M/S SPACE N PLACE PROMOTERS P LTD, CHENNAI V. JCIT CORPORATE RANGE 6, CHENNAI

ITA 1665/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4421 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAO IRS
• Assessee Lawyers: B RAMAKRISHNAN
• Section: 271D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH : CHENNAI . , !' # $! # % . & , ( * + [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A. NO.1665/CHNY/2018. / ASSESSMENT YEAR : 2011-2012. M/S. SPACE N PLACE PROMOTERS P. LTD, NO.18, V V KOIL STREET, PERIAMET, CHENNAI 600 003. VS. THE JOINT COMMISSIONER OF INCOME TAX, CORPORATE RANGE 6 CHENNAI [PAN AAKCS 0817N] ( ,- / APPELLANT) ( ./,- /RESPONDENT) / APPELLANT BY : SHRI. B. RAMAKRISHNAN, FCA /RESPONDENT BY : SHRI. M. SRINIVASA RAO, IRS, CIT. /DATE OF HEARING : 19-03-2019 ! /DATE OF PRONOUNCEMENT : 21-03-2019 0 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE ASSESSEE, WHICH IS DIRECTED AGAINST AN ORDER DATED 30.01.2018 OF LD. COMMISSION ER OF INCOME TAX (APPEALS)-15, CHENNAI, IT IS AGGRIEVED ON LEVY OF PENALTY U/S.271D OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR VIOLATION OF THE MANDATE U/S.269SS OF THE ACT. ITA NO.1665 /2018 :- 2 -: 2. ASSESSEE ENGAGED IN THE BUSINESS OF REAL ESTATE WAS SERVED WITH A NOTICE U/S.271D OF THE ACT BY THE LD. ASSES SING OFFICER CITING VIOLATION OF SECTION 269SS OF THE ACT. AS PER THE L D. ASSESSING OFFICER, ASSESSEE HAD RECEIVED CASH LOANS / ADVANCES FROM THE FOLLOWING PERSONS. SL.NO NAME OF THE PERSON (SMT/SHRI.) AMOUNT C 1 M.R. JAYALAKSHMI 12,50,000 2 S. MANOHAR 3,50,000 3 M. ANANDAN 5,00,000 4 K. PADMA 12,66,000 5 A.P. ASHOK KUMAR 43,30,000 6 C. BAMA 9,90,000 7 D. CHINNAKANNU 23,40,000 1,10,26,000 LD. ASSESSING OFFICER WAS OF THE OPINION THAT THE A SSESSEE, BUT FOR SEEKING ADJOURNMENTS, DID NOT GIVE ANY WORTHWHILE R EPLY AS TO WHY IT HAD ACCEPTED LOANS/ ADVANCES IN CASH. LD. ASSESSIN G OFFICER THEREUPON TOOK A VIEW THAT ASSESSEE HAD VIOLATED SE CTION 269SS OF THE ITA NO.1665 /2018 :- 3 -: ACT FOR A SUM OF C1,10,26,000/-. PENALTY OF LIKE A MOUNT WAS LEVIED U/S.271D OF THE ACT. 3. ASSESSEES APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) DID NOT MEET WITH ANY SUCCESS. THOUGH THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SOUGHT A REMAND REPORT FROM THE LD. ASSESSING OFFICER WITH REGARD TO THE SUBMISSION MA DE BY THE ASSESSEE BEFORE HIM, AS PER THE LD. CIT(A), LD. ASSESSING OF FICER IN SUCH REMAND REPORT STATED THAT ASSESSEE DESPITE VARIOUS NOTICE S GIVEN TO IT, DID NOT FURNISH ANY EXPLANATION FOR THE VIOLATION OF