TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1235
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....ted the provisions of Section 269SS and 269T of the Act which debarred acceptance and repayment of loan respectively in cash beyond a certain limit. In the present case, the charge of the Revenue was that the assessee had taken loans of Rs. 8,25,000/- in cash and repaid the same otherwise than by account payee cheque as required by Statute, i.e. the repayment was found to have been made by bearer cheques in violation of the provision of law, and therefore, the penalty levied on the assessee of the equivalent amount of cash loan taken and repaid amounting to Rs. 8,25,000/- each u/s 271D and 271E of the Act. 4. The same was confirmed by the ld. CIT(A) and hence the present appeal before us raising the following grounds in the respective appeal as under:- Grounds raised in ITA No. 952/Ahd/2023 "1. In law and in the facts and circumstances of the case, the CIT(A) has grievously erred in upholding the penalty levied by Ld. Jt. CIT, Range-4(2), Ahmedabad of Rs. 8,25,000/- u/s 271E of the Act for alleged violation of provisions of Section 269T of the Act, in the penalty order dated 29.03.2018 made by him for A.Y. 2013-14. 2. In law and in the facts and circumstances of the case, th....
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....7 75,000/- 15/07/2012 3. Atul Navinchandra Shah State Bank of India 10160898437 75,000/- 15/08/2012 4. Atul Navinchandra Shah State Bank of India 10160898437 75,000/- 15/05/2012 5. Atul Navinchandra Shah State Bank of India 10160898437 75,000/- 15/09/2012 6. Atul Navinchandra Shah State Bank of India 10160898437 75,000/- 15/10/2012 7. Atul Navinchandra Shah HDFC 491000002155 75,000/- 15/12/2012 8. Atul Navinchandra Shah HDFC 491000002155 75,000/- 15/01/2013 9. Atul Navinchandra Shah HDFC 491000002155 75,000/- 15/11/2012 10. Atul Navinchandra Shah HDFC 491000002155 75,000/- 15/02/2013 11. Atul Navinchandra Shah HDFC 491000002155 75,000/- 15/03/2013 3. It is pertinent to mention here that Shri Kaushik J. Shah, Director of M/s. Sudama Resorts Pvt. Ltd. has already accepted that these cheques found and seized by the Police Authorities during their search operation were actually financed in cash by the financiers and he was not in the position to give the names of financiers. Hence, he owned-up the same as his income for FY. 2012- 13 during the course of recording his statement on 07....
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....for the repayment of the same otherwise than by account payee cheque equivalent to the amount of loan taken and repaid amounting to Rs. 8,25,000/- each. 7. The contention of the ld. Counsel for the assessee before us was that it was evident from the above facts that the allegation of the department of the assessee having taken cash loans and repaid the same in violation of provisions of Section 269SS and 269T of the Act was based merely on surmises and conjectures and there was no concrete evidence substantiating the said fact with the Department. He contended that the entire case of the Revenue rests on the statement of Mr. Kaushik J. Shah; and despite the assessee demanding cross-examination, the same was not afforded to the assessee. He further pointed out that out of 11 bearer cheques found at Sudama Resorts relating to the assessee of Rs. 75,000/- each ,some were still not deposited on the date when the search was conducted. He also pointed out that the Director of the Sudama Resorts had in fact owned up all income on account of the cash and cheque found and the same had been taxed in his hands also by the Department. That, therefore, with no concrete findings of the assessee....
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....ponse is re-produced - common submission for 271D & 2716) CIT(A) finding - reliance placed on various decisions are on different facts where the factum of accepting loan in cash was established. Assessee's Plea In the instant case - its only a presumption based on undeposited cheques found & statement of Mr Kaushik Shah where Mr Atul Shah (Assessee) has NOT been mentioned anywhere. Nothing is brought on record to establish that Cash loan was received / Loan repaid in cash. Thus penalty is based on conjectures, surmises & suspicion. Decisions relied upon: 1) Navin Kumar v. JCIT, Bhatinda in ITAT Amritsar in 98 ITD 242 Relevant headnotes reproduced for reference: The factual finding recorded by the Commissioner (Appeals) was fully supported by the material on record. Except photocopies of alleged statement of loan account of the assessee which was contradicted by admission of 'H' and was shown to be incomplete, there was no material to infer that loan/deposit in contravention of the provisions of section 26955 was returned by the assessee. Therefore, it was not possible to accept that 'f' did not make admissions in his statement attributed to him by ....
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.... for reference: "7. After going through rival submissions and material on record we find that certain cheques were claimed to have been issued as security for the entire Sneh group to the statement of Shri Mahendra Yeole recorded u/s 131 on 11-1-2003 it was confirmed by him that the cheques found and seized from the premises of ShriH.H. Shah were issued from different firms and money was borrowed for business purposes and that such cheques were taken back on renewal of the loan transactions. Some of those cheques were used for making payments while others were cancelled it was general statement with regards to transactions with Sneh group but it is not in particular with regards to assessee i.e. Sneh Builders. There is nothing on record to suggest that the copy of the statement by Shri B.H. Shah was given to assessee at any point of time. There is also nothing on record that assessee was offered any opportunity to crass examine said B.H. shah with regard to amount in question. The action of the Assessing Officer in imposing the penalty u/s 271D on the presumption that against the security of these cheques of Rs. 95,50,000/- the assessee must have taken equivalent amount of cash i....
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.... the Revenue. The assessee in fact had sought cross-examination of the Director of the Sudama Resorts and the same was not given by the Assessing Officer. Therefore, this statement of Director of Sudama Resorts has no evidentiary value in the eyes of law as laid down by the Hon'ble Apex Court in the case of Andaman Timber Industries Vs. CCE in Civil Appeal No. 4228 of 2006 dated 02.09.2015. Moreover it is a fact on record that the director of Sudama Resorts had surrendered income on account of cheques found during search at its premises. There is , I agree with the Ld.Counsel for the assessee , no concrete finding of the Revenue ,based on authentic evidence, of the assessee having accepted and repaid loan in violation of the provisions of section 269SS/T of the Act. The finding of the Revenue to this effect is merely based on surmises and conjectures. In the light of the above, with no clear finding based on authentic evidence of the assessee having violated the provisions of Section 269SS and 269T of the Act, we agree with the ld. Counsel for the assessee that there was no case for levy of penalty u/s 269D and 269E of the Act respectively. 10. Reliance placed by the ld. Counsel....