TaxTMI 
TaxTMI 
2022 (8) TMI 33
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.... on 10/02/2017 in respect of an alleged violation of section 269SS of the Act for having received Rs.15.50 lacs from one, Sangeeta Rawat, in cash, on 25/8/2009, i.e., during the relevant previous year (f.y. 2009-10). Satisfaction for the same, it is a common ground before us, was recorded by the Assessing Officer (AO) during the course of the assessment proceedings for the relevant year, followed by his moving the competent authority, i.e., Joint Commissioner, with the proposal for the initiation of the penalty proceedings on 12/4/2016, also informing the asseessee (PB pg. 8). This was followed by another notice on 24/07/2017. The assessee responded to both, within the time allowed, stating that he had not received any amount in cash from Sangeeta Rawat (SR), his wife, during the relevant year. The penalty proceedings, therefore, warranted being dropped. Without prejudice, it was explained that SR had sold a shop (No.7, Dutt Tower, Napier Town, Jabalpur), purchased by her on 18/12/2007, to one, Ratna Verma (RV), during the year (date not specified). The sale consideration (not specified) was, however, received from the said buyer by the assessee, her husband. It was this money, bel....
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...., the sale consideration was returned back to the wife. These transactions relate to AY 2010-11 and at that time, there was no restriction on receiving the sale consideration in respect of immoveable property in cash. The bar of accepting the cash above Rs.20,000 was imposed only after 01.06.2015. It was not a deposit. It was money which belonged to the wife of the appellant which was received by appellant on her behalf and was subsequently handed over to her. This was transaction in respect of immovable property and there was no bar in accepting cash in respect of transaction in immovable property. Such restriction came after 01.06.2015. Thus there was no violation of law. 7.1.5 The contention of the appellant as well as penalty order has been considered. The appellant received the money on behalf of his wife. The transactions between appellant and his wife have been recorded in the books of account of the appellant and there was no concealment of the income. The AO has levied the penalty stating that the said transactions cannot be treated in the nature of current account and the payments were made in cash. A plain reading of section 271D gives an impression that if ther....
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....69SS/T. That is, accepts the plea in respect of a penalty u/s. 271E, justifying it on the basis that the bar on the acceptance of cash against the sale of immovable property was effective 01/6/2015. Though he does mention at para 7.1.5 of his order that the assessee received money on behalf of his wife, and which was returned to her in cash, the same is, even as admitted by Shri Usrethe, the ld. counsel for the assessee, not based on any material on record either before him or before the AO. 3.2 We shall proceed by considering the adjudication by the first appellate authority. None of the grounds on which the penalty has been deleted (though stated as 'cancelled'), is, in our view, tenable. The assessee's case is not of the transaction being not non-genuine or of a bona fide belief or non-concealment of income, toward which various decisions stand relied upon by the ld. CIT(A) at para 7.1.6 of his order. Penalty u/s. 271D (or for that matter u/s. 271E) has nothing to do with income and, therefore, concealment or otherwise of income and, further, can only be in respect of admitted or proved transactions. A non-genuine transaction is by definition not a real or actual transaction,....
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....ash from SR on 25/8/2009 (or any other sum in cash during the year), so that the question of breach of sec. 269SS, for which penalty u/s. 271D could be levied, as has been, does not arise. The Revenue's case is that a mere wrong mention of the section (provision of law) would matter little; it being an admitted fact that the assessee has paid Rs. 15.50 in cash to SR on 25/8/2009, and qua which, being in contravention of s. 269T, no explanation has been furnished at any stage, liable for penalty u/s. 271E. The primary facts are not in dispute. We may, however, for the sake of clarity, enclose the copy of the ledger account of SR in the books of account of the assessee, forming in fact part of the assessment order as Annexure A thereto, as Ann. A1 to this order. The same agrees with the copy of the assessee's account in the books of SR (Ann. B), as Ann. A2. As per the same, the credit balance of SR in the accounts of the assessee as on 25/8/2009, the date of cash payment to her, is Rs. 12,17,500. The same is clearly incorrect as it does not include Rs. 8,00,000 admittedly received by the assessee (for and on behalf of SR) on 10/6/2009, which stands though accounted for (by both) o....
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....on (provision of law), as long as the authority has the power in exercise of which the relevant judicial action has been taken, would not defeat the same. This, however, is not the case here. That, for instance, would be the case where the assessee had indeed received cash from or on behalf of his wife, attracting a penalty u/s. 271D, while the authority had, stating the facts constituting the default correctly, mentioned s. 271E instead. 3.5 We next examine the assessee's without prejudice claim, pressed emphatically before us, and on which also the assessee found favour with the ld. CIT(A). On Shri Usrethe being conveyed by the Bench that there is nothing on record to evidence his case, he would make an oral plea for admission of additional evidence. The same, fairly not objected to by the Revenue, was allowed considering that the said plea represents the assessee's consistent stand throughout, and the material sought to be relied upon, i.e., the sale deed dated 26/08/2009, and the assessee's bank statement (for the period 01/3/2008 to 29/10/2009), are both contemporaneous evidences. It was though made clear to Shri Usrethe that inasmuch as there has been no verification of th....
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....f the mode of payment. It is nobody's case that the money accepted and, therefore, returned back (after 75 days), did not belong to the creditor. That is, it is a deposit of money none-the-less, and no less a deposit than if the same was accepted from SR directly. Rather, it is the indirect receipt of money that the relevant provisions in effect seek to proscribe and penalize. That is, by stipulating the condition of 'account payee cheque' or 'account payee bank draft', so that the transfer of funds, admissible u/ss. 269SS/T, is directly from a bank account of one (payer) to the other (payee). A credit to another's account by way of bank transfer only signifies receipt of money from the other. As such, nothing turns on the fact that the money received belongs to SR, with, as afore-said, it being accepted indirectly (i.e., from RV) makes it in contravention of s. 269SS inasmuch as RV, the payer, is a third party as far as the assessee and SR, the debtor and creditor are concerned. RV, by making the payment, is only discharging her contractual obligation to SR under the sale agreement, who receives the same in her own right, though chooses to, for reasons best known to her, direct pa....
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....tands received in the assessee's bank account. It is this that led him to state of there being no bar on the receipt of sale consideration of immovable property in cash. The transaction is not substantiated by the tax return of SR for the relevant year, a practising Advocate with independent source of income, as clarified by Shri Usrethe during hearing. Two, considering that the assessee receives the sale consideration, it may well be the case that the property was purchased by his wife out of monies belonging to the assessee, in which case the money belongs to the assessee himself, in which case the repayment of Rs. 15.50 lacs on 25/08/2009 is only against credits outstanding as on that date (Rs. 12.175 lacs), with the balance being a fresh loan or deposit by him to his wife (Annexures A/B). The entire case is a make-believe and, in the absence of a request by SR (seller) to RV (buyer) to make the payment of the sale consideration to the assessee, her husband, and a confirming statement from the latter (RV), a non-starter. Even so, there is no explanation for the admitted cash payment by the assessee to SR. 4. The assessee has placed on record several decisions, none of which w....