SECTI ON 269SS OF THE ACT. ASSESSEE DID STATE BEFORE LD. COMMISSIONER OF INCO ME TAX (APPEALS) THAT A SUM OF C76,60,000/- OUT OF C1,10,26,000/- WA S RECEIVED FROM ITS PROMOTERS A.P. ASHOK KUMAR, C. BAMA AND D. CHINNAKA NNU AND THE BALANCE SUM OF C33,66,000/- WAS RECEIVED FROM FOUR PARTIES AS ADVANCE TOWARDS SALE OF LAND. HOWEVER, LD. COMMISS IONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT ASSESSEE COUL D NOT JUSTIFY THE EXPLANATION GIVEN BY IT. HE THUS CONFIRMED THE LEV Y OF PENALTY. 4. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE STRON GLY ASSAILING THE ORDERS OF THE LOWER AUTHORITIES SUBMI TTED THAT ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR WAS COMPLETED BY THE LD. ASSESSING OFFICER ON 25.03.2014 AFTER A SCRUTINY. AS PER THE LD. ITA NO.1665 /2018 :- 4 -: AUTHORISED REPRESENTATIVE, ADVANCES RECEIVED BY THE ASSESSEE WERE FOUND TO BE GENUINE IN SUCH ASSESSMENT AND NO ADDIT IONS WERE MADE. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WA S THAT RECEIPT OF MONEY FROM THE FIRST FOUR PARTIES MENTIONED AT PARA 2 ABOVE WERE ADVANCES AGAINST SALE OF LAND. ACCORDING TO HIM, S ALE OF FLATS TO ATLEAST TWO OF THE ABOVE HAD HAPPENED IN THE SUCCEEDING YEA R. FURTHER, AS PER THE LD. AUTHORISED REPRESENTATIVE, ALL THESE PE RSONS HAD FILED CONFIRMATION LETTERS BEFORE LD. ASSESSING OFFICER A LONGWITH LEDGER COPY OF THE ASSESSEE IN THEIR BOOKS, PURSUANT TO SUMMONS ISSUED TO THEM. CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WA S THAT THESE CONFIRMATIONS CLEARLY DEMONSTRATED THE NATURE OF SUMS GIVEN BY THEM WERE ADVANCES AGAINST PURCHASE OF FLATS. IN SO FAR AS MONEY RECEIVED FROM PROMOTERS WERE CONCERNED, LD. AUTHORI SED REPRESENTATIVE SUBMITTED THAT THEY HAD GIVEN SUCH AMOUNTS FOR MEETING THE DAY-TODAY EXPENDITURE OF THE ASSESSEE A ND THESE WERE NOTHING BUT TEMPORARY ADVANCES. AS PER THE LD. AU THORISED REPRESENTATIVE, THESE ADVANCES WERE RECEIVED IN THE CURRENT ACCOUNTS OF CONCERNED PERSONS, IN THE BOOKS OF THE ASSESSEE . ACCORDING TO HIM, THESE WERE NEITHER LOANS OR DEPOSITS. RELYI NG ON SECTION 269SS OF THE ACT, AS IT STOOD PRIOR TO ITS SUBSTITUTION B Y FINANCE ACT, 2015, LD. AR SUBMITTED THAT SPECIFIED SUM WAS BROUGHT WITHIN THE AMBIT OF THE SAID SECTION ONLY FROM 01.06.2015. AS PER THE LD. ITA NO.1665 /2018 :- 5 -: AUTHORISED REPRESENTATIVE, EXPLANATION (IV) TO SECT ION 269SS OF THE ACT, WHICH DEFINED SPECIFIED SUM, CAME INTO EFFECT ONLY FROM 01.06.2015 AND THIS CLEARLY DEMONSTRATED THAT ADVAN CES OR OTHER SUM RECEIVED IN RELATION TO TRANSFER OF AN IMMOVABLE