TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 577
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....from the funds flow submitted by Ms Spaze Tower Pvt. Ltd. before the Hon'ble Settlement Commission it is evident that M/s Spaze Tower Pvt. Ltd. had discharged the liabilities of the assessee by making payments in cash which is violation of the provisions of section 269SS of the Act. iii) Whether on the facts and in the circumstances of the case, the Ld. CIT (A)has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that since M/s Spaze Towers Pvt. Ltd. incurred expenditure towards the personal needs of the directors/promoters, the same was acknowledged as liability by them but the same cannot be construed as loan or deposit despite admission of the assessee before the CIT(A) in quantum appellate proceedings that these cash transactions were made between two separate entities on returnable basis as loan/ deposits in violation of the provisions of section 269SS of the Act. iv) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty relying on the order of the Hon'ble ITAT wherein it was held that penalty us 271D is without any satisfaction and therefore, no such penalty can be....
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.....00 crs. (and not undisclosed income or surrender as stated in the rule-9 report by Ld Pr CIT). It is respectfully submitted that the applicant has addressed and considered each and every issue stated in the said letter dt. 11.3.2016 and offered a sum of Rs. 53.04 cr., in the present SOF, which shall be dealt with, in the subsequent paras apart from additional surrender of Rs. 1.65 crs in the hands of Sh Arvinder Dhingra which is also pending for adjudication before the Hon'ble Bench). Therefore, the total amount affirmed before the Hon'ble Settlement Commission pertaining to both the applications comes to Rs. 54.69 cr. The applicant accepted that it had recorded inflated purchases to the tune of Rs. 52.74 crs (app) under the head of construction expenses apart from another surrender of Rs. 30.00 lacs and thereby suppressed the profits by Rs. 53.04 cr (app). The applicant used to pay to the said Vendors towards the inflated purchases in question by account payee cheques and the applicant used to get cash after deducting nominal charges as stated in detail in SOF. Para 2.2.1 to para 2.2.4 Telescoping Of Cash Expenses of Directors/Promoters The Ld Pr CIT has objected to te....
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.... Brands Ltd [supra] held as under: "6. Against the order dated 6-9-2000, the revenue preferred an appeal before the Income Tax Appellate Tribunal. By an order dated 6-10-2004, the Tribunal (in paragraph 9 of the said order) upheld the view taken by the Commissioner (Appeals) in his order dated 69-2000. The Tribunal held that the receipt was outside the scope of undisclosed income defined under section 158B(b) of the Act. 7. On these facts, we are of the view that the revenue could not on the one hand, contend that the amount of 3 lakhs is undisclosed income in the hands of the assessed and at the same time seek to initiate proceedings against the assessed for violation of the provisions of section 269SS of the Act which deals with cash deposits or loans in excess of Rs. 20,000. 8. The revenue, having taken the stand that the income was undisclosed income in the hands of the assessed, it could not resort to proceedings under section 269SS read with section 271D of the Act, as held by the Tribunal." 22. Similar view was taken by the Hon'ble High Court of Delhi in the case of R.P. Singh & Co. [P] Ltd 340 ITR 217 wherein the Hon'ble High Court had the occasion to de....
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....r assessment of the assessee. The block assessment of undisclosed income for the block period was framed by the AO and the amount of Rs. 15 lakhs was added as undisclosed income of the assessee for the financial year 1998-99. Once the amount in question is assessed as the undisclosed income of the assessee in the block assessment for the block period of the assessee, the provision of Section 269SS r/w Section 271D cannot be resorted to. The issue in the present case is covered in favour of the assessee with the decision of Hon ble Delhi High Court in the case of Standard Brands Ltd., cited supra, wherein held that where the amount was undisclosed income in the hands of the assessee, it could not resort to proceedings under Section 269SS r/w Section 271D of the Act. Accordingly, the issue is decided in favour of the assessee and the order of the CIT(A) is confirmed and the ground of appeal of the Revenue is dismissed." 25. The aforesaid decisions are squarely applicable to the facts of the present appeals. 26. Coming back to the facts of the case as mentioned elsewhere, when the penalty proceedings were initiated by the JCIT, even the JCIT proceeded with the observations of th....
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.... borrower relationship. In other words, the amount which is the subject matter of consideration in the present cases is out of tax paid from income/disclosed sources of Spaze Towers. 31. The Hon'ble Karnataka High Court in the case of Chamundi Granite 239 ITR 694 relied upon by the JCIT has also held that the ultimate aim of section 269SS is to prevent evasion of tax. Whereas, the facts of the appellants clearly shows that the taxes have been paid by Spaze Towers as per the order of the Supreme Court and there is no evasion of tax. 32. The Hon'ble Supreme Court in the case of Kum. A.B. Shanthi 255 ITR 258 has held that the object of introducing the provisions of section 269SS of the Act is to ensure that the tax payer is not allowed to give false explanation for his unaccounted money. 33. In the present cases, there is no dispute about the sources of money wherefrom the expenditure had been incurred which has already suffered taxation in the hands of the company Spaze Towers and the very same money cannot be considered as representing undisclosed income of the appellants for which false explanation is being given as loan to attract the provisions of section 269SS r....
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....appeal of the assessee against the original assessment order was heard and allowed thereby setting aside the assessment order itself. It is in this backdrop, a question has arisen as to whether the penalty order, which was passed on the basis of original assessment order and when that assessment order had been set aside, could still survive. 4. The Tribunal as well as the High Court has held that it could not be so for the simple reason that when the original assessment order itself was set aside, the satisfaction recorded therein for the purpose of initiation of the penalty proceeding under Section 271E would also not survive. This according to us is the correct proposition of law stated by the High Court in the impugned order. 5. 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. These appeals are, a....
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.... Rs. 3,00,000/- on account of cash receipts from M/s Spaze Towers Pvt. Ltd to meet personal household expenses. 2. Addition of Rs. 45,91,675/- on account of unrecorded investment in gold and diamonds. 3. Addition of Rs. 75,00,000/- on account of unrecorded expenses on a marriage function of the daughter of the respondent during the year." 3. Feeling aggrieved, the respondent preferred an appeal before the CIT (A), who vide order dated 20-8-2018 (A-2) confirmed addition of Rs. 5,91,675/- out of total addition of Rs. 45,91,675/- and deleted all other additions amounting to Rs. 1,18,00,000/-. In this order, it has further been held that for the same assessment year, Spaze Towers Pvt. Ltd had approached the learned Settlement Commission on 30-11-2016 and made disclosure of income and also disclosed that on various occasions, the Company had advanced certain amounts to the respondent, which were on returnable basis. 4. Consequent to the directions contained in the dated 20-8-2018, penalty proceedings under section 271D of the Act 1961, for contravention of the provisions of Section 269SS of the Act 1961, were initiated by JCIT, Central Range, Gurugram and a show cause notice....