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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R
Per Manoj Kumar Aggarwal (Accountant Member):- 1. In the aforesaid appeal by assessee for Assessment Year [AY] 2011- 12, the assessee is aggrieved by levy of penalty us 271D for Rs.5,58,427/- for alleged contravention of Section 269SS as levied by Ld.AO vide penalty order dated 04/09/2014 and confirmed by Ld. Commissioner of Income Tax (Appeals)-20 Mumbai [CIT(A)] vide impugned order dated 23/02/2018.
Drawing our attention to the Tax Audit Report, the Ld. Authorized Representative for Assessee [AR], Shri Mahesh Saboo, submitted that revenue proceeded on wrong assumption of facts that the assessee accepted loans in cash from one of its directors in contravention of Section 269SS. Our attention has been drawn to the ledger extract to submit that Ld. AO misunderstood that the payments was received in cash whereas the entries of debit / credit were merely journal entries. It has been submitted that certain payments were made by the director i.e. Mr. Anil Kumar Jhawar to electricity department on behalf of the assessee company by way of account payee cheque / demand draft on 15/07/2010 for Rs.3,07,227/- and on 18/08/2010 for Rs.2,51,000/- and therefore, credit was given to the said director by way of journal entries in the books of assessee company. The lower authorities proceeded on wrong assumption that the said entries were cash entries. In the above background, it has been submitted that there was no violation of Section 269SS, in any manner, as alleged by the revenue. Our attention has also been drawn to the fact the similar penalty levied u/s 271E on account of alleged repayment of loan in cash has been deleted by the Tribunal vide order dated 30/01/2019. The Ld. DR relied upon the stand of lower authorities.
Upon careful consideration, we find that lower authorities got misled by wrong assumption of fact that Tax Auditor has reported violation of Section 269SS in the Tax Audit Report. Upon perusal of relevant extract of Tax Audit Report, we find that no such violation has been reported either in clause 24(a) or in Clause 24(b) as misread by the revenue. The observation ‘Yes’ has been put by the Tax Auditor against Clause 24(c) which is nothing but mere affirmation by the Tax auditor that a certificate has been obtained from the assessee regarding taking or accepting loan or deposit, or repayment of the same through an account payee cheque or bank draft. 4. The perusal of ledger extract of the said director in assessee’s book corroborate the submissions made by Ld. AR that the credit was given by way of journal entry only and there was no acceptance of loan in cash since the director had paid certain electricity charges on behalf of the assessee company, the credit of which was given through journal entries. 5. Under the circumstances the impugned penalty could not be sustained from any angle. Therefore, by deleting the same, we allow assessee’s appeal. 6. Resultantly, the appeal stands allowed. Order pronounced in the open court on 23rd April, 2019. Sd/- Sd/- (Saktijit Dey) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member