PROPERTY WAS NOT ON PAR WITH LOANS OR DEPOSITS AS IT STOOD PRIOR TO SUB STITUTION OF SECTION 269SS OF THE ACT. ACCORDING TO HIM, ASSESSEE HAD G IVEN A DETAILED REPLY ON 17.12.2014 TO THE LD. ASSESSING OFFICER B UT THIS WAS IGNORED FOR NO REASON. RELIANCE WAS ALSO PLACED ON THE JUD GMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. IDYAYAM PUBLICATIONS LTD, (2006) 285 ITR 221. THUS, ACCORDING TO HIM, LEVY OF PENALTY WAS DONE MERELY ON PRESUMPTIONS AND OUGHT TO BE DELETED. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTING THE ORDERS OF THE LOWER AUTHORITIES SUBM ITTED THAT EVEN IF MONEY RECEIVED BY THE ASSESSEE WERE FROM ITS CUST OMERS AS ADVANCES, STILL IT STOOD COVERED U/S.269SS OF THE A CT. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE, NATURE OF THE PAYMENTS MADE BY THE CUSTOMERS TO THE ASSESSEE WERE NOTHING BUT PURE LO ANS AND NOT ADVANCES. ACCORDING TO HIM, IT MIGHT BE TRUE THAT OUT OF FOUR PERSONS WHO HAD LOANED MONEY TO THE ASSESSEE, TWO HAD ACQU IRED FLATS FROM IT. HOWEVER, AS PER THE LD. DEPARTMENTAL REPRESEN TATIVE, THIS ALSO CLEARLY DEMONSTRATED THAT THE OTHER TWO PERSONS HAD NO INTENTION OF BUYING ANY PROPERTY FROM THE ASSESSEE AND WHAT THEY HAD GIVEN WAS ITA NO.1665 /2018 :- 6 -: ONLY LOANS. IN SO FAR AS MONEY RECEIVED FROM PROM OTERS WERE CONCERNED, CONTENTION OF THE LD. DEPARTMENTAL REPRE SENTATIVE WAS THAT NECESSITY OF ACCEPTING SUCH MONEY IN CASH WAS NEVER DEMONSTRATED BY THE ASSESSEE. ACCORDING TO HIM, A SSESSEE NEVER FURNISHED ANY DETAILS OR REPLY TO THE NOTICES ISSUE D TO THE ASSESSEE, EVEN DURING THE REMAND PROCEEDINGS. THUS, AS PE R THE LD. DEPARTMENTAL REPRESENTATIVE, LOWER AUTHORITIES WERE JUSTIFIED IN LEVYING PENALTY U/S.271D OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. THERE ARE TWO TYP ES OF CASH RECEIPTS, WHICH HAVE BEEN SUBJECT OF LEVY OF PENALTY U/S.271D OF THE ACT. FIRST IS WHAT HAVE BEEN CLAIMED BY THE ASSESSEE AS ADVANCE S RECEIVED FROM FOUR CUSTOMERS. DETAILS OF THESE ARE REPRODUCED HE REUNDER:- SL.NO NAME OF THE PERSON (SMT/SHRI.) AMOUNT C 1 M.R. JAYALAKSHMI 12,50,000 2 S. MANOHAR 3,50,000 3 M. ANANDAN 5,00,000 4 K. PADMA 12,66,000 SECOND IS WHAT HAS BEEN CLAIMED BY THE ASSESSEE AS RECEIVED FROM ITS PROMOTERS. DETAILS OF THESE ARE GIVEN HEREUNDER:- ITA NO.1665 /2018 :- 7 -: SL.NO NAME OF THE PERSON (SMT/SHRI.) AMOUNT C 1 A.P. ASHOK KUMAR 43,30,000 2 C. BAMA 9,90,000 3 D. CHINNAKANNU 23,40,000 WHAT WE FIND IS THAT THOUGH LD. ASSESSING OFFICER H AS MENTIONED IN HIS ORDER DATED 28.08.2015, THAT ASSESSEE HAD NOT RES PONDED TO ITS NOTICES DATED 10.2.2015, 19.02.2015 AND 16.03.2015, ASSESSEE HAD INDEED FILED A SUBMISSION BEFORE LD. JOINT COMMISS IONER OF INCOME TAX ON 17.12.2014. RELEVANT PART OF THIS LETTER W HICH DEALS WITH THE ISSUE ON HAND IS REPRODUCED HEREUNDER:- SUB : SUBMISSION OF EXPLANATION - REG ASSESSEE : SPACE N PLACE PROMOTERS PRIVATE LIM ITED, NO.18, V.V. KOIL STREET., PERIAMET, CHENNAI - 600 003. PAN : AAKCS 0817 N/ 2011-12 REF: (1) YOUR NOTICE U/S.271D/ DATED 10.11.20 14. ( 2) YOUR NOTICE U/S.271D I DATED:03.12.2014. IN CONNECTION WITH THE ABOVE, I HUMBLY WISH TO BRING TO YOUR KIND NOTICE THE FOLLOWING POINTS FOR YOUR KIND CONSIDERATION: (1) IN THE BALANCE SHEET OF THE ABOVE ASSESSEE AS AT 31.03.2011 , THERE WERE U NSECURED LOANS OF RS,20.00 LAKHS BORROWED BY THE ABOVE ASSESSEE FROM MR. KETAN CHARUDUTT APTE (PAN ALOPA 6141 P) - RS. 10,00 LAKHS AND FROM MRS. RADHIKA CHARUDUTT APTE [PAN : AKSPA 2701 N] - RS. 10.00 LAKHS - BEING THE OPINION. BALANCES AS AT 01.04.2010 AND NO FRESH LOANS WERE TAKEN BY THE ABOVE ASSESSEE ' DURING THE FINANCIAL YEAR: 2010 - 11 AND NO REPAYMENT OF THE ITA NO.1665 /2018 :- 8 -: ABOVE LOANS WAS MADE DURING THE FINANCIAL YEAR : 2010 - 11 . APART FROM THE ABOVE , THERE WERE NO OTHER UNSECURCD LOANS OR DEPOSITS IN THE BALANCE SHEET AND THE QUESTION OF APPLICABILITY OF THE PROVISIONS OF SEC.269SS AND 269T AND PENAL PROVISIONS OF SEC. 271D DID NOT ARISE IN THIS CASE (2) EVEN IN THE SCRUTINY ASSESSMENT ORDER PASSED B Y THE LEARNED ASSESSING OFFICER DATED 25.03.2014, THERE WAS NO REFERENCE: ABOUT ACCEPTANCE AND REPAYM ENT OF DEPOSITS BY THE ABOVE ASSESSEE IN CASH EXCEPT THE ADDITIONS FOR UNPROVED EXPENDITURE AND ONLY THE PENAL PROCEEDINGS U/S. 271 (1) (C) WERE INITIATED AND NOT ANY OTHER PROCEEDINGS. (3) EVEN IN THE NOTICE U/S.271D SENT BY YOUR OFFICE DATED 10.11.2014, IT WAS ONLY MENTIONED AS HEREUNDER : WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2011-12, IT A PPEARS TO ME THAT YOU: HAVE WITHOUT HAVE CONCEDE THE PARTICULARS OF INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. EVEN IN THE LETTER CITED ABOVE, THERE WAS NO MENTIO N ABOUT THE REASONS FOR WHICH THE PENALTY PROCEEDINGS U/S. 271 D WERE INITI ATED. I WISH TO BRING TO YOUR KIND NOTICE THAT WE HAVE NOT CONCEALED ANY INC OME OR FURNISHED INACCURATE PARTICULARS OF ANY INCOME. IN THIS REGARD, I HUMBLY WISH TO BRING TO YOUR KIND NOTICE THAT SINCE THE ABOVE ASSESSEE DID NOT RECEIVE ANY FRESH LOAN OR DE POSITS AND DID NOT REPAY ANY OLD LOAN DURING THE PREVIOUS YEAR : 2010 - 11 , THE INITIATION OF PENAL PROCEED I NGS