Shri Hemant Rajnikant Shroff, Surat V. The Addl.CIT, Range-2, Surat

ITA 2481/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1905 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Opportunity of being heard; Period of limitation; Initiation of penalty proceedings; Reasonable cause
• Section: 273B; 143(3); 68; 246; 27; 263; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NOS. 2480 & 2481/AHD/2015 / ASSESSMENT YEAR: 2008-09 MR. HEMANT RAJNIKANT SHROFF, 3/2885, KINNARY CINEMA COMPOUND, SALABATPURA, RING ROAD, SURAT PAN : ABNPS 6743 E VS. THE ADDL. CIT, RANGE-2, SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI ALOK KUMAR, SR. DR. !'# / DATE OF HEARING : 20/01/2016 / DATE OF PRONOUNCEMENT: 01/04/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT, DATED 29.05.2015 PASSED U/S. 271D AND 271E OF THE INCOME-TAX ACT. O RDER U/S. 271D AND 271E OF THE ACT WAS FRAMED ON 28.03.2014 FOR ASSESS MENT YEAR 2008-09 BY THE ACIT, RANGE-2, SURAT. 2. FIRST WE TAKE UP ITA NO.2480/AHD/2015. THE ASS ESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON FACTS, AND IN LAW, THE INITIATION OF PROCEE DINGS U/S 271D ARE TIME- BARRED, INVALID AND VOID AB INITIO. 2. THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRI EVOUSLY ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271D OF THE ACT OF RS.7,50,000/-. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 2 3. BRIEFLY STATED FACTS ARE THAT, DURING THE COURSE OF SCRUTINY ASSESSMENT FOR ASSESSMENT YEAR 2008-09, THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEPOSITED CASH ON VARIOUS DATES AG GREGATING TO RS.7,50,000/- AND WAS UNABLE TO PROVIDE ANY INFORMA TION FOR THE SOURCE OF THE CASH DEPOSITED ON VARIOUS DATES FOR RS.7,50,000 /-. ACCORDINGLY, THE ASSESSING OFFICER MADE ADDITION U/S 68 OF THE ACT F OR UNEXPLAINED CASH CREDIT. THEREAFTER, IN THE COURSE OF APPELLATE PROC EEDINGS BEFORE THE LEARNED CIT(A), IT WAS REVEALED THAT SOURCE OF CASH OF RS.7 ,50,000/- DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IS FROM CASH LOAN TAKE N BY THE ASSESSEE FROM THE SOLE PROPRIETARY CONCERN OF ASSESSEES BROTHER FOR THE PURPOSE OF REPAYMENT OF MONTHLY EMIS/INSTALLMENTS OF VARIOUS P ERSONAL LOANS TAKEN BY THE ASSESSEE FROM VARIOUS BANKS. THE LEARNED CI T(A) IN HIS APPELLATE ORDER HAS MENTIONED THAT ADDITION U/S 68 OF THE ACT SHOULD NOT HAVE BEEN MADE IN THE CASE OF THE ASSESSEE AS THE SOURCE OF C ASH OF RS.7,50,000/- HAS BEEN DULY DISCLOSED BY THE ASSESSEE; HOWEVER, LEARN ED CIT(A) ORDERED FOR INITIATION OF PENALTY PROCEEDINGS U/S 271D OF THE A CT AS THE ASSESSEE HAS MADE CONTRAVENTION TO THE PROVISIONS OF SECTION 269 SS OF THE ACT BY TAKING LOAN EXCEEDING RS.20,000/-, OTHERWISE THAN BY ACCOU NT PAYEE CHEQUE OR DRAFT. THEREAFTER, FOLLOWING THE DECISION OF LEARNE D CIT(A), THE ASSESSING OFFICER WENT AHEAD TO IMPOSE PENALTY U/S 271D OF TH E ACT. 4. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE THE LEA RNED CIT(A) WHICH DID NOT BRING ANY RELIEF TO THE ASSESSEE. AGGRIEVE D ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. FIRST WE TAKE UP GROUND NO.1 RAISED AGAINST THE INITIATION OF PROCEEDINGS U/S 271D OF THE ACT BEING TIME-BARRED. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE PENALT Y U/S 271D PASSED BY THE LEARNED ASSESSING OFFICER IS TIME-BARRED AS PER THE PROVISIONS OF SECTION ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 3 275(1)(C) OF THE ACT, WHICH SAYS THAT NO ORDER IMPO SING A PENALTY CHAPTER SHALL BE PASSED AFTER THE EXPIRY OF THE FINANCIAL Y EAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM T HE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED , WHICHEVER PERIOD EXPIRES LATER. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMI TTED THAT IN THE CASE OF THE ASSESSEE THE ORDER IMPOSING PENALTY U/S 271D HA S BEEN PASSED ON 28.03.2014 AND THE PENALTY ORDER SHOULD HAVE BEEN P ASSED ON OR BEFORE 30.09.2013 AS PER THE PROVISIONS OF SECTION 275(1)( C) OF THE ACT AND THEREFORE, THE ORDER IS INVALID, VOID AND NULL. 5.1 ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESE NTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND FROM THE AVAILABLE RECORD THAT DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT FOR AS SESSMENT YEAR 2008-09 IN THE CASE OF ASSESSEE AN ADDITION OF RS.7,50,000/ - WAS MADE ON ACCOUNT OF UNEXPLAINED CASH, WHICH MEANS THAT DURING THE ASSES SMENT PROCEEDINGS, THE ASSESSEE WAS UNABLE TO PROVIDE ANY INFORMATION ABOU T THE CASH DEPOSITED ON VARIOUS DATES IN HIS BANK ACCOUNT, DUE TO WHICH ADD ITION FOR UNEXPLAINED CASH U/S 68 OF THE ACT WAS MADE BY THE LEARNED ASSE SSING OFFICER. THEREAFTER, THE LEARNED CIT(A), IN ITS ORDER DATED 01.03.2013 PASSED AGAINST THE ORDER U/S 143(3) OF THE ACT, HELD THAT RS.7,50, 000/- WAS RECEIVED FROM M/S. KARAYOG COMMERCIAL CORPORATION, WHICH WAS OWNE D BY THE BROTHER OF THE ASSESSEE AND CASH ON VARIOUS DATES AGGREGATI NG TO RS.7,50,000/- WAS RECEIVED BY THE ASSESSEE AS LOAN AND THIS FACT OF R ECEIVING CASH LOAN BY ASSESSEE FROM HIS BROTHERS SOLE PROPRIETARY CONCER N HAS NOT BEEN CONTROVERTED BY THE ASSESSEE. DUE TO THIS REASON, LEARNED CIT(A) HELD THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE SOURCE OF CASH OF RS.7,50,000/- AND ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 4 NO ADDITION SHOULD BE CALLED FOR U/S 68 OF THE INCO ME-TAX ACT. HOWEVER, AS THE ASSESSEE HAS MADE CONTRAVENTION OF THE PROVISIO NS OF SECTION 269SS OF THE ACT FOR ACCEPTING THE LOAN EXCEEDING RS.20,000/ -, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, P ROCEEDINGS U/S 271D NEED TO BE INITIATED IN THE CASE OF THE ASSESSEE. 6.1 ON THE BASIS OF THE ORDER OF THE LEARNED CIT(A) DATED 01.03.2013, A SHOW-CAUSE NOTICE DATED 19.08.2013 WAS ISSUED BY LE ARNED ASSESSING OFFICER AND SERVED UPON THE ASSESSEE, ASKING TO SHOW-CAUSE AS TO WHY PENALTY U/S 271D OF THE ACT SHOULD NOT BE LEVIED IN THIS CASE A ND THEREAFTER, ORDER U/S 271D WAS FRAMED ON 28.03.2014. 6.2 NOW, WE LOOK INTO THE ASPECT AS TO WHETHER THE PENALTY ORDER U/S 271D WAS TIME-BARRED OR NOT. WE WILL FIRST GO THRO UGH THE PROVISIONS OF SECTION 275 OF THE ACT, WHICH READ AS UNDER:- 275. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED (A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTH ER ORDER IS THE SUBJECT- MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) UN DER SECTION 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE T RIBUNAL UNDER SECTION 253, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHIC H THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALT Y HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE END OF THE MO NTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE [PRINCIPAL CHIEF COMMI SSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISS IONER, WHICHEVER PERIOD EXPIRES LATER : PROVIDED THAT IN A CASE WHERE THE RELEVANT ASSESSMENT OR OT HER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) UNDER SECTION 246 OR SECTION 246A, AND THE COMMISSI ONER (APPEALS) PASSES THE ORDER ON OR AFTER THE 1ST DAY OF JUNE, 20 03 DISPOSING OF SUCH APPEAL, AN ORDER IMPOSING PENALTY SHALL BE PASSED B EFORE THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COU RSE OF WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPL ETED, OR WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH TH E ORDER OF THE COMMISSIONER (APPEALS) IS RECEIVED BY THE [PRINCIPAL CHIEF ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 5 COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL CO MMISSIONER OR] COMMISSIONER, WHICHEVER IS LATER; (B) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTH ER ORDER IS THE SUBJECT- MATTER OF REVISION UNDER SECTION 263 OR SECTION 264 , AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH SUCH ORDE R OF REVISION IS PASSED; (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FIN ANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FR OM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER. (1A) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTHE R ORDER IS THE SUBJECT- MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) UN DER SECTION 246 OR SECTION 246A OR AN APPEAL TO THE APPELLATE T RIBUNAL UNDER SECTION 253 OR AN APPEAL TO THE HIGH COURT UNDER SECTION 26 0A OR AN APPEAL TO THE SUPREME