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TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 1254
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....h Jan. 2014 wherein the High Court in paras 5 & 6 has observed as under: "5. Reading of section 40(a)(ia) along with 2nd proviso and sec. 201(1) along with proviso, it would mean that the mandate or requirement on the part of the payer to deduct tax at source is not so strict if they are able to show that the payee or the recipient of the amount has paid tax in accordance with the provisions of section 201(1) and the proviso. 6. This was not the claim made by the assessee before the Assessing officer. The claim was on a different stand, initially reflecting the amounts as loan in the account books though shown as freight charges in the returns and later explained that it was not the loan amount but freight charges. It was never the case of the assessee that there was no mandate subsequent to amendment, to deduct tax as TDS in the light of above provisions. The assessment year in question is 2007-08 and the amendment giving breathing space to payer of amounts is with effect from 1.4.2013. Therefore, the said benefit is not applicable to the assessee. Even otherwise, on factual situation, the very fact that these amounts were claimed as long initially, till the security came up ....
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.... Shri Pradeep Kumar and one Shri Sainudeen and none of these cheques were account payee cheques. It was also observed by the Assessing officer that since the amount received from Shri K.A. Thomas was shown as loan in the books of account and the said amount was also confirmed by Shri K.A. Thomas as loan given to the assessee firm during the assessment proceedings, the repayments by way of cash cheques was clearly a violation of section 269T of the Act. Shri Mohammed Faizal could only submit before the Assessing officer that Shri K.A. Thomas was his teacher many years ago and he was not aware of his children or any other details pertaining to him. However, according to the Assessing officer, the assessee persisted with its claim that the said amount was not a loan but merely money given on trust meant for resolving of certain family disputes of Shri Thomas. 9. The Assessing officer further observed that though the assessee claimed that the amount was for settling family disputes, but he was not aware of the persons to whom the amount was finally disbursed. Contrary to this, the Assessing officer found that the entire amount was repaid back to Shri K.A. Thomas and hence, the cl....
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....SC). 3) CIT vs. Madhav Enterprises Pvt. Ltd. 2014 (2) TMI 564 (Guj.) 4) CIT vs. Rugmini Ram Raghav Spinners (P) Ltd. (2008) (304 ITR 417) (Mad.) 5) CIT vs. Saini Medical Store (P&H) (2005) 277 ITR 420 )P&H). 6) CIT vs. Eetachi Agencies (2001) 248 ITR 525 (Bom.). 7) CIT vs. Natvarlal Purshottamdas Parekh (2008) 303 ITR 5 (Guj.). 8) Citizen Co-operative Society Ltd. vs. Addl. CIT (2010) 41 DTR (Hyd.) (Trib.) 305. 9) Muslim Urban Co-operative Credit Society Ltd. vs. JCIT (2005) 96 ITD 83 (Pune). 10) Salagaon Sanmitra Sahakari Pathpedhi Ltd. vs. Addl. CIT (2012) 51 SOT 53 (Mum.) (Trib.). 11) ACIT vs. Vinman Finance & Leasing Ltd. (2009) 120 TTJ (Visakha) (TM) 462. 12) ACIT vs. Alfa Hydromec (P) Ltd. (2006) 99 TTJ (Jd.) 405. 13) CIT vs. Shri Waheguru Singh 2008 (12) TMI 33 (P&H). 14) CIT vs. Sunil Kumar Goel (2009) 315 ITR 163 (P&H). 15) CIT vs. Ratna Agencies (2006) 284 ITR 609 (Mad.). 16) Farrukhabad Investment (I) Ltd. vs JCIT (2003) 85 ITD 230 (Del.). 17) ITO vs. VS. Hostel, 2012 (11) TMI 463 (Guj.) 18) CIT vs. Mahabal Shetty, 2011 (9) TMI 189 (Bom.). 14. The Ld. DR drew our attention to the following details of repayments: 1. 03-05-2007 Amount re....
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....t have been defined vide Explanation (iii) of sec. 269T wherein it says that "loan or deposit means any loan or deposit of money which is acceptable after notice or repayable after a period and, in the case of a person other than a company, includes loan or deposit of any nature". The Ld. DR submitted that if the monies given by Shri K.A. Thomas are deposits, the provisions of sec. 269T gives a wide scope of the term "any deposit". The Ld. DR relied on the decision of the Allahabad High Court in the case of Chaubey Overseas Corporation vs. CIT (2008) 303 ITR 9 wherein it has been held that the word "any deposit" given in sec. 269T have been used to corer all sorts of deposits and include trade deposit also. According to the Ld. DR, though the payment was received by the assessee from Shri K.A. Thomas by way of cheques, the repayments have been made by way of bearer cheques. The Ld. DR submitted that in the instant case, two basic requirements which make sec. 269T applicable stands fulfilled and hence, the same is applicable. 16. The Ld. DR submitted that the argument that the assessee did not receive loan or deposit, the assessee had no unaccounted income and there was no evasion....
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.... any of its purposes. It is also on record that the firm had no need of funds as evident from records and it has not availed any loan or accepted any deposit for the last eight years. 17.3 The amount of Rs. 1,69,20,000/- was entrusted with the firm in 3 installments of Rs. 79.20 lakhs, Rs. 54 lakhs and Rs. 36 lakhs each, when the firm had no need of any funds and on the date of receipt of the first instalment of Rs. 79.20 lakhs, it had a cash and bank balance of Rs. 75.04 lakhs. This amount of Rs. 79,20,000/- was received on 03/05/2007 by cheque, which was deposited into the bank and cleared on 4/5/2007 and the amount was deposited with Indian Overseas Bank as fixed deposits on 4/5/2007 itself. This deposit was closed on 26/07/2007 and cheques issued in his favour was cleared from the bank by Shri K.A. Thomas on 27/7/2007. All other amounts were also deposited similarly on the very day of receipt and subsequently withdrawn and handed over to Shri K.A. Thomas and thus, no part of the funds was brought to the main stream of the assessee's business. 17.4 It is to be noted that a businessman usually takes loan or accept deposit for meeting working capital requirements, repayment of d....
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....ther the receipt of money from Shri K.A. Thomas can be characterised as loan or deposit. In our view, it was recived only for temporary custody. Such temporary custody fall outside the purview of section 269T of the I.T. Act. The facts in the present case show that the monies are not used for the purpose of business and it lied idle with the assessee in the form of fixed deposits and thereafter the same was returned to Shri K.A. Thomas. Further, on the date of first instalment of Rs. 79.20 lakhs, the assessee had cash balance and bank balance of Rs. 75.04 lakhs and no part of the borrowed fund was used for the purpose of business. This was only a technical or venial breach of the provisions of the Act. It was held in the case of CIT vs. Madhav Enterprises Ltd. (356 ITR 588) (Guj.) that when it is neither deposit nor loan, provisions of sec. 269T shall have no application. Further, as seen from the chart furnished by the assessee, the assessee has earned meagre income from 2004-05 to 2008-09 ranging from Rs. 1.45 lakhs to Rs. 11.88 lakhs and it cannot be said that knowingly the assessee would expose itself to such huge penalty. If at all there is fault on the part of the assess....