DID NOT ARISE AND EVEN YOUR NOTICE CITED ABOVE DID NOT SPECIFY THE REASONS FOR WHICH PENALTY PROCEEDINGS U /S.271D WERE INITIATED. BUT FROM THE DISCUSSIONS DURING THE SCRUTINY HEARIN G PROCEEDINGS, I ASSUME THAT THE PENAL PROCEEDINGS-. U/S. 271 D WOUL D HAVE BEEN INITIATED FOR THE ADVANCES RECEIVED BY THE COMPANY FROM IT'S CUSTOMERS FOR PURCHASE OF UDS SHARE OF LAND AND FOR CONSTRUCTION OF FLAT ON THEIR BEHALF, AND FROM PROMOTERS FOR DAY TO DAY EXPENSES OF THE ASSESSEE COMPANY IN CASH DURING THE PREVIOUS YEAR: 2010 - 11 . IF THE PENALTY PROCEEDINGS WERE INITIATED ONLY FOR THE ABOVE PURPOSE, I HEREBY HUMBLY REQUEST YOUR GOODSELF TO KINDLY CONSI DER THE FOLLOWING FACTS IN THIS REGARD : ( 1 ) ADVANCES RECEIVED FROM CUSTOMERS: (A) NAME: MRS. K. PADMA - RS. 12.66 LAKHS ON 18.03. 2011. NATURE OF BUSINESS: TRADING IN HANDICRAFTS IN MAMAL LAPURAM. PAN: BEJPP 9610 R / TAMBARAM. ITA NO.1665 /2018 :- 9 -: AGE : 71 YEARS. RELATIONSHIP WITH THE ASSESEEE: NO BUSINESS/ PERSON AL RELATIONSHIP WITH THE ASSESSEE - FLAT BOOKED THROUG H COMMON AUDITOR. (B) NAME: MRS. M.R. JAYALAKSHMI - RS. 12.5 LAKHS O N 18.03.2011. NATURE OF BUSINESS: TRADING IN HANDICRAFTS. PAN: AMYPJ 3234 B /TAMBARAM . AGE: 69 YEARS. RELATIONSHIP WITH THE ASSESCEE: NO BUSINESS I PERSONAL RELATIONSHIP WITH THE ASSESSEE - FLAT BOOKED THROUG H COMMON AUDITOR. BOTH THE ABOVE HAVE GIVEN THEIR CONFIRMATION LETTER S INDIVIDUALLY IN RESPECT OF THE ADVANCES GIVEN BY THEM TO THE ASSESSEE COMPA NY DATED : 07.03.2014 ALONGWITH XEROX COPIES OF ACKNOWLEDGEMEN TS AND ANNUAL ACCOUNTS FOR THE YEAR ENDED: 31.03.2011 AND ALSO TH E LEDGER COPY OF THE ASSESSEE IN THEIR BOOKS RESPECTIVELY IN RESPONSE TO THE SUMMONS DATED 03.03.2014 ISSUED TO THEM BY THE LEARNED ASSESSING OFFICER .BE ING AGED SENIOR CITIZENS, THEY WERE NOT ABLE TO APPEAR BEFORE THE L EARNED ASSESSING OFFICER IN PERSON. C) NAME: MR.S.MANOHAR- RS.3.50 LAKHS ON 11.03.201L. NATURE OF BUSINESS: LABOUR CONTRACTS IN PERIAMET. PAN: AHLPM 6169 L / XI (3). RELATIONSHIP WITH THE ASSESEEE: NO BUSINESS / PERSO NAL RELATIONSHIP WITH THE ASSESSEE. (D) NAME: MR. M. ANANDAN - RS.5.00 LAKHS ON 08.03,2 011. NATURE OF BUSINESS: LABOUR CONTRACTS IN PERIAMET. PAN : AAQP A 6963 Q I X ( 1 ). RELATIONSHIP WITH THC ASSESEEE: NO BUSINESS / PERSO NAL RELATIONSHIP WITH THE ASSESSEE. BOTH THE ABOVE HAVE GIVEN THEIR SWORN STATEMENTS IN DIVIDUALLY IN RESPECT OF THE ADVANCES GIVEN BY THEM TO THE ASSESSEE COMPANY ALONGWITH XEROX COPIES OF ACKNOWLEDGEMENTS AND ANNUAL ACCOUNTS FOR THE YEAR ENDED : 31.03,2011 AND ALSO THE LEDGER