COURT UNDER SECTION 261 OR REVISION UND ER SECTION 263 OR SECTION 264 AND AN ORDER IMPOSING OR ENHANCI NG OR REDUCING OR CANCELLING PENALTY OR DROPPING THE PROCEEDINGS FOR THE IMPOSITION OF PENALTY IS PASSED BEFORE THE ORDER OF THE COMMISSIO NER (APPEALS) OR THE APPELLATE TRIBUNAL OR THE HIGH COURT OR THE SUPREME COURT IS RECEIVED BY THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMM ISSIONER OR THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER OR THE ORDER OF REVISION UNDER SECTION 263 OR SECTION 264 IS PASSED, AN ORDE R IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROP PING THE PROCEEDINGS FOR THE IMPOSITION OF PENALTY MAY BE PASSED ON THE BASIS OF ASSESSMENT AS REVISED BY GIVING EFFECT TO SUCH ORDER OF THE COMMI SSIONER (APPEALS) OR, THE APPELLATE TRIBUNAL OR THE HIGH COURT, OR THE SU PREME COURT OR ORDER OF REVISION UNDER SECTION 263OR SECTION 264: PROVIDED THAT NO ORDER OF IMPOSING OR ENHANCING OR REDUCING OR CANCELLING PENALTY OR DROPPING THE PROCEEDINGS FOR THE IMPOSITION OF PENALTY SHALL BE PASSED (A) UNLESS THE ASSESSEE HAS BEEN HEARD, OR HAS BEE N GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD; (B) AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) OR THE APPELLATE TRIBUNAL OR THE HIGH COURT OR THE SUPREME COURT IS RECEIVED BY THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR THE [PRINCIP AL COMMISSIONER OR] COMMISSIONER OR THE ORDER OF REVISI ON UNDER SECTION 263 OR SECTION 264 IS PASSED: PROVIDED FURTHER THAT THE PROVISIONS OF SUB-SECTION (2) OF SECTION 274 SHALL APPLY IN RESPECT OF THE ORDER IMPOSING OR ENHANCING OR REDUCING PENALTY UNDER THIS SUB-SECTION. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 6 (2) THE PROVISIONS OF THIS SECTION AS THEY STOOD IMM EDIATELY BEFORE THEIR AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 (4 OF 1988), SHALL APPLY TO AND IN RELATION TO ANY ACTION INITIATED FOR THE IMPOSITION OF PENALTY ON OR BEFORE THE 31ST DAY OF MARCH, 1989. EXPLANATION.IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURPOSES OF THIS SECTION, (I) THE TIME TAKEN IN GIVING AN OPPORTUNITY TO TH E ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129; (II) ANY PERIOD DURING WHICH THE IMMUNITY GRANTED UNDER SECTION 245H REMAINED IN FORCE; AND (III) ANY PERIOD DURING WHICH A PROCEEDING UNDER THI S CHAPTER FOR THE LEVY OF PENALTY IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, SHALL BE EXCLUDED. FROM GOING THROUGH THE ABOVE PROVISIONS OF SECTION 275, WE FIND THAT THE RELEVANT PORTION WHICH IS APPLICABLE IN THIS CA SE IS PROVISO TO SECTION 275(1)(A) WHICH SAYS THAT IF THE RELEVANT ASSESSMEN T OR OTHER ORDER IS THE SUBJECT-MATTER OF AN APPEAL TO THE COMMISSIONER (AP PEALS) UNDER SECTION 246 OR SECTION 246A , AND THE COMMISSIONER (APPEALS ) PASSES THE ORDER ON OR AFTER THE 1 ST DAY OF JUNE, 2003 DISPOSING OF SUCH APPEAL, AN ORDE R IMPOSING PENALTY SHALL BE PASSED BEFORE THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTIO N FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR WITHI N ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE COM MISSIONER (APPEALS) IS RECEIVED BY THE PRINCIPAL CHIEF COMMISSIONER OR CH IEF COMMISSIONER, WHICHEVER IS LATER. APPLYING THE FACTS OF THE CASE OF THE ASSESSEE, WE FIND THAT THE TWO CRUCIAL DATES BEFORE WHICH THE PENALTY ORDER U/S 271D COULD HAVE BEEN PASSED BY THE ASSESSING OFFICER, FIRSTLY CAN BE CALCULATED FROM THE DATE OF INITIATION OF SHOW-CAUSE NOTICE, I.E., 19.0 8.2013 WHICH WILL END UP ON 31.03.2014 BEING EXPIRY OF FINANCIAL YEAR IN WHICH THE PROCEEDINGS U/S 271D HAVE BEEN INITIATED AND SECOND DATE CAN BE CALCULAT ED ON THE BASIS OF COMPLETION OF ONE YEAR FROM THE END OF THE FINANCIA L YEAR IN WHICH THE ORDER OF CIT(A) IS RECEIVED, WHICH IN THIS CASE THE ORDER OF THE CIT(A) IN WHICH THE ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 7 PROCEEDINGS U/S 271D HAVE BEEN INITIATED IS DATED 0 1.03.2013 AND ONE YEAR FROM THE END OF FINANCIAL YEAR IN WHICH THIS ORDER IS PASSED WILL COMPLETE ON 31.03.2014. SO, APPLYING THIS PROVISO, WE FIND THA T THE LAST DATE BEFORE WHICH THE PENALTY ORDER U/S 271D COULD HAVE BEEN PASSED B Y THE REVENUE WAS 31.03.2014 AND THE DATE OF PASSING THE ORDER U/S 27 1D OF THE ACT IS 28.03.2014, WHICH IS WELL WITHIN THE TIME LIMIT PRE SCRIBED UNDER THE PROVISIONS OF SECTION 275(1)(A) OF THE ACT. WE ARE, THEREFORE, OF THE VIEW THAT THE ORDER U/S 271D IS NOT TIME-BARRED AND IS VALID. WE, THEREFORE, DISMISS FIRST GROUND OF THE APPEAL OF THE ASSESSEE. 