AMSELOR COMMODITY TRADE LLP,DURGAPUR vs. A.O., WARD - 1(1), DURGAPUR

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ITA 2845/KOL/2025Status: DisposedITAT Kolkata17 February 2026AY 2017-20183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the provisions of Section 269SS of the Income Tax Act, 1961, are not applicable to capital contributions made by partners to an LLP. Therefore, the penalty levied under Section 271D for accepting cash as capital introduction was unsustainable. The Tribunal also held that the provisions of Section 269T of the Income Tax Act, 1961, are not applicable to cash withdrawals made by partners from their capital accounts. Consequently, the penalty levied under Section 271E for such withdrawals was also not sustainable. The Tribunal set aside the orders of the CIT(A) and directed the Assessing Officer to delete both penalties. The appeals were allowed.

What were the facts?

The assessee, Amselor Commodity Trade LLP, filed appeals against penalty orders for Assessment Year 2017-18. The Income Tax Officer, Ward 1(1), Durgapur, initiated proceedings after a survey under Section 133A and reopening under Section 147. During the survey and assessment, it was observed that the assessee accepted cash amounts of ₹2,60,000 from each of its partners, Shri Manish Sangwan and Shri Sali Behl. The Additional Commissioner of Income-tax treated these as violations of Section 269SS. Similarly, partners withdrew cash aggregating to ₹3,02,000 from their capital accounts, which the Assessing Officer deemed a violation of Section 269T. The Commissioner of Income-tax (Appeals) confirmed the penalties imposed by the Assessing Officer.

What were the issues?

1. Whether the acceptance of cash amounts aggregating to ₹2,60,000 from each partner as capital introduction by the assessee LLP constitutes a violation of Section 269SS of the Income Tax Act, 1961, thereby attracting penalty under Section 271D. 2. Whether the cash withdrawals aggregating to ₹3,02,000 by the partners from their capital accounts constitute a violation of Section 269T of the Income Tax Act, 1961, thereby attracting penalty under Section 271E. Assessee's contentions: The assessee argued that the amounts accepted from partners were capital introductions and that cash withdrawals by partners from their capital accounts were not in contravention of the specified sections. Revenue's contentions: The revenue, through the Assessing Officer and confirmed by the CIT(A), contended that these transactions were in violation of Sections 269SS and 269T, respectively, warranting the imposition of penalties.

Which sections of the Income-tax Act were involved?

Section 269SS,Section 271D,Section 269T,Section 271E,Section 133A,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Prasenjeet Ram, AR
For Respondent: Shri Anup Biswas, DR
Hearing: 09.02.2026Pronounced: 17.02.2026

These are appeals preferred by the assessee against the penalty order of the Commissioner of Income-tax (Appeals), Kolkata-27, (hereinafter referred to as the “Ld. CIT(A)”] dated 25.09.2025 for the AY 2017-18.

2. The issue raised by the assessee is against the order of ld. CIT (A) confirming the penalty as imposed by the ld. AO of ₹5,20,000/- u/s 271D of the Act in respect of amount accepted in violation of Section 269SS of the Act.

2846/KOL/2025 4. The only issue raised by the assessee is against the penalty of ₹3,02,000/- as imposed by the ld. AO u/s 271E of the Act.

5.

After hearing the rival contentions and perusing the materials available on record, we find that the partners of the LLP have withdrawn some money in cash aggregating to ₹3,02,000/- from their capital accounts which were treated by the ld. AO to have been withdrawn in violation of Provisions of Section 269T of the Act and imposed penalty of ₹3,02,000/- u/s 271E of the Act. The ld. CIT (A) confirmed the said penalty order passed by the ld. AO. In our considering view the

6.

In the result, the both appeal of the assessee is allowed.

Order pronounced in the open court on 17.02.2026.

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