TaxTMI 
TaxTMI 
2018 (6) TMI 1792
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....nd of appeal. (1) On the facts and in the circumstances of the case and in law, learned Commissioner (Appeals) erred in deleting penalty of Rs. 1099595 /-levied under section 271D of the Income tax Act 1961 on the ground that genuineness of the transaction made through journal entries is not in doubt. (2) On the facts and in the circumstances of the case in law, the learned Commissioner (Appeals) having held that assessee had contravened the provision of section 269SS of the Income tax Act 1961, ought to have upheld the levy of penalty under section 271D as the assessee failed to establish the compelling reason or genuine business constraint or reasonable cause for having connection in respect of each and every journa....
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....nue has filed present appeal before this Tribunal. 3. We have heard the learned departmental representative ('DR') for the revenue and learned authorized representative ( 'AR') of the assessee and perused the material available on record. At the outset of hearing the learned AR of the assessee submits that the grounds of appeal raised by revenue is covered in favour of assessee by the decision of Hon'ble jurisdictional High Court in assessee's group cases in CIT Vs Ajinath Hitech builders Private Limited & others in ITA's No. 171, 172, 202, 2.3, 218 and 219 of 2015 dated 06th February 2018 and further by the decision of co-ordinate bench of Tribunal in CIT versus Aasthavinayak Estate Company Ltd ( ITA No. 602/M/ 2017 dated 31 May 2018 an....
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..... Commissioner (Appeals) the assessee urged that the journal entries have been made with the group concern under the bonafide belief that such transaction would not be hit by the provisions of section 269 SS in view of the various judicial decision on this issue, including the decision of Delhi High Court in case of NOIDA Toll Bridge (262 ITR 260) and such loan by way of journal entries transaction were undertaken for various commercial reasons like assigning or receivable for operational efficiency, payment on the group concern for squaring up connection, for ease of consolidation of accounts, rectification entries etc. The learned Commissioner (Appeals) after referring the decision of Bombay High Court in Trump International (supra) ....
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....for accepting loan by way of Journal entries. The Assessing Officer had placed reliance on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Triumph International Finance (I) Ltd. (345 ITR 270) rendered on 12.06.2012. It is not disputed that in this judgment it was held that there was violation of the provisions of S. 269T of the Act in a case where the loan was repaid by way of a journal entry entailing levy of penalty u/s. 271E of the Act. However, at the same time it was also held that levy of penalty could be avoided on showing reasonable cause. In the premises, levy of penalty u/ss. 271D of the Act is not automatic, but the genuineness or otherwise of the reasons due to which repayment was made by journal ....
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....e, the CIT(A) has also followed the decision of Jurisdictional High Court in case of group concern of the case. The facts and circumstances during the year under consideration are same, accordingly, we do not find any infirmity in the order of CIT(A) for deleting the penalty imposed u/s.271D by relying on the decision of Jurisdictional High Court in group case of the assessee. 8. Further, the co-ordinate bench in assessee's group case in DCIT v. National Standard India Ltd. (supra) while referring the decision of Hon'ble jurisdictional High Court in CIT v. Ajitnath Hi-Tech Builders Pvt. Ltd. (supra) held that the journal entries passed prior to 12.06.2012, the date on which Bombay High Court in case of CIT v. Trumph International Fi....