TaxTMI 
TaxTMI 
2016 (3) TMI 1381
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.... 133A of the Act was conducted on 08.09.2011 in the case of Shri A. Kannan, Prop. Vadamalayan Finance, No. C-4, II Floor, Thiyagaraja Apartment, First Main Road, Thanthai Periyar Nagar, Pondicherry 605 005. Books of account and supporting documents were impounded under section 133A(3) of the Act during the course of survey. The finance operates from the residence of Shri A. Kannan from the above address. The survey revealed the following facts. Shri A. Kannan himself writes the books of account for the finance. His Finance is not licensed by the state government authorities for financing activities. He lends money on pro-notes and returns the same on repayment. He takes the interest portion on loan on the day of lending and collects the balance in 10 monthly instalments. This period of collection may be delayed by loan debtors. The details of loan debtors are entered in the Party Register called by name "Kisthi Vasool List Book". This book has been maintained as a single book for the period 13.12.1986 to 22.06.2011 and contains the full history of financing of 24 years. The principal amount borrowed is entered in the respective year and month. The repayments are entered against eac....
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....rs 2007-08, 2008-09, 2009-10 and Rs..6,00,000/- for the assessment year 2010-11. Penalty under section 271D of the Act towards receipt of loan in cash to the extent of Rs..50,00,000/- was levied for the assessment year 2012-13. 5. On appeal, after considering the submissions of the assessee and by following the decision of the Coordinate Bench of the Tribunal in ITA Nos. 1905, 1906, 1907 & 1908(Mds)/2013 and others dated 31.10.2013, the ld. CIT(A) directed the Assessing Officer to delete the penalty levied under section 271E as well as 271D of the Act. 6. Aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has relied on the decision of the Tribunal in the case of Shri P. Muthukaruppan v. ACIT in I.T.A. Nos. 220 to 228/Mds/2014 dated 29.05.2014 as well as decision of the Jurisdictional High Court in the case of P. Muthukaruppan v. JCIT [2015] 375 ITR 243 and prayed that the order of the ld. CIT(A) should be reversed. 7. On the other hand, the ld. Counsel for the assessee has submitted that the issue involved in this appeal is covered in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in I.T.A Nos.1905 to 1908/Mds/2013 and other....
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....6 (1 of 1956); (e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette: Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation:- For the purposes of this section,- (i) 'banking company' means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act; (ii) 'co-operative bank' shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; (iii) 'loan or deposit' means loan or deposit of money. 269T. Mode of repayment of certain loans or deposits. No branch of a banking company or a co-operative bank and no other company....
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....in excess of the amount prescribed thereunder. The statement of the financier produced by the counsel for the Department and also relied upon by the appellant would be a case of money-lending business by the financier repeatedly indulging in violation of the provisions of sections 269SS and 269T of the Act. It is one thing to say that there was a compulsion on the part of the financier. Nevertheless, factually we find that the assessee has been taking loan and paying it in cash in total violation of the said provisions. The test in so far as non-levy of penalty under sections 271D and 271 E is established by the Department. For invoking section 273B the appellant has to establish a reasonable cause and satisfy the requirement therein. In the instant case, the assessing authority, the appellate authority as well as the Tribunal found that there is no reasonable cause. In any event, by record there is no explanation offered at the first instance by the assessee. It was argued before the Commissioner of Income-tax (Appeals) that there were some reasons for not complying with the requirement of law. It was found that the conduct of the assessee was in breach of the said provisions on m....
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....justification to claim the benefit of section 273B of the Act. 11. In the present case, as mentioned above, the appellant has been charged for violation of the provisions of section 269SS and section 269T of the Act on the ground that when a survey was conducted under section 133A in the business premises of Mr. A. Kannan, proprietor of Vadamalayan Finance on October 8, 2011, it was found that Mr. A. Kannan was doing money-lending business, who chose to give loans to only selected group of persons after deducting interest for ten months; that the whole transaction was done in cash only, namely, no cheque or draft came into play; that the appellant was also found as one of the borrowers, as he received cash loan of Rs. 15 lakhs on June 21, 2007, and the same was found to be repaid in cash for the assessment year 2008-09. For the assessment year 2009-10, the appellant received Rs. 20 lakhs on April 23, 2008 and he repaid the same in cash. In the same assessment year on March 7, 2009, he had received another sum of Rs. 20 lakhs but there is no proof of repayment. For the assessment year 2010-11, on January 9, 2010, he received cash loan of Rs. 20 lakhs and he had repaid the s....
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....12. When the said Mr. V. Jayachander, chartered accountant appeared on May 11, 2012, thereafter, sadly, no one appeared. That apart, the assessee had not even filed any reply nor even the particulars called for vide order-sheet entry dated May 11, 2012, and letter dated May 2, 2012. In the above background, taking into account the conduct of the assessee, the assessing authority, after giving repeated reasonable opportunities, finding no explanation whatsoever, was unable to exercise his discretion under section 273B and, accordingly, imposed the penalty under sections 271D and 271E of the Act. This finding has been affirmed by both the appellate authority and the Tribunal. When the finding of facts have been reached by all the authorities below, taking note of the conduct of the appellant, who was given sufficient opportunities by the assessing authority, we are unable to accept the prayer for remanding the matter to any of the authorities below. We are also not inclined to accept the subsequent explanation. 12. One another argument of Mr. S. Sridhar, learned counsel for the appellant, placing reliance on the judgment of this court in the case of Balaji Traders (supra), w....