7. NOW, WE TAKE UP GROUND NO.2 RAISED BY THE ASSESS EE AGAINST THE ACTION OF THE LEARNED CIT(A) FOR CONFIRMING THE PEN ALTY U/S 271D OF THE ACT OF RS.7,50,000/- IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT. 7.1 ON GOING THROUGH THE RECORDS PLACED BEFORE US, WE FIND THAT THE ASSESSEE HIMSELF HAS SUBMITTED THE DATE-WISE DETAIL S ON WHICH CASH LOANS HAVE BEEN RECEIVED AGGREGATING TO RS.7,50,000/- FRO M M/S. KARMAYOG COMMERCIAL CORPORATION, WHICH IS A SOLE PROPRIETARY CONCERN OWNED BY THE ASSESSEES BROTHER. THE ASSESSEE HAS ALSO ACCEPTED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE APPELLATE PROCEED INGS BEFORE THE LEARNED CIT(A) THAT THESE TRANSACTIONS ARE NOT RELATED TO A NY PURCHASE/SALE OF GOODS, RATHER THESE ARE PETTY CASH LOANS TAKEN ON VARIOUS DATES IN ORDER TO DEPOSIT IN HIS BANK ACCOUNT FOR CLEARING VARIOUS EMI OF PER SONAL LOANS TAKEN BY HIM. DURING THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES , THE ASSESSEE HAS REQUESTED TO GRANT HIM IMMUNITY FROM THE PROVISION OF SECTION 271D ON THE GROUND THAT THERE WAS A REASONABLE CAUSE AS PROVIDE D IN PROVISIONS OF SECTION 273B OF THE ACT, BECAUSE THE ASSESSEE HAS T AKEN CASH LOAN FROM HIS OWN BROTHER. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 8 7.2 THE ASSESSEE COULD NOT GET ANY RELIEF BEFORE TH E LEARNED CIT(A) WHO HAS CONFIRMED THE PENALTY U/S 271D. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE LEARNED CIT(A) HAS OBSERVE D AS UNDER WHILE SUSTAINING THE PENALTY U/S 271D OF THE ACT:- 6.2.1 THE GROUNDS OF APPEAL- GROUND HO. 2 PERTAINS TO LEVYING PENALTY OF RS. 7,50,000/- UNDER THE PROVISION OF SECTION 271D OF THE INCOME TAX ACT 1961 FOR CONTRAVENTION OF PROVISION OF SECTION 269S S BEING CASH FUNDS TAKEN BY APPELLANT FROM HIS BROTHER. THE AO FOUND THAT TH E APPELLANT HAS REPAID CASH LOAN/DEPOSITS OF AMOUNTS ABOVE RS. 20,0007- FR OM KARAMYOG COMMERCIAL CORPORATION OF RS. 7,50,000/- IN CONTRAV ENTION OF PROVISIONS OF SEC. 269SS OF THE ACT. THE AO HELD THAT THE APPELLANT HAD TAKEN LOAN IN CASH AND HAD REPAID IN CASH ATTRACTING THE PROVISIONS OF SEC. 269SS AND 269T OF THE ACT. THE AO LEVIED THE PENALTY OF RS. 7,50,000/- U/S 271D OF THE ACT. THE APPELLANT SUBMITTED THAT THE M/S KARAMYOG COMME RCIAL CORPORATION IS A PROPRIETARY CONCERN OF APPELLANT'S BROTHER AND TH E FUNDS IN CASH OF RS.7,50,000/- WERE TAKEN ON DIFFERENT DATES FOR THE REPAYMENT OF EMI/INSTALLMENT OF THE VARIOUS PERSONAL LOANS TAKEN BY THE APPELLANT FROM VARIOUS BANKS. THE CASH AMOUNT WAS TAKEN TO MAKE TH E REPAYMENTS FROM HIS BROTHER AND THEREFORE HIS ACTION OF TAKING CASH LOA NS FALLS UNDER THE CATEGORY OF THE REASONABLE CAUSE U/S 273B OF THE ACT. ON THE PERUSAL OF THE DETAILS IT IS OBSERVED THAT THE APPELLANT HAD TAKEN CASH DEPOSITS /LOANS FROM MS/ KARAMYOG COMMERCIAL CORPORATION MORE THAN RS. 20,00 0/- ON DIFFERENT DATES AGGREGATING TO RS. 7,50,000/-. THE APPELLANT HIMSELF HAS ACCEPTED THIS FACT OF CASH DEPOSITS/LOANS IN THE SUBMISSIONS MADE DURING THE ASSESSMENT PROCEEDINGS AS WELL AS THE APPELLATE PROCEEDINGS. T HE DETAILS OF THE TRANSACTIONS AS GIVEN IN THE CONFIRMATION LETTER WH ILE SHOWING THE DEBIT SIDE OF THE ACCOUNT HAS MENTIONED THE CASH TRANSACTION A S 'UDHAR' WHICH MEANS LOANS. THE APPELLANT HAS NOT MENTIONED ANY BUSINESS CONNECTION WITH M/S KARAMYOG COMMERCIAL CORPORATION IN RESPECT OF THESE TRANSACTIONS. THE PROVISIONS OF SEC. 271D ARE CLEARLY ATTRACTED. IT I S NO DOUBT TRUE THAT THE HEADING OF CHAPTER XX-B PROVIDES THAT THE SECTIONS IN THIS CHAPTER ARE TO COUNTERACT THE EVASION OF TAX. AT THE SAME TIME, IT IS EQUALLY TRUE THAT NOWHERE IN THE BODY OF SECTION 269SS OR OTHER SECTI ONS FALLING IN THIS CHAPTER HAS IT BEEN PROVIDED THAT IF THE TRANSACTIONS ARE F OUND TO BE GENUINE THEN THE PROVISIONS OF THESE SECTIONS WOULD NOT APPLY. THE M ARGINAL NOTE ONLY INDICATES THE INTENTION OF THE LEGISLATURE AND CANN OT OVERRIDE THE CLEAR LANGUAGE INCORPORATED IN THE SECTIONS. IT IS WELL-S ETTLED THAT WHILE INTERPRETING THE PROVISIONS OF SECTION THE MARGINAL NOTE IS NOT DECISIVE AND ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 9 CANNOT RUN CONTRARY TO SUBSTANTIVE PROVISIONS CONTA INED THEREIN. ONLY IN CASE OF DOUBT, THE HEADING CAN BE CONSIDERED AS AID FOR CONSTRUCTION. 