2023 (10) TMI 31

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....y stated, the facts of the case are that the AO found the assessee to have indulged in receipt of loans/deposits through modes other than banking channels as reflected in Sl.No.31(1) of Form 3CD, being, the Tax Audit Report of the assessee. On being called upon to explain as to why penalty u/s. 271D should not be imposed for violating the provisions of section 269SS, the assessee tendered explanation, which has been reproduced in the penalty order. Thereafter, the AO observed that the assessee accepted loan or deposit amounting to Rs. 53,41,224/- from Mr. Deepak Sanghavi and Rs. 8,21,370/- from Ms. Ritu Sanghavi in violation of the provisions of section 269SS. The assessee's explanation was rejected and the penalty was imposed. The ld. CIT(....

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....n by an account payee cheque or bank draft etc. provided under section 269SS of the Act. With this understanding of the legal position, we proceed to examine the factual matrix of the case. 5. The first amount is Rs. 8,21,370/- stated to have been taken by the assessee from Ms. Ritu Sanghavi, on which an equal amount of penalty was imposed and confirmed. Copy of account of Ms. Ritu Sanghavi is available on record. The first three items during the year are not relevant. Fourth item dated 30-09-2015, which has been debited by the assessee, is a sum of Rs. 8.00 lakh with the narration that it was the amount of self-assessment tax paid on behalf of Mrs. Ritu Deepak Sanghavi. The next item is dated 31-10-2015 which is again payment of self-as....

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....4       53,41,224 7. On an examination of the account of Mr. Deepak Sanghavi in the books of the assessee with reference to the above tabulation, it can be seen that the first amount of Rs. 13,51,507/- is debited to his account. The assessee paid this amount on his behalf and debited his account. Similar is the position regarding the second and third amounts of Rs. 4,09,625/- and Rs. 10,52,682/-, which have been debited to the account of Mr. Deepak Sanghavi. These amounts are in the nature of payments made by the assessee on behalf of Mr. Deepak Sanghavi. Thus, the provisions of section 269SS are not attracted, which apply only on taking or accepting loan and deposit. The next amount is Rs. 6,25,500/- dated 30-....