kundrathur Finance & Chit Co. (2006) 283 ITR 329 (Mad.) iv. Ashwani Kumar vs. ITO (2009) 309 ITR (AT) 69 (Del). v. Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) vi. CIT vs. Natwar Lal Purshottam Das Parekh (2008) 303 ITR 5 (Guj) vii. CIT vs. Smt M. Yashodha (2013) 351 ITR 265 (Mad) viii. Shivnandan Kaushik vs. DCIT (2002) 74 TTJ Chd 761 ix. Shri Jagmohan Sharma vs. JCIT (ITA No. 552 & 553/Kol/2015 order dated 10.01.2018) x. Dr. Deepak Muchala vs. ITO (1997) 58 TTJ (Bom-Tri) 524 xi. Mohan Karkare vs. DCIT (1995) 52 ITD 236 xii. Shri Bhupinder Singh vs. JCIT (ITA No. 926/Chd/2012 order dated 11.03.2014) xiii. Sonia Malik vs. JCIT (ITA No. 7792/Del/2018 order dated 10.05.2019) 6. The Ld. DR relied upon the assessment order and the order of the ....