M/s. Madhuvan Corporation, Vadodara V. The Addl. CIT, Central Range, Vadodara

ITA 1072/AHD/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7712 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 25-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 132; 2; 273B; 143(3); 205; 271D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH (Conducted Through Virtual Court) Before: Shri Mahavir Prasad, Judicial Member And Ms. Annapurna Gupta, Accountant Member M/s. Madhuvan Corporation 401, Kishan Harmony, 21, Rajnagar Society, Akota, Baroda (Assessee) Vs Addl. CIT, Central Range, Baroda (Respondent) Assessee by : Ms. Urvashi Shodhan, Advocate Respondent by : Shri N. J. Vyas, Sr. D.R. Date of hearing : 03-02-2022 Date of pronouncement : 28 -02-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad, (in short referred to as CIT(A)), dated 09-05-2019, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2016-17. 2. The solitary issue in the present appeal relates to levy of penalty u/s. 271D of the Act, amounting to Rs. 16,00,000/-, for violation of the provisions of Section 269SS of the Act, which debars taking or accepting loans/ deposits in cash beyond a specified limit. ITA No. 1072/Ahd/2019 Assessment Year 2016-17 I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 2 3. Brief facts relating to the case are that the assessee is a partnership firm engaged in the business of construction and development of housing projects named as "Kishan Classic" having 220 flats. The assessee had filed its return of income for the assessment year under appeal on 10/10/2016 disclosing total income of Rs.26,22,610/-. During the course of search u/s 132 at the residence of Shri Vishal Tilva, Partner of the assessee, certain documents pertaining to the assessee firm were seized. It is claimed by the assessee that on the said pages, some petty expense of tea and snack incurred at site had been mentioned. However, the AO contended that said noting was in respect of unrecorded receipts (of on-money in cash) from the members and not the petty expenses as claimed by the assessee. The assessee had objected to the said contention but in the assessment order, the AO made an addition of Rs.26,50,000/- as unaccounted receipts for the period. 3.1 The assessee filed an appeal before Hon’ble CIT(A)-12, Ahmedabad who vide order dated 02/11/2018 confirmed the order of the AO to the effect that the noting is in respect of on-money receipts but accepted the assessee's contention that only profit of such unaccounted receipts could be added and accordingly confirmed the addition of Rs.2,38,500/- (@ 9% of Rs.26,50,000/-). 3.2 The AO in the assessment order U/s 143(3) had initiated penalty proceedings U/s 271D for alleged violation of Section 269SS of the Act for receiving subject receipt in cash. A notice U/s 271D of the Act dated 03/12/18 was issued by the Addl. Commissioner of Income Tax, Central Range, Vadodara on the plea that since the assessee had received receipt from members amounting to Rs.26,50,000/- in cash, it had violated provision of Section 269SS of the Act as acceptance of "specified sum" in cash amounting to Rs.20,000/- or more after 01/06/2015 was prohibited. 4. The assessee objected to the levy of penalty as under: I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 3 a)denied having received any amount in cash at all, contending that the notings related to petty expenses b) alternately stated that the notings in the diary had no reference about unit number and name of member therefore there was no basis for holding that receipts from a single person exceeded 20,000/- ,the upper limit specified u/s 269SS of the Act for receiving such payments in cash c) that the onus was on the department to categorically prove violation of the provision by the assessee for levying penalty. 5. The AO rejected all the contentions of the assessee and held that it was a fit case for levy of penalty u/s 271D of the Act. Further the AO held that as the amended provisions of section 269SS came into force w.e.f. 01/06/2015, including any sum received on transfer of immoveable property, the receipts in those pages after the said date aggregating to Rs. 16,00,000/- fell within the ambit of penalty u/s. 271D. Accordingly penalty of Rs. 16,00,000/- was imposed. The relevant findings of the AO at para 5 to 8 of the order are as under: 5. The reply of the assessee has been considered and it is not found tenable on the following grounds:- 5.1 With regard to the assessee's contention that the notings in annexure BS-1 on pages 1-5 as seized during the search, is in respect of petty cash expeses and not of amount received from the members, it is established beyond doubt in the assessment order that these are cash entries in the denomination of 1000 since the cheque entries is tallying with the bank receipts which is in the denomination of 1000, therefore applying the same logic the cash entries would also be in the denomination of 1000. Hence these are in no way petty cash expenses as claimed by the assessee. 5.2 The assessee's other contention is that it is not possible to establish that payment is in excess of Rs 20000/- from one or more members and it is possible that these amount I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 4 in cash is received from all members and average amount received per member is less than Rs 20000/- . As discussed above since the cheque entries mentioned against a particular date have matched with the entries in the bank in denomination of 1000, it is completely justified to conclude that the cash entries are also in the same denomination and hence the assessee's above contention that the average is less than 20000/- is illogical since there is no question of assumptions here as the entries are in black and white countersigned by the managing partner of the firm. There is no doubt that there is violation of provisions of Sec 269SS of IT Act in the case of the assessee and hence it is liable for levying of penalty of Sec 27ID of the IT Act. 6. On perusal of the entries in the seized material as referred above, it is seen that the entries also pertain to the period when the amended provisions of Section 269SS of the Act did not exist. The amended provisions of 269SS have been brought into force by Finance Act, 2015 w.e.f 01.06.2015. Therefore, the 'specified sum' received by the assessee in cash in relation to transfer of immovable property, whether or not the transfer takes place or not will be hit by section 269SS only after 01.06.2015. In case of the assessee the amount of cash received from the members starting from 01.06.2015 comes to Rs 16,00,000/-. 7. In view of the above, it is clear that the assessee has received unaccounted receipt amounting to Rs. 16,00,000-- in cash and this is a fit case for imposing penalty u/s 271D of the IT Act since there is violation section 269SS of the IT Act, which is proven beyond doubt.As per section 271D of the I.T. Act, 1961, if a person takes or accepts any specified sum in contravention of the provision of Sec. 269SS, he shall be liable to pay by way of penalty, a sum equal to the amount of the loan or deposits or specified sum so taken or accepted. 8. I am satisfied that the assessee has intentionally accepted the said amount in contravention of provision of Sec. 269SS, therefore a penalty of Rs. 16,00,000/-is levied on the assessee. The AO is directed to issue demand notice and challan, accordingly. I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 5 6. The matter was carried in appeal before the Ld. CIT(A) where the assessee reiterated the contentions made before the A.O., which was dismissed by the Ld. CIT(A) holding at para 5.3 and 5.4 of his order as under: 5.3 Section 269SS provides that no person shall take or accept from any other person any loan or deposit or any specified sum of Rs.20,000/- or more otherwise than by account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. The word 'deposit' and the newly inserted word 'any specified sum' (w.e.f. 01/06/2015 vide the Finance Act 2015) are capable of including the deposits/contributions from the customers/ members especially the booking by them for purchase of units constructed by the Real Estate Developers like the assessee in the case. Any other person covers the customers/members booking for the purchase of constructed units. 1 am also of the considered view that section 269SS is not restricted to the deposits entered in the regular books of accounts of the assessee. Furthermore it has been held by the Supreme Court in ADIT (Inv) Vs Kumari A B Shan.fi/Chamundi Granites P Ltd, Vs DCIT (2002) 122 Taxman 574 that section 269SS or 27ID is not unconstitutional on the ground that it was draconian or expropriatory in nature and that any undue hardship is very much mitigated by the inclusion of section 273B whereby the penalty cannot be imposed if the assessee has a "reasonable cause" for failure to comply to the respective provision. If there was a genuine and bonafide transaction and if for any reason the assessee could not get deposit(s) by account payee cheque or demand draft for some bonafide reasons, the tax authorities have discretionary powers. 5.4 It has been seen that the seized pages 1 to 5 of Annexure BS-1 have been established to have the amounts with three zero suppressed and therefore they were not related to petty site expenses as claimed by the assessee and in reality the amounts were in cash taken by the assessee as on-money from the customers/members towards the booking/sale of constructed units. It cannot be subscribed that the addition made by the AO was merely on the basis of presumptions. More so it is well known and needs no specific evidence that there are always elements of cash on-money in real estate transactions. There is clear violation of provisions of section 269SS as it stands now and thus the assessee is liable for penalty u/s 27ID. During the appeal proceedings the assessee has not made out any case of "reasonable cause" for the said failure as envisaged u/s 273B for non-levy of the penalty. I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 6 7. Aggrieved by the same the assessee has now come in appeal before us raising the following grounds: 1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts of the assessee's case in confirming the action of the Ld. A.O. in levying penalty U/s. 271D of the Act of Rs.16,00,000/-. 2. Both the lower authorities have erred in law and on facts & circumstances of the assessee's case in not appreciating the fact that no penalty U/S.271D of the Act can be levied. 