COPY OF THE ASSESSEE IN THEIR B OOKS RESPECTIVELY DURING THEIR PERSONAL APPEARANCE IN RE SPONSE TO THE SUMMONS ISSUED TO THEM BY THE LEARNED ASSESSING OFFICER . . FROM THE ABOVE IT COULD BE SEEN THAT ALL THE ABOVE PARTIES HAD RESPONDED TO THE SUMMONS ISSUED TO THEM WITHOU T ANY AVOIDANCE AND GIVEN THE PROOF ALONGWITH THEIR INCOME TAX RETURNS RESPECTIVELY WHEREIN THEY HAVE DECLARED THE ADVANCES GIVEN BY THEM TO TH E ASSESSEE COMPANY FOR PURCHASE OF FLATS AND I HUMBLY WISH TO REITERAT E THAT SUCH AMOUNTS WERE ONLY ADVANCES WHICH WILL BE ADJUSTED AGAINST THE CO ST OF THE FLAT AT THE TIME ITA NO.1665 /2018 :- 10 -: OF HANDING OVER TO THEM RESPECTIVELY AND NOT LOANS OR DEPOSITS TO THE COMPANY WHICH CARRY INTEREST . ( 2) ADVANCES RECEIVED FROM PROMOTERS : (A)MR. A.P. ASHOK KUMAR - RS. 20,30,000/- (B)MRS. D. CHINNAKANU - RS. 5,80,000/- ( C) MRS. C. BAMA - RS. 5,80,000 I- ALL THE ABOVE ARE LAND OWNERS AND THE PROMOTERS O F JOINT VENTURE OF CHOOLAIMEDU SITE AND EACH ONE HAD GIVEN AMOUNTS AS AND WHEN REQUIRED BY THE COMPANY FOR DAY TO DAY EXPENSES, LA BOUR PAYMENTS AND FOR OTHER REGULAR CONSTRUCTION ACTIVITIES OF THE COMPAN Y WHENEVER THE FUNDS WERE IN SHORTAGE, AND WHENEVER THE COMPANY HAD EXCESS FUNDS, THE ADVANCES GIVEN BY THE ABOVE PARTIES WILL BE RETURNED TO HIM I HER AND FOR THE TEMPORARY ADVANCES (AS ABOVE), NO INTEREST WILL BE GIVEN BY THE COMPANY. I N THIS REGARD, THE COMPANY HAD TO PAY EACH OF THE ABOVE PERSONS THE AMOUNTS SPECIFIED ABOVE RESPECTIVELY AS AT 31.03.2011. THE ABOVE FACTS ALONGWITH THE LEDGER COPIES OF THE ACCOUNT OF THE ABOVE ASSESSEE IN THE BOOKS OF THE ABOVE PARTIES WERE SUB MITTED TO THE LEARNED ASSESSING OFFICER AT THE TIME OF PERSONAL A PPEARANCE THROUGH THEIR AUTHORIZED REPRESENTATIVE IN RESPONSE TO THE SUMMO N ISSUED TO THEM. IN THIS REGARD , I HUMBLY WISH TO BRING TO YOUR KIN D NOTICE THE FOLLOWING POINTS I FACTS I LEGAL DECISIONS: ( 1) THE OBJECTS OF THE PROVISION 269SS IS TO ENABL E VERIFICATION OF LOANS WITH A VIEW TO TACKLE BLACK MONEY , SO THAT GENUINE TRANSFERS SHOULD NOT ATTRACT PENALTIES. WHERE THE TRANSACTIONS ARE GENUI NE BEYOND ANY POSSIBLE DOUBT , THE PROVISION SHOULD NOT BE APPLIED AS THEY ARE NOT MEANT FOR SUCH CASES. RELEVANCE TO THE ASSESSEE'S CASE: IN THE CASE OF TH E ASSESSEE ,BOTH THE ASSESSEE AND THE CUSTOMERS I PROMOTERS DID NOT HIDE THE ADVANCES AND SHOWN THE ADVANCES RECEIVED AND GIVEN RESPECTIVELY. IN THEIR RESPECTIVE INCOME TAX RETURNS WHICH WERE SUBMITTED TO THE LEAR NED ASSESSING OFFICER. A READING OF THE ABOVE LETTER CLEARLY INDICATE THA T ASSESSEE HAD GIVEN INFORMATION AND PARTICULARS ON THE ADVANCES RECEIVE D FROM ITS ITA NO.1665 /2018 :- 11 -: CUSTOMERS AND MONEY RECEIVED FROM ITS PROMOTERS, WE LL BEFORE THE NOTICES ISSUED ON 10.2.2015, 19.2.2015 AND 16.03.20 15. IT IS NOT DISPUTED BY THE REVENUE THAT THE CUSTOMERS FROM WHO M ASSESSEE CLAIMED RECEIPT OF ADVANCES HAD CONFIRMED IT THROUG H THEIR LETTERS AND ALSO FILED LEDGER COPIES IN RESPONSE TO SUMMONS ISS UED BY LD. ASSESSING OFFICER. TWO OF THEM HAD APPEARED BEFORE LD. ASSESSING OFFICER AND THEIR SWORN STATEMENTS WERE ALSO RECORD ED. IN OUR OPINION THERE WERE SUFFICIENT EVIDENCE AVAILABLE WITH THE LOWER AUTHORITIES, WHICH CLEARLY INDICATED THAT SUMS RECEIVED FROM M.R . JAYALAKSHMI, S. MANOHAR, M. ANANDAN AND K. PADMA WERE NOTHING BUT A DVANCES AGAINST SALE OF FLAT. SECTION 269SS OF THE ACT WAS SUBSTITUTED BY FINANCE ACT, 2015 W.E.F. 01.06.2015. THE SAID SECT ION AS IT STOOD BEFORE 01.06.2015 READ AS UNDER:- 269SS. MODE OF TAKING OR ACCEPTING CERTAIN LOANS AND DEPOSITS NO PERSON SHALL, AFTER THE 30 TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERR ED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY A N ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ELECTR ONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT IF (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGREGAT E AMOUNT OF SUCH LOAN AND DEPOSIT; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR DE POSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SU CH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMEN T HAS FALLEN DUE OR NOT) THE AMOUNT OR THE AGGREGATE AMOUNT REMA INING UNPAID; OR (C) THE AMOUNT OF THE AGGREGATE AMOUNT REFERRED TO IN C LAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT RE FERRED TO IN CLAUSE (B) ITA NO.1665 /2018 :- 12 -: IS TWENTY THOUSAND RUPEES OR MORE . SUBSEQUENT TO ITS SUBSTITUTION, THE CORRESPONDING WORDINGS IN THE SECTION ARE AS UNDER:- NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PER SON (HEREIN REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OR ANY SPECIFIED SUM, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR A CCOUNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CLEARING SYST EM THROUGH A BANK ACCOUNT, IF, (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR SPECIFIED SUM OR THE AGGREGATE AMOUNT OF SUCH LOAN, DEPOSIT AND SPECIFIE D 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), T HE 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 RE FERRED TO IN CLAUSE (B), IS TWENTY THOUSAND RUPEES OR MORE : SPECIFIED SUM HAS BEEN DEFINED THROUGH EXPLANATION (IV) INSERTED BY FINANCE ACT, 2015 W.E.F. 01.06.2015, THE SAID EXPLA NATION READS AS UNDER:- ( IV) SPECIFIED SUM MEANS ANY SUM OF MONEY IN THE N ATURE OF ADVANCE, BY WHATEVER NAME CALLED, IN RELATION TO TR ANSFER OF AN IMMOVABLE PROPERTY, WHETHER OR NOT THE TRANSFER TAK ES PLACE. THUS, IT IS CLEAR THAT ADVANCES OR OTHER RECEIPTS OF MONEY IN RELATION OF TRANSFER OF IMMOVABLE PROPERTY, WHETHER OR NOT SUCH TRANSFER TOOK ITA NO.1665 /2018 :- 13 -: PLACE, CAME WITHIN THE AMBIT OF SECTION 269SS ONLY W.E.F. 01.6.2015. THUS IN OUR OPINION RECEIPTS OF CASH BY THE ASSESSE E AS ADVANCE AGAINST SALE OF FLATS WERE NOT COVERED U/S.269SS OF THE ACT, FOR THE IMPUGNED ASSESSMENT YEAR. 7. COMING TO THE SECOND PART OF THE CASH RECEIPTS RECE IVED FROM THE PROMOTERS OF THE ASSESSEE COMPANY, EXPLANATION GIVEN BY THE ASSESSEE WAS NEVER FOUND TO BE INCORRECT. NOTHIN G HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE RECEIPTS WERE SUPERFLUOUS IN NATURE AND NOT FOR THE BUSINESS OF THE ASSESSEE . HAD IT BEEN SO, IT WOULD HAVE COME OUT IN THE SCRUTINY ASSESSMENT DON E FOR THE IMPUGNED ASSESSMENT YEAR. ADMITTEDLY, THERE WERE N O ADVERSE FINDINGS IN SUCH SCRUTINY. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF IDYAYAM PUBLICATIONS LTD, (SUPRA), HAS CLEARLY HELD THAT CASH TRANSACTIONS IN THE CURRENT ACCOUNT OF A COMPANY WI TH ITS PROMOTERS, WHERE SUCH CURRENT ACCOUNT WAS A RUNNING ONE, COULD NOT BE CONSIDERED AS LOAN OR ADVANCES. THERE IS NO CASE F OR THE REVENUE THAT ASSESSEE HAD NOT PRODUCED LEDGER BEFORE LD. ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THAT THE AC COUNTS OF THE PROMOTERS IN THE BOOKS OF THE ASSESSEE WERE NOT IN THE NATURE OF FUNDS INTRODUCED FOR THE RUNNING OF ITS BUSINESS. HENC E, CONSIDERING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF IDYAYAM PUBLICATIONS LTD (SUPRA), WE ARE OF THE OPINION THAT ADVANCES RECEIVED ITA NO.1665 /2018 :- 14 -: FROM THE PROMOTERS IN CASH THROUGH THEIR RESPECTIV E CURRENT ACCOUNTS COULD NOT BE CONSIDERED AS LOAN OR ADVANCES COMING WITHIN THE AMBIT OF SECTION 269SS OF THE ACT. 8. BASED ON THE DISCUSSIONS IN PARAS 6 AND 7, WE DELE TE THE PENALTY LEVIED ON THE ASSESSEE U/S. 271D OF THE ACT . 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS A LLOWED. ORDER PRONOUNCED ON THURSDAY, THE 21ST DAY OF MAR CH, 2019, AT CHENNAI. SD/- SD/- ( # $! # % . & ) ( DUVVURU RL REDDY ) ( / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:21ST MARCH, 2019. KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF