2006 (12) TMI 124

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....t of the court was delivered by P. D. Dinakaran J.—At the instance of the Revenue, the appeal is directed against the order of the Income-tax Appellate Tribunal dated May 29, 2003, in I. T. A. No. 1188/Mds/2001, raising the following substantial questions of law : "1. Whether, on the facts and under the circumstances of the case, the Appellate Tribunal was right in holding that penalty und....

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....he Act. 3. Aggrieved by the order of the Assessing Officer imposing penalty, the assessee filed appeal before the Commissioner of Income-tax (Appeals), who, by order dated April 30, 2001, held that the business of the assessee which was done mostly in Erode required cash purchases which made the assessee to accept loans in cash from sister concerns and that repayments to sister concerns were al....

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....contends that sections 269SS and 269T of the Act are mandatory and no mens rea needs to be proved before penalty is imposed. He further submits that he assessee had no sufficient reasons to take the loans in cash. 6. Per contra, learned counsel appearing for the assessee, referring to two decisions of this court in (i) CIT v. Kundrathur Finance and Chit Co.[2006] 283 ITR 329 and (ii) CIT v. Rat....

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....he Commissioner of Income-tax (Appeals) and the Appellate Tribunal found on the facts that the transactions were genuine and the identity of the lenders was also satisfied. The Appellate Tribunal also upheld the order of the Commissioner of Income-tax (Appeals) that there was no intention on the part of the assessee to evade the tax. 10. Once the said finding as to the genuineness of the transa....