Mr.Mohammadysuf R, Dargad , Dharwad V. Additional Commissioner of Income Tax Range-2 , Hubbali

ITA 288/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9854 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: PREETI S PATEL
• Keywords: Gift; Reasonable cause; Tax effect; Set aside
• Section: 273B; 143(1); 271D; 271E; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: BENGALURU BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA NOS.288 & 289/BANG/2019 (ASSESSMENT YEAR: 2014-15) MR. MOHAMMADYUSUF R.DARGAD, PROP: M/S. JABBAR PETROLEUM, NARENDRA CROSS, DHARWAD 580 008. [PAN: ALUPD 2624C] VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-2, HUBBALLI. ( /APPELLANT ) ( /RESPONDENT ) / APPELLANT BY : MS. PREETI S. PATEL, ADVOCATE / RESPONDENT BY : SMT. R. PREMI, JCIT / DATE OF HEARING : 04.12.2019 /DATE OF PRONOUNCEMENT : 03.01.2020 O R D E R PER D.S. SUNDER SINGH, A.M: 1. THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS), HUBBALLI (HEREAFTER REFERRED AS CIT(A)) IN ITA NOS.CIT(A), HUBLI/10065 & 10064/2018-19 DATED 07.12.2018 FOR THE ASSESSMENT Y EAR (AY) 2014-15. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, THESE APPEALS ARE CLUBBED, HEARD TOGETHER AND DISPOSED OFF BY A C OMMON ORDER AS UNDER: ITA NOS.288 & 289/BANG/2019 : - 2 - : 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED E-RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,45,800/- FO R THE ASSESSMENT YEAR 2014-15 AND THE SAME WAS PROCESSED U/S. 143(1) OF THE INCOM E TAX ACT, 1961 ('THE ACT') AND THE CASE WAS SELECTED FOR SCRU TINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER(AO) NO TICED THAT THE ASSESSEE HAD ACCEPTED THE LOANS OTHERWISE THAN ACCO UNT PAYEE CHEQUE OF RS.50,000/- (BEARER CHEQUE) ON 13/03/2013 AND A SUM OF RS. 4,00,000/- WAS REPAID IN CASH ON 13/04/2013. THE ADDITIONAL COMMIS SIONER OF INCOME TAX,RANGE-2,HUBBALI HAD ISSUED THE NOTICE U/S.271D OF THE ACT FOR ACCEPTING THE LOAN OF RS.50000/- INITIATING PENALT Y FOR VIOLATING THE PROVISIONS OF SECTION 269SS OF THE ACT AND CALLED FOR EXPLANATION FROM THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE S UBMITTED THE EXPLANATION STATING THAT THE LