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Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI
Before: Shri Joginder Singh, & Shri Ashwani Taneja
28/04/2016 सुनवाई क" तार"ख / Date of Hearing : 20/05/2016 आदेश क" तार"ख /Date of Order: आदेश / O R D E R Per Ashwani Taneja (Accountant Member): This appeal has been filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai- 30{(in short ‘CIT(A)’}, dated 05.09.2912 passed against penalty 2 Monica K. Savlani
order u/s 271D dated 16.11.2010 for the Assessment Year 2008-09. 2. During the course of hearing, arguments were made by Shri K.S. Chokshi, Authorised Representative (AR) on behalf of the Assessee and by Shri Vivekanand Ojha, Departmental Representative (DR) on behalf of the Revenue.
The only effective ground raised in this appeal is with regard to levy of penalty of Rs. 50,000/- by the AO, on the ground that loan given by the assessee in earlier year was received back in cash.
3.1. During the course of hearing it was brought to our notice by the Ld. Counsel that the transaction was not treated as non-genuine. Rather complete information was given and nothing wrong was found. Under these circumstances penalty was not leviable. It was further submitted that in any case this transaction was outside scope of section 269SS/269T as it was a case of receiving back of loan. It is neither a case of giving of loan or accepting of loan in cash and therefore, it was outside the provisions of penal provisions. On the other hand, Ld. DR relied upon the orders of the lower authorities.
3.2. We have gone through the submission made by both the sides as well as copies of judgments placed before us. It is noted that assessee had given following justification to the AO for receiving back amount in cash:
3 Monica K. Savlani “Our client is in receipt of the aforesaid notice wherein your honour has expressed to levy penalty u/s 271D. Your honour is requested to note that it is not a new loan that has been accepted by the assessee in cash. The assessee had advanced the amount of Rs50000/- to M/s Tee Ess International (Teles Installation) during the F Y 2000-2001. There was no movement in the said loan account up to F Y 2007-08 wherein the said loan was repaid. The assessee was repaid in cash. Hence the assessee has only accepted the repayment of her loan and not a fresh loan. The same was accepted in order to safeguard her interest in the advance given by her during the F Y 2000-01. As seen the said loan was repaid after a period of seven years, the assessee had no objection in receiving the same as long as she was getting her money back. Also your honour has not given any adverse remarks for the above refund of loan. Based on the above facts, your honour's attention is drawn to the provisions of section 273B which states as under; Penalty not to be imposed in certain cases. 273B. Notwithstanding anything contained in the provisions of [clause b) of sub-section (1) of] [section 271, section 271A, (section 271AA,] section 271B [ section 271BA], [section 271BB,] section 271C, [section 271CA,] section 271D, section 271E, [section 271F, [section 271FA,] [section 271FB,] [section 271G,]] clause (c) or clause (d) of sub-section (1) or sub- section ('2) of section 272A, sub-section (1) of section 272AA] or [section 272B or] [sub-section (1) [or sub- section (1A)] of section 272BB or] [sub- section (1) of section 272BBB or] clause (b) of sub-section (1) or clause b) or clause (c) of sub-section (2) of section 273, no penalty shall he imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.] The view held by the Punjab and Haryana High Court in 4 Monica K. Savlani the case of CIT v Swill Kumar Goel (315 ITR 163 (P&H)) was '(i,) There was no dispute about the fact that the cash transactions of the assessee were with the sister concern and these transactions were within the family and due to business exigency. A family transaction, between two independent assesses, based on an act of casualness, especially in a case where the disclosure thereof was contained in the compilation of accounts, and which had no tax effect, established 'reasonable cause' u/s.273B of the Act. (ii) Since the assessee had satisfactorily established 'reasonable cause u/s.273B of the Act, lie must he deemed to have established sufficient cause for not invoking the penal provisions u/s. 271D and u/s.271E of the Act against him. The deletion of penalty by the Tribunal was valid." In view of the above facts it is seen that the assessee had a reasonable cause for accepting the said loan. However, due to the acceptance of the repayment of the loan, there was neither any implication on the taxable income of the assessee nor had the assessee entered into this transaction to evade J4xJhe assessee has co- operated during the assessment and had given all details.”
3.3. It is further noted that assessee submitted copy of balance sheet and ledger account showing that the amount was given in earlier years which has been received back during the year under consideration. The ledger account is duly confirmed by the other party. Thus, on facts, there is no dispute and the transaction has been accepted even by the lower authorities. Under these circumstances, we find that penalty cannot be levied on the impugned transactions for the 5 Monica K. Savlani reason that it is a case of receiving back of the amount. It is neither the case of giving or accepting of loans in cash and therefore, the transactions of the assessee does not fall under the provisions of sections 269SS/269T. The penal provisions have to be construed strictly. We derive our support from the judgments of Hon’ble Hyderabad Bench in the case of DCIT v. Ankush Rao Ingle 39 SOT 263 (HYD). It is further noted by us that Hon’ble Bombay High Court had held in the case of CIT vs. Triumph International Finance (I) Ltd. 22 taxmann.com 138 (Bom) that in absence of findings to the effect that repayment of loan/deposit was not a bona fide transaction and was made with a view to evade tax, no penalty u/s 271E could be imposed for contravening provisioning of section 269T. It is noted by us that no such case has been made out by the lower authorities to show that the transaction of the assessee was not bona fide. Thus, under these circumstances, viewed from any angle, the penalty was not leviable, therefore same is deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 20th May, 2016. (Joginder Singh) (Ashwani Taneja) "या"यक सद"य / JUDICIAL MEMBER लेखा सद"य / ACCOUNTANT MEMBER मुंबई Mumbai; "दनांक Dated: 20/05 /2016 ctàxÄ? P.S/."न.स.