DEEPAK GOYAL,NEW DELHI vs. JCIT, NEW DELHI

The present appeal is directed at the instance of the assessee against the order of the CIT(A) dated 30th March, 2015 passed for Assessment Year 2008-09. The solitary grievance of the assessee is that the CIT(A) has erred in confirming the penalty of Rs.81,000/- imposed by the AO u/s 271D of the Income-tax Act, 1961 (for short ‘the Act’).

The brief facts of the case are that the assessee has filed his return of income on 26th September, 2008. His case was selected for scrutiny assessment and during the course of assessment proceedings, it came to the notice of the AO that the assessee has received cash loan of Rs.81,000/- from Mrs. Tanu Goyal. The ledger account of Mrs. Tanu Goyal in the books of Krishna Paper Mart was obtained during the assessment and penalty proceedings have been recommended for initiation u/s 271D of the Act. Ultimately, penalty of Rs.81,000/- was imposed by the AO (JCIT, Range-36, Delhi). According to the ld. AO, the assessee has violated the provisions of section 269SS and, therefore, he deserves to be visited with penalty. Dissatisfied with the AO, the assessee carried the matter before the CIT(A). It was contended that the assessee has taken a sum of Rs.81,000/- from his wife on four different occasions. These were not loans, but, only gifts and no violation of section 269SS could be alleged against the assessee. The ld. first appellate authority has rejected this contention of the assessee on the ground that ledger account of Mrs. Tanu Goyal in the books of Krishna Paper Mart showed the closing balance of Rs.1,81,500/- as on 31st March, 2008. Thus, according to the ld.CIT(A), the assessee took the loan, but, in order to avoid levy of penalty u/s 271D, he took this plea during the penalty proceedings. Accordingly, the ld.CIT(A) concurred with the AO and confirmed the penalty.

With the assistance of ld. representatives, I have gone through the record carefully. There is no doubt that in the books a sum of Rs.1,81,500/- was shown in the name of Mrs. Tanu Goyal. Accordingly, ld. Revenue authorities have construed it as loan, but, the explanation of the assessee is that recording a sum of Rs.81,000/- as loan was an error committed by the Accountant. In fact, it was a gift from the wife and, therefore, no penalty u/s 271D be imposed upon him. The ld. Revenue authorities appreciated the controversy strictly adhering to the accounting entries without visualizing the impact of the explanation given by the assessee. It is to be appreciated that when money was taken from the wife and a plea was taken that it was a gift, then, demonstrative evidence exhibiting the receipt of money as gift or a loan could be quite difficult. The AO simply went ahead with the accounting entry. In our opinion, for rejecting the contention of the assessee, he should have examined the assessee or his wife. The plea has not been examined from that angle on merit. There is nothing on the record which could rebut his plea that it was not an inadvertent mistake at the hand of the Accountant by recording it as a loan. Considering this aspect, I allow the appeal of the assessee and delete the penalty.

In the result, the appeal is allowed.