TaxTMI 
TaxTMI 
2023 (11) TMI 698
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.... dated 18/8/2021 for the AY 2017-18. 2. Briefly stated the facts of the case are that the assessee is into the business of manufacturing of detergent products such as detergent powders and soaps. A search and seizure operation u/s. 132 of the Act was conducted on 30/08/2016 in the group case of Sri Arunachalam Manickavel. During the course of assessment proceedings, the Ld. AO noticed the cash deposits of Rs. 1,74,52,500/- during the demonetization period. The assessee claimed that the source of such cash deposits was loan from Sri Arunachalam Manickavel, one of the Directors of the assessee company. The Ld. AO called for confirmation from Sri Arunachalam Manickavel wherein Mr. Arunachalam Manickavel has confirmed that the amount of cash....
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..../s. 271D of the Act and therefore levied a penalty of Rs. 1.74 Crs u/s. 271D of the Act. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A), Visakhapatnam. The Ld. CIT(A) considered that the sources for the deposits have been proved in the case of Sri Arunachalam Manickavel and thereby relying on the decision of the Hon'ble ITAT, Visakhapatnam in the case of Dharmana Products (P) Ltd vs. ACIT, Circle-4(1), Visakhapatnam allowed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us and raised the following grounds of appeal: "1. The order of the Ld. CIT(A) is erroneous in law and the facts and circumstances of the case. 2. The Ld.CIT(A)....
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....n though no bona fide reason exists. 8. Any other ground that may be urged at the time of hearing." 3. Further, we also find that the assessee has filed the Cross Objection by raising the following grounds: "1. The Ld. CIT(A) is justified in finding that the facts as contained in Hon'ble Supreme Court in the case of M/s. Vasan Healthcare Pvt Ltd., are distinguishable with the facts of the present case, since the Director of the company do not have source to give cash loan and further obtained cash loan from financiers who also do not have any sources. 2. The Ld. CIT(A) is justified in holding that when the genuineness of the transaction, creditworthiness of the Director and company are not doubted and held to b....
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....ssue and depending upon the adjudication and outcome of the same, the other grounds may be considered on merits. Accordingly, first we take up the Ground No.6 of the Cross Objection raised by the assessee being a legal issue wherein the assessee contested that the penalty order passed u/s. 271D is invalid since there is no satisfaction written in the assessment order. 5. Before us, the Ld. AR submitted that the Ld. AO in his order u/s. 143(3) of the Act has proposed to levy the penalty u/s. 271AAB and 271AAC of the Act. The Ld. AR further vehemently argued that since the quantum appeal before the Ld. CIT(A) as well as before the Hon'ble ITAT has been held in favour of the assessee, penalty u/s. 271D cannot be levied. The Ld. AR relied on....
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....faction for the purpose of initiating penalty proceedings under the Act. The Hon'ble Supreme Court has held as follows: "As pointed out above, insofar as, fresh assessment order is concerned, there was no satisfaction recorded regarding penalty proceeding under section 271E of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated under section 271(1)(c) of the Act. Thus, insofar as penalty under section 271E is concerned, it was without any satisfaction and therefore no such penalty could be levied." 7. Further, this Bench of the Tribunal in the case of ACIT vs. Kanchumarthi Venkata Sita Ramachandra Rao (supra) has followed the decision of the Hon'ble Supreme Court in the case of CIT vs. J....