8. Before us, the ld. Counsel for the assessee reiterated the contentions made before the lower authorities which briefly stated were to the following effect: (i) that there was no clear cut finding of fact of the assessee having received amounts in cash in violation of the provisions of section 269SS of the Act. That the said allegation of the department was a mere presumption based on certain notings in a diary found during search wherein neither the name of the persons from whom the amount was received was mentioned nor the amount received from each person, and the amount mentioned therein was in hundreds which was extra polated by the revenue on their own presumptions and assumptions. (ii) That in any case addition of the diary entries was made as unaccounted income of the assessee to which the provisions of Section 269SS were not attracted. In this regard, reliance was placed on the following case laws: 1. CIT vs. Standard Brands Ltd. [2006] 285 ITR 295 (Delhi). 2. CIT vs. R.P. Singh & Co. (P.) Ltd. [2012] 340 ITR 217 (Delhi). 3. DCIT vs. G.S. Entertainment [2007] 109 TTJ 54 (Mumbai). 9. Ld. D.R. on the other hand heavily supported the order of the Ld. CIT(A). I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 7 10. We have heard both the parties carefully and have also gone through the orders of the authorities below. The issue to be adjudicated relates to the levy of penalty u/s. 271D of the Act for violation of the provisions of Section 269SS of the Act. We shall delve into the specifics of the said section 269SS of the Act at a later stage, suffice to say that the said section prohibits certain transaction to be undertaken in cash beyond a specified limit. 11. The facts relevant for adjudicating the issue are that the assessee is a partnership firm engaged in the business of construction and development of housing projects and during the year under consideration was undertaking housing project viz.”Kisan Classic”. The cash transactions in alleged violation of section 269SS of the Act and on account of which penalty u/s 271D of the Act has been levied amounting to Rs. 16,00,000/- relate to notings in a diary found in the possession of one of its partners Sh. Vishal Talva during search action. The facts relating to these diary notings, as noted in the Assessment Order and which has not at any stage been disputed by the Revenue are that the said notings pertained to the assessee firm in relation to its Kisan Classic Housing Project and, as reproduced at page 3 of the assessment order, contained notings of amounts in hundreds with dates and signatures against each amount. The signatures were that of Mr. Vishal Talva. That some of the entries had “CHQ” mentioned against it, one of which matched with the cheque entry in the assessees HDFC bank account , but the amount was in thousands i.e 100/- noted in the diary against cheque was Rs.1,00,000/- deposited against cheque in the bank account the same date. 12. From the above information, the Revenue derived that all entries, except the cheque entry found deposited in bank, represented unaccounted income of the assessee in thousands and received in cash. The total of all such entries, extrapolated to thousands, amounting to Rs.26,50,000/- was added as undisclosed income of the assessee. The Ld.CIT(A) upheld the finding of the AO that the diary disclosed I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 8 unaccounted receipts of the assessee from its business but restricted the addition to the extent of profits derived therefrom which was estimated at 9% thereof amounting to Rs.2,38,500/- It was stated at bar that no appeal was filed against the order of the Ld.CIT(A) by either of the parties. Penalty u/s 271D of the Act was levied on the alleged cash receipts after the amendment to section 269SS of the Act came into force including therein any sum received for transfer of immoveable property, i.e after 01-06-2015, which amounted to Rs.16,00,000/- 13. Having brought out the facts it is relevant to reproduce the provisions of the section 269 SS of the Act as applicable for the impugned year, to facilitate adjudicating whether there was any violation thereof to attract the levy of penalty u/s 271D of the Act in the present case. 269SS. No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account 82[or through such other electronic mode as may be prescribed83], if,— (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by,— (a) the Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 9 (d) any Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); (e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official G azette: Provided further that the provisions of this section shall not apply to any loan or deposit or specified sum, where the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation.—For the purposes of this section,— (i) "banking company" means a company to which the provisions of the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act; (ii) "co-operative bank" shall have the same meaning as assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; (iii) "loan or deposit" means loan or deposit of money; (iv) "specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. 14. We shall first deal with the contention of the Ld.Counsel for the assessee that the entries having been treated as income of the assessee,section 269SS of the Act has no applicability. Reliance has been placed on various case laws as noted above in earlier part of our order. 15. As per the A.O. and the Ld. CIT(A), however, the assessee’s case is covered as qualifying as ‘specified sum” received otherwise than through modes specified therein. The Ld. CIT(A) has referred to the definition of specified sum in Section 269SS Explanation (iv) reproduced above for the purpose. I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 10 16. We are in agreement with the Revenue on this count. The language of the section is very clear including “any specified sum” alongwith loans and deposits to be accepted or taken in modes other than cash. And ” any specified sum” was included in the transactions covered by the section by way of amendment by Finance Act 2015 w.e.f 01-06 2015. There is no dispute with respect to the applicability of the amended section 269SS w.e.f 01-06-2015, to the present case. Further “specified sum” has been defined in the Explanation to the section as any sum receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. “Any sum receivable” literally interpreted is wide enough to include all nature of receipts including incomes. And they must be in relation to transfer of immovable property. Therefore, post amendment to section 269SS of the Act therefore, we hold, that its applicability is not confined to loans and deposits only but to any sums received on account of transfer of immoveable property including those received by way of income. The contention of the Ld.Counsel for the assessee that the section does not apply to incomes is therefore we find not tenable and hence rejected. The case laws relied upon by the Ld.Counsel for the assessee, we find are of no assistance since they were rendered in the context of the preamended section which applied only to loans and deposits, which accordingly was interpreted by the courts as not including incomes. 17. The next contention of the Ld.Counsel for the assesee was that the charge of violation of section 269SS of the Act by the assessee for the levy of penalty must be clearly established, the onus being on the Revenue while in the present case it was all based on surmises and conjectures. 18. We are in agreement with the assessee on this count. The Rule governing construction of provisions imposing penal liability is that such provisions should be strictly construed. The conditions to be fulfilled for imposition of penalty have to be shown to be strictly complied with. It is only if an assessee falls squarely within the I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 11 letter of law he can be penalized, however inequitable the consequences may be. If the Revenue cannot bring him within the letter of law, the assessee will not be liable no matter that such a construction may cause grave prejudice to the Revenue. The Hon’ble Gauhati High Court in the case of Commissioner of Income Tax vs Maskara Tea Estate (1981) 130 ITR 0955 dealing with the interpretation of penal provisions held that it must be construed strictly as under: “5.We have given our serious attention and consideration to the argument of Dr. Saraf about construction of fiscal statutes. The implication of the principle that a taxing statute must be construed strictly is often misunderstood and unjustifiably extended beyond the legitimate field of its operation. We are of the firm opinion that "in a taxing statute one has to look merely at what has been clearly stated. There is no presumption as to a tax/penalty. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used". We have proceeded in step with the familiar principles laid down by Rowlatt J. in Cape Brandy Syndicate vs. IRC (1921) 1 KB 64, 71 (KB). We have merely added the word it penalty". A penalty is levy of additional tax, as held by the Supreme Court in CIT vs. Bikaji Dadabhai & Co. (1961) 42 ITR 123. It is true that the scheme of the IT Act, 1961, has been changed and Chap. XXI provides for penalty proceedings separately but notwithstanding such changes the Supreme Court in Jain Brothers vs. Union of India (1970) 77 ITR 107 reiterated that penalty is an additional tax. It is true that penalty proceedings are penal in nature and character, in the sense that it follows harsh consequences. In our opinion, the true construction of a charging provision including a provision for charging penalty must receive the construction ruled by Rowlatt J. If a statute intends to impose a penalty or a charge it must be expressed in clear and unambiguous language. If the provision is reasonably clear the Courts have no jurisdiction to mitigate the harshness. However, if the provision is capable of alternative meanings, the Courts will lean in favour of the subject. If the provision is so wanting in clarity, that no meaning is reasonably clear, the Courts will be unable to regard it as of any effect. The sound general rule is that a penalty shall not be considered to be imposed without a plain declaration of the Legislature. One is simply to go on the Act itself, to see that the penalty claimed is that which the Legislature has enacted. No penalty can be levied on any doctrine of "the substance of the matter" as distinguished from its legal signification, as a subject is not liable to penalty on "supposed spirit of law or by inference or by analogy". Lord Sumner observed in Ormond Investment Co. Ltd. vs. Belts (1928) AC 143, 158 (HL): "...the Crown does not tax by analogy but by statute..." I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 12 6. Dealing with the application of "the spirit of the law", in interpreting fiscal statutes, Lord Reid observed in IRC vs. Saunders (1958) AC 285, 298 : 34 ITR 827, 838 (HL): "It is sometimes said that we should apply the spirit and not the letter of the law so as to bring in cases which, though not within the letter of the law, are within the mischief at which the law is aimed. But it has long been recognised that our Courts cannot so apply taxing Acts ........" 7. All the principles of construction of taxing statutes were considered by the Supreme Court in Murarilal Mahabir Prasad vs. B. R. Vad (1976) 37 STC 77 and the rule of construction has been laid down succinctly by Chandrachud J. (as his Lordship then was). The rule stated by Rowlatt J. in Cape Brandy Syndicate (supra) which had been approved and adopted by the Supreme Court in a number of cases has been accepted as the correct principle which is applicable in interpreting our taxing statutes. The relevant observations are extracted (p. 111 of 37 STC): "In that famous passage marked by a happy turn of phrase, Rowlatt J., said, there is no equity about a tax. There is no presumption as to a tax. There is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind, If the Revenue seeking to tax cannot bring the subject within the letter of the law, the subject is free no matter that such a construction may cause serious prejudice to the Revenue. In other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision of a taxing statute. 8. In view of the nature and character of a penal provision it must be construed strictly regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. If a subject falls squarely within the letter of the law he must be penalised, however inequitable the consequences may appear. If, however, the Revenue, seeking to penalise a subject, cannot bring him within the letter of the law, a subject will not be liable, no matter that such a construction may cause grave prejudice to the Revenue. Equitable construction is out of place in respect of penal provision and such a construction is not permissible in interpreting a charging provision of a taxing statute. “ 19. The above rule of strict construction of penal provisions has been reiterated by courts in the following decisions: Ganesh Properties vs CIT (1993)202 ITR 434(Cal) I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 13 Thangalaxmi vs ITO (1994) 205 ITR 176 (Mad) Laxmi Industries vs ITO (1998) 231 ITR 514 (Raj) 20. In the present case penalty being levied for violation of provisions of section 269SS of the Act, the conditions which needed to be fulfilled are a) acceptance in cash b) of specified sums c) amount to exceed Rs.20,000/- d) above limit to apply to receipt from a person. 20.1 But the facts of the present case do not make out such a case. The entries are in hundreds with date and signatures of the partner of the assessee firm against each of them. It is not established that the amount represented specified sums,nor that the amount mentioned in hundreds in the entries was actually in lacs as interpreted by the Revenue. The presumption of receipts in lacs, though on the basis of an entry against which CHQ was mentioned and which matched with a bank entry the same day in lacs, is not corroborated by way of any evidence, be it in the form of asset or any other document found with the assessee representing its alleged business receipts. Further in the absence of any name against each entry it is not established that each entry related to receipts from a person. Also that each entry represented cash receipt has no basis. 20.2 The entire case of the Revenue rests on interpreting the entries in a diary found during search as relating to cash receipts from customers, on the basis of one of the entry having CHQ mentioned against it matching with a bank entry the same day. Treating this entry to be representative of the rest of the entries, the Revenue held that the entries related to business receipts in lacs and in the absence of CHQ mentioned against the entry it was presumed to be receipts in cash. Though it does create a preponderance of probability of the entries being of the same color as the I.T.A No. 1072/Ahd/2019 A.Y. 2016-17 Page No M/s. Madhuvan Corporation vs. Addl. CIT 14 CHQ entry and which may be sufficient for making addition in quantum proceedings, but the same is not sufficient to strictly establish the violation of section 269SS of the Act, of the assessee having received amounts in cash exceeding Rs.20,000/- from a person on account of sale of flats, so as to attract levy of penalty u/s 271D of the Act. 21. In view of the above therefore ,we hold, that the Revenue having not clearly established the violation of provisions of section 269SS of the Act by the assessee ,its entire case resting on interpretation of entry in a diary found during search,it is not a fit case for levy of penalty u/s 271D of the Act. The penalty so levied is accordingly directed to be deleted. 22. In effect, appeal of the assessee is allowed. Order pronounced in the open court on 28 -02-2022 Sd/- Sd/- (MAHAVIR PRASAD) (ANNAPURNA GUPTA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad : Dated 28/02/2022 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद