TaxTMI 
TaxTMI 
2024 (5) TMI 746
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....h, Kolkata dated 12.01.2012 in ITA No. 1940/Kol/2009 (A.Y. 2004-05), No.1941/Kol/2009 (A.Y. 2005-06), No. 1942/Kol/2009 (A.Y. 2006-07), No.1943/Kol/2009 (A.Y. 2007-08), No. 1952/Kol/2009 (A.Y. 2004-05), No. 1953/Kol/2009 (A.Y. 2005-06), No. 1954/Kol/2009 (A.Y. 2006-07) and No. 1955/Kol/2009 (A.Y. 2007-08). All the above-noted eight appeals were filed by the assessee involving identical question regarding levy of penalty under Sections 271D or Section 271E of the Income Tax Act, 1961 (hereinafter referred to as 'the Act, 1961'), which have been decided by the impugned common order of the ITAT. 4. Briefly stated facts of the present case are that during the assessment years in question, the respondent/assessee company received share application money for preference shares amounting to Rs. 20,000/- or more from persons otherwise than by an account payee cheque or by account payee bank draft. The assessing officer issued a show cause notice for penalty under Section 271D/271E on the ground that the assessee has violated the provisions of Section 269SS. The Additional Commissioner imposed penalty under Section 271D for assessment years 2005-06, 2006-07 and 2007-08 and also imposed pe....
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....o tax under this Act.] Explanation.- For the purposes of this section,- [(i) "banking company" means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act:] (ii) "co-operative bank" shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949): (iii) "loan or deposit means loan or deposit of money.] 269T. No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the loan or deposit if- (a) the amount of the loan or deposit together with the interest, if any, payable thereon, or (b) the aggregate amount of the loans or deposits held by such person with the branch of the banking company or co-operative bank or, as the case may be, the other company or co-operative society or the firm, or other person either in his own name or jointly with any other person on the....
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....y the Hon'ble Supreme Court in the case of Assistant Director of Inspection Investigation Vs. A. B. Shanthi (2002) 6 SCC 259 (paragraphs 8 and 10), as under : "8. The contention of the appellant's counsel has no force. The object of introducing Section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he has given some false entries in his accounts, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so called lender also to manipulate his records later to suit the plea of the tax payer. The main object of Section 269SS was to curb this menace. As regards the tax legislations, it is a policy matter, and it is for Parliament to decide in which manner the legislation should be made. Of course, it should stand the test of constitutional validity. * * * * * * * * * 10. The above dictum applies in full force as regards the present case. The object sought to be achieved was to eradicate the ....
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....ty," 11. In Commissioner of Income Tax Vs. Bazpur Cooperative Sugar Factory Ltd., (1988) 3 SCC 553 (para 15) the Hon'ble Supreme Court has held that the essence of 'deposit' is that there must be a liability to return it to the party by whom and on whose behalf it is made on the fulfilment of certain conditions. In Keshavlal Kemchand and Sons Pvt. Ltd. Vs. Union of India (2015) 4 SCC 770 (para 29) the Hon'ble Supreme Court has held that the expression 'loan' is the act of advancing money by one person to another under an agreement by which the recipient of money agrees to repay the amount on agreed terms. 12. We find that the words loan or deposit has been defined in Explanation-(iii) to Section 269T which is not an expansive definition. It provides that "loan or deposit" mean any loan or deposit of money which is repayable after notice or repayable after a period and, in case of a person other than a company including loan or deposit of any nature. Share application money is neither repayable after notice nor repayable after a period. It is for participation in the capital of the company. Therefore, neither as per the definition of the words "loan or deposit" as given in the....