6.2.2 IN THE LIGHT OF THIS LEGAL POSITION, IT IS N OTED THAT THERE IS NO AMBIGUITY IN THE LANGUAGE OF SECTION 269SS AND, THEREFORE, TH E PROVISIONS OF SECTION 269SS ARE NOT ONLY TO COUNTERACT THE EVASION OF TAX BUT ALSO TO REGULATE CERTAIN TRANSACTIONS OF MONEY IN A SPECIFIED FORM. IF THE CONTENTION OF THE APPELLANT THAT NO PENALTY IS EXIGIBLE BECAUSE GENUI NENESS OF TRANSACTION WAS NOT DOUBTED IS ACCEPTED, IT WOULD LEAD TO ANOMALOUS RESULTS. IT IS IMPORTANT TO BEAR IN MIND THAT SECTION 269SS IS NOT TO JUDGE THE GENUINENESS OR OTHERWISE OF THE CREDIT ENTRIES APPEARING IN ACCOUNT & BOOKS. FOR THIS PURPOSE THE PROVISIONS OF SECTION 68 HAVE BEEN INCORPORATED WHI CH DEAL WITH UNEXPLAINED CREDITS APPEARING IN APPELLANT'S BOOKS OF ACCOUNT. THE PROVISION OF SECTION 269SS ARE IN ADDITION TO SECTION 68 AND NOT SUBSTIT UTE OF IT. BOTH SECTIONS HAVE THEIR OWN SEPARATE FIELD TO OPERATE IN. WHEN A TRANSACTION OF TAKING LOAN OR DEPOSIT FROM A PERSON IS HELD TO BE INGENUINE, O BVIOUSLY THE ISSUE WOULD CLOSE AT THE APPLICABILITY OF SECTION 68 ITSELF. ON THE CONTRARY, SECTION 269SS DOES NOT DEAL WITH THE GENUINENESS OR OTHERWISE OF THE LOANS AND DEPOSITS ACCEPTED BY THE APPELLANT BUT IT ONLY REQUIRES THE REGULATION OF LOANS AND DEPOSITS IN A SPECIFIC MANNER EXCEEDING A SPECIFIED LIMIT. THEREFORE, THE APPELLANT HAS TO SHOW THE REASONABLE CAUSE FOR RECE IVING THE AMOUNT BY WAY OF CASH AND WHAT IS THE REASON FOR NOT RECEIVING TH E DEPOSIT BY WAY OF ACCOUNT PAYEE CHEQUE OR BANK DRAFT. IF THERE IS A REASONABL E CAUSE FOR ACCEPTING THE DEPOSITS IN THE FORM OF CASH, THEN ONLY THE APPELLA NT COULD BE EXONERATED FROM THE LEVY OF PENALTY UNDER SECTION 271 D. THE APPELL ANT WAS UNABLE TO EXPLAIN ANY REASONABLE CAUSE FOR ACCEPTING THE DEPOSITS IN THE FORM OF CASH. IN THE ABSENCE OF ANY PROOF TO SHOW THAT THERE EXISTED A R EASONABLE CAUSE FOR RECEIVING THE AMOUNT IN CASH, IT IS NOT POSSIBLE TO COME TO THE CONCLUSION THAT THE APPELLANT IS NOT LIABLE FOR PAYMENT OF PENALTY. THE BURDEN IS ON THE APPELLANT TO PROVE THAT THERE WAS REASONABLE CAUSE FOR RECEIVING THE DEPOSITS BY WAY OF CASH FROM THE VARIOUS PERSONS. 6.2.3 THERE IS A DIFFERENCE BETWEEN THE EXPRESSIONS 'GENUINE AND BONAFIDE TRANSACTION' AND THE 'REASONABLE CAUSE' FOR NOT COM PLYING WITH THE PROVISIONS OF SECTION 269SS TO AVOID PENALTY PROCEE DING UNDER SECTION 271 D. THE TRANSACTION MAY BE GENUINE AND BONAFIDE BUT MAY STILL VIOLATE THE PROVISIONS OF SECTION 269SS. THE LEGISLATURE HAS PR OVIDED FOR RELAXING THE RIGOUR OF TECHNICAL BREACH BY GIVING AN OPPORTUNITY TO THE APPELLANT TO SHOW THAT THERE WAS A REASONABLE CAUSE FOR NOT COMPLYING WITH THE PROVISIONS OF SECTION 269SS. IN THE PRESENT CASE, CLEAR FINDINGS HAVE BEEN RECORDED BY THE AO THAT THE APPELLANT COULD NOT ESTABLISH THE REASON FOR CASH LOANS AS A REASONABLE CAUSE FOR NON-COMPLIANCE OF SECTION 269S S OF THE ACT. THE SUPREME COURT IN ASSTT. DIRECTOR OF INSPECTION (INVE STIGATION) V. KUM. A.B. SHANTHI [2002] 255 ITR 258 (SC), WHILE UPHOLDING THE CONSTITUTIONAL VALIDITY OF SECTIONS 269SS AND 271D, HELD AS UNDER: . ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 10 'THE NEW SECTION 271D PROVIDES ONLY FOR FINE EQUAL TO THE AMOUNT OF LOAN OR DEPOSIT TAKEN OR ACCEPTED. IT IS IMPORTANT TO NO TE THAT ANOTHER PROVISION, NAMELY SECTION 273B WAS ALSO INCORPORATED WHICH PRO VIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISION S OF SECTION 271 D, NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE APPELLANT, AS THE CASE MAYBE, FOR ANY FAILURE REFERRED TO IN THE SAID PROV ISION IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR SUCH FAILURE AND IF THE APPELLANT PROVES THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO TAKE A LO AN OTHERWISE THAN BY ACCOUNT-PAYEE CHEQUE OR ACCOUNT-PAYEE DEMAND DRAFT, THEN THE PENALTY MAY NOT BE LEVIED. THEREFORE, UNDUE HARDSHIP IS VER Y MUCH MITIGATED BY THE INCLUSION OF SECTION 273B IN THE ACT. IF THERE W AS A GENUINE AND BONA FIDE TRANSACTION AND IF FOR ANY REASON THE TAXPAYER COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT-PAYEE CHEQUE OR DEMAND DRAFT FOR SOME BONA FIDE REASONS, THE AUTHORITY VESTED WITH THE POWER TO IMP OSE PENALTY HAS GOT DISCRETIONARY POWER. IN THAT VIEW OF THE MATTER, WE DO NOT THINK THAT SECTION 269SS OR 271D OR THE EARLIER SECTION 276DD IS UNCONSTITUTIONAL ON THE GROUND THAT IT WAS DRACONIAN OR EXPROPRIATOR Y IN NATURE.' 6.2.4 THE ABOVE EXTRACT GIVES US A KEY TO THE UNDER STANDING OF SECTION 273B OF THE SAID ACT. THE SUPREME COURT OBSERVED THAT (1) IF THERE WAS A GENUINE AND BONA FIDE TRANSACTION AND (2) IF FOR ANY REASON THE TAXPAYER COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT-PAYEE CHEQUE OR DEMAND DRAFT FOR SOME BONA FIDE REASONS, THE AUTHORITY VESTED WITH THE POWER TO IMP OSE PENALTY HAS GOT DISCRETIONARY POWER. THE EXISTENCE OF A GENUINE OR BONA FIDE TRANSACTION IS NOT SUFFICIENT TO ATTRACT THE RELIEF UNDER SECTION 273B OF THE SAID ACT. IT MUST ALSO BE ESTABLISHED THAT FOR SOME BONA FIDE REASONS THE APPELLANT COULD NOT GET A LOAN OR DEPOSIT BY AN ACCOUNT PAYEE CHEQUE OR ACC OUNT PAYEE BANK DRAFT. IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SHO W THAT THERE WERE BONA FIDE REASONS FOR NOT ACCEPTING THE SAID AMOUNTS THROUGH ACCOUNT PAYEE CHEQUES OR ACCOUNT. THE APPELLANT HAS RELIED ON VARIOUS DECISI ONS TO SHOW THAT PENALTY NOT BE LEVIED IN THE APPELLANT'S CASE BUT THOSE DEC ISIONS ARE DELIVERED ON THEIR OWN FACTS AND THOSE DECISIONS HAVE NO APPLICATION T O THE CASE OF THE APPELLANT. THE FOLLOWING DECISIONS HAVE UPHELD THE ISSUE OF IM POSITION OF PENALTY IN ABSENCE OF ANY REASONABLE CAUSE : HILNDALCO EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD ., [ 2014 ] 49 TAXMANN.COM 309 (COCHIN - TRIB.) CHARAN DASS ASHOK KUMAR, 52 TAXMANN.COM 424 (P & H) SOUNDARYA TEXTILES, 362 ITR 488 (KERALA) K.V. GEORGE [2014] 42 TAXMANN.COM 261 (KERALA) MAHAK SINGH [2013] 37 TAXMANN.COM 390 (ALLAHABAD) 6.2.5 IN VIEW OF THE ABOVE FACTS THE PENALTY IMPOSE D BY THE AO U/S 271D OF THE ACT IS UPHELD AND THE GROUND OF APPEAL IS DISMIS SED. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 11 6.3.1 THE GROUNDS OF APPEAL- GROUND NO. 3 PERTAINS TO IS LEVYING PENALTY U/S 271D WITHOUT GIVING IMMUNITY U/S 273B AND WITHOUT P ROPERLY CONSIDERING THE 'REASONABLE CAUSES FOR REQUISITES OF SUCH CASH FUNDS FROM BROTHER' DULY SUBMITTED BY APPELLANT AS STIPULATED UNDER PROVISIO NS OF SECTION 273B. THE APPELLANT HAS NOT BEEN ABLE TO DEMONSTRATE ANY REAS ONABLE CAUSE BEFORE THE AO DURING THE PENALTY PROCEEDINGS AS ENVISAGED IN TH E PROVISIONS OF SEC. 273B OF THE ACT. THE APPELLANT HAS NOT BEEN ABLE TO DEMONSTRATE THAT WHAT CIRCUMSTANCES PREVENTED HIM FROM TAKING THESE LOANS /DEPOSITS BY ACCOUNT PAYEE CHEQUES IF THE PURPOSE AS CLAIMED WAS MAKE PA YMENTS TOWARDS INSTALLMENTS. THE APPELLANT WAS MAINTAINING BANK AC COUNT AND THE LOANS/DEPOSITS COULD HAVE BEEN TRANSFERRED IN THESE ACCOUNTS. BUT NO REASON HAS BEEN PROVIDED BY THE APPELLANT DURING THE ASSES SMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS. THIS ISSUE HAS ALREADY BE EN DEALT IN DETAIL WHILE ADJUDICATING GROUND OF APPEAL NO.2. THE CLAIM OF TH E APPELLANT DOES NOT ATTRACT THE PROVISIONS OF SEC. 273B OF THE ACT AND T HEREFORE THE GROUND OF APPEAL IS DISMISSED. 8.1 WE FURTHER FIND THAT PROVISIONS OF SECTION 269 SS OF THE ACT ARE SQUARELY APPLICABLE ON THE CASH LOAN TRANSACTIONS M ADE BY THE ASSESSEE BY WAY OF TAKING CASH LOANS FROM HIS BROTHERS PROPRIE TARY CONCERN M/.S KARAMYOG COMMERCIAL CORPORATION. FURTHER, THE LEARN ED AUTHORIZED REPRESENTATIVES CONTENTION THAT THE ASSESSEE SHOUL D BE GIVEN IMMUNITY FROM THE HARSH PROVISIONS OF SECTION 271D BY COVERI NG HIM U/S 273B OF THE ACT AS THE ASSESSEE HAS REASONABLE CAUSE FOR THE SA ID FAILURE. WE CANNOT AGREE WITH THIS CONTENTION BECAUSE THE ASSESSEE AND HIS BROTHER, BOTH ARE HAVING THEIR BANK ACCOUNTS IN SURAT CITY AND BOTH O F THEM ARE NOT AGRICULTURISTS. THEY ARE REGULARLY FILING THEIR RE TURN OF INCOME. THEREFORE, THERE CANNOT BE ANY REASONABLE CAUSE FOR SUCH FAILU RE. IN THESE CIRCUMSTANCES, THERE DO NOT SEEM TO BE ANY WAY OUT FOR THE ASSESSEE TO GET AWAY FROM THE PENALTY U/S 271D AND THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) A ND ACCORDINGLY, WE DISMISS THIS GROUND OF THE ASSESSEE. 9. GROUND NO.3 IS GENERAL IN NATURE. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 12 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 11. NOW, WE TAKE UP ITA NO.2481/AHD/2015. THE GROU ND NO.1 RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- THAT ON FACTS, AND IN LAW, THE INITIATION OF PROCEE DINGS U/S 271E ARE TIME- BARRED, INVALID AND VOID AB INITIO. 12. WE HAVE ALREADY DEALT WITH THIS ISSUE IN ITA NO .2480/AHD/2015, WHEREIN WE HAVE DEALT WITH THE ISSUE THAT PENALTY O RDER FRAMED U/S 271D OF THE ACT WAS NOT TIME-BARRED AND IN THIS APPEAL THE ISSUE IS WITH REGARD TO PENALTY U/S 271E OF THE ACT, IMPOSED FOR CONTRAVENT ION OF PROVISIONS OF SECTION 271E OF THE ACT FOR REPAYMENT OF LOAN EXCEE DING RS.20,000/-, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUN T PAYEE BANK DRAFT. WE HAVE HELD IN THE APPEAL, I.E., ITA NO.2480/AHD/2 015, THAT THE PENALTY ORDER U/S 271D WAS NOT TIME-BARRED AND SAME DECISIO N TO BE APPLIED FOR THIS GROUND ALSO AND ACCORDINGLY, WE FIND THAT ORDE R U/S 271E FRAMED BY THE ASSESSING AUTHORITY IS NOT TIME BARRED AND ACCO RDINGLY, WE DISMISS THIS GROUND OF THE ASSESSEE. 13. NOW, WE TAKE UP GROUND NO.2, WHICH READS AS UND ER:- THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRI EVOUSLY ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271E OF THE ACT OF RS.5,13,440/-. 14. PENALTY U/S 271E OF THE ACT WAS FRAMED BY THE A SSESSING AUTHORITY FOR REPAYMENT OF LOAN IN CASH ON VARIOUS DATES AGGREGAT ING TO RS.5,13,440/- BY ASSESSEE IN ORDER TO REPAY THE LOAN TAKEN FROM M/S. KARMAYOG COMMERCIAL CORPORATION. 14.1 APPEAL BEFORE THE LEARNED CIT(A) COULD NOT BRI NG ANY RELIEF TO THE ASSESSEE. ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 13 14.2 AGGRIEVED THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IN THIS CASE BEFORE US FOR A DJUDICATION IS WHETHER THE ASSESSEE SHOULD BE VISITED WITH PENALTY U/S 271E FO R REPAYMENT OF LOAN IN CASH OF RS.5,13,440/-. FROM THE PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE HAS SUBMITTED LEDGER ACCOUNT OF M/S. KARMAYOG COMME RCIAL CORPORATION FOR THE FINANCIAL YEAR 2007-08 WHICH IS APPEARING A T PAGE NOS. 27 & 28 OF THE PAPER-BOOK. FROM GOING THROUGH THE LEDGER ACCOU NT, WE FIND THAT AS ON 01.04.2007 THERE IS A CREDIT BALANCE OF RS.18,32,30 5.50 IN THE NAME OF M/S. KARMAYOG COMMERCIAL CORPORATION IN THE BOOKS OF ASS ESSEE AS ON 01.04.2007, WHICH MEANS THAT M/S. KARMAYOG COMMERCI AL CORPORATION WAS STANDING IN THE BOOKS OF ASSESSEE UNDER THE CATEGOR Y OF UNSECURED LOANS. THEREAFTER, DURING THE FINANCIAL YEAR 2007-08, THE ASSESSEE HAS TAKEN CASH LOANS ON VARIOUS DATES WHICH AGGREGATED TO RS.7,50, 000/- AND WE HAVE ALREADY DECIDED BY SUSTAINING THE PENALTY U/S 271D OF THE ACT IMPOSED BY THE ASSESSING AUTHORITY FOR CASH LOAN TAKEN IN CONT RAVENTION OF PROVISIONS OF SECTION 269SS OF THE ACT. THEREAFTER, WHEN WE GO T HROUGH THE LEDGER ACCOUNT, WE FIND THAT AS ON 30.09.2007 THE ASSESSEE TOOK A CASH LOAN OF RS.50,000/- AND WAS LEFT WITH A CREDIT BALANCE OF R S.22,78,305.50 IN THE NAME OF M/S. KARMAYOG COMMERCIAL CORPORATION AND THEREAF TER, THERE WERE SERIES OF DEBIT ENTRIES WHICH TURNED THE CREDIT BAL ANCE OF M/S. KARMAYOG COMMERCIAL CORPORATION INTO DEBIT BALANCE AND AS ON 23.10.2007, THE DEBIT BALANCE OF M/S. KARMAYOG COMMERCIAL CORPORATION WAS STANDING AT RS.42,57,194.50; WHICH MEANS THAT THE CATEGORY OF M /S. KARMAYOG COMMERCIAL CORPORATION HAS CHANGED FROM UNSECURED L OANS TAKEN TO THE CATEGORY OF LOANS AND ADVANCES GIVEN. THE ASSESSEE HAS STARTED PAYING CASH FROM 31.12.2007 AND ALL THROUGH THE PERIOD WHEN THE CASH PAYMENT OF RS.5,13,440/- WAS MADE TO M/S. KARMAYOG COMMERCIAL CORPORATION, THE ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 14 CATEGORY OF M/S. KARMAYOG COMMERCIAL CORPORATION RE MAINED PERSISTENTLY UNDER THE CURRENT ASSETS CATEGORY OF LOANS AND ADVA NCES GIVEN, BECAUSE THE BALANCE NEVER TURNED TO CREDIT SIDE. HERE, IN THIS SITUATION, BEFORE GOING FURTHER, LET US EXAMINE THE PROVISIONS OF SECTION 2 69T OF THE ACT, WHICH READ AS UNDER:- 269T. NO BRANCH OF A BANKING COMPANY OR A CO-OPERATIVE BA NK AND NO OTHER COMPANY OR CO-OPERATIVE SOCIETY AND NO FIRM OR OTHE R PERSON SHALL REPAY ANY LOAN OR DEPOSIT MADE WITH IT [ OR ANY SPECIFIED ADVANCE RECEIVED BY IT ] OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUN T PAYEE BANK DRAFT DRAWN IN THE NAME OF THE PERSON WHO HAS MADE THE LO AN OR DEPOSIT [ OR PAID THE SPECIFIED ADVANCE, ] [OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT] IF (A) THE AMOUNT OF THE LOAN OR DEPOSIT [ OR SPECIFIED ADVANCE ] TOGETHER WITH THE INTEREST, IF ANY, PAYABLE THEREON, OR (B) THE AGGREGATE AMOUNT OF THE LOANS OR DEPOSITS HELD BY SUCH PERSON WITH THE BRANCH OF THE BANKING COMPANY OR CO-OPERATIVE B ANK OR, AS THE CASE MAY BE, THE OTHER COMPANY OR CO-OPERATIVE SOCIETY O R THE FIRM, OR OTHER PERSON EITHER IN HIS OWN NAME OR JOINTLY WITH ANY O THER PERSON ON THE DATE OF SUCH REPAYMENT TOGETHER WITH THE INTEREST, IF ANY, PAYABLE ON SUCH LOANS OR DEPOSITS, [ OR ] [ (C) THE AGGREGATE AMOUNT OF THE SPECIFIED ADVANCES R ECEIVED BY SUCH PERSON EITHER IN HIS OWN NAME OR JOINTLY WITH ANY OTHER PE RSON ON THE DATE OF SUCH REPAYMENT TOGETHER WITH THE INTEREST, IF ANY, PAYABLE ON SUCH SPECIFIED ADVANCES, ] IS TWENTY THOUSAND RUPEES OR MORE: PROVIDED THAT WHERE THE REPAYMENT IS BY A BRANCH OF A BANKIN G COMPANY OR CO-OPERATIVE BANK, SUCH REPAYMENT MAY ALSO BE MADE BY CREDITING THE AMOUNT OF SUCH LOAN OR DEPOSIT TO THE SAVINGS BANK ACCOUNT OR THE CURRENT ACCOUNT (IF ANY) WITH SUCH BRANCH OF THE PERSON TO W HOM SUCH LOAN OR DEPOSIT HAS TO BE REPAID : PROVIDED FURTHER THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO REPAYMENT OF ANY LOAN OR DEPOSIT [ OR SPECIFIED ADVANCE ] TAKEN OR ACCEPTED FROM (I) GOVERNMENT; (II) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO-OPERATIVE BANK; (III) ANY CORPORATION ESTABLISHED BY A CENTRAL, STAT E OR PROVINCIAL ACT; (IV) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 61 7 OF THE COMPANIES ACT, 1956 (1 OF 1956); ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 15 (V) 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 GAZETTE. 15.1 FROM GOING THROUGH THE ABOVE PROVISIONS OF SEC TION 269T, WE FIND THAT THIS SECTION IS APPLICABLE ONLY ON REPAYMENT O F ANY LOAN OR DEPOSIT TAKEN BY THE ASSESSEE AND LOOKING TO THE FACTS OF T HE CASE, WE FIND THAT AT THE TIME OF REPAYMENT IN CASH THERE WAS NO UNSECURED LO AN STANDING IN THE BOOKS OF ASSESSEE FOR WHICH REPAYMENT HAVE BEEN MAD E; RATHER THE BALANCE OF LEDGER ACCOUNT OF M/S. KARMAYOG COMMERCIAL CORPO RATION WAS ALREADY STANDING AS DEBIT BALANCE AND EVEN ALL THROUGH THE PERIOD WHEN CASH PAYMENT OF RS.5,13,440/- WAS MADE, THE ACCOUNT OF M /S. KARMAYOG COMMERCIAL CORPORATION NEVER CAME UNDER THE UNSECUR ED LOAN CATEGORY. WE ARE, THEREFORE, OF THE VIEW THAT IN SUCH SITUATI ON THE ASSESSEE SHOULD NOT BE VISITED WITH PENALTY U/S 271E OF THE ACT, BECAUS E THE ASSESSEE HAS NOT MADE ANY CONTRAVENTION TO THE PROVISION OF SECTION 269T OF THE ACT. THUS, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 16. GROUND NO.3 IS GENERAL IN NATURE. 17. THUS, THIS APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. 18. IN THE RESULT, THE ASSESSEES APPEAL BEARING IT A NO.2480/AHD/2015 IS DISMISSED, WHILE THE APPEAL BEARING ITA NO.2481/AHD /2015 IS PARTLY ALLOWED, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 1 ST APRIL, 2016 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED 01/04/2016 BIJU T., PS ITA NOS. 2480 & 2481/AHD/2015 HEMANT RAJNIKANT SHROFF VS. ACIT FOR AY: 2008-09 16 !&''()(*' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' # / CONCERNED CIT 4. ' # ( ) / THE CIT(A) 5. &'( ! , ! , / DR, ITAT, AHMEDABAD 6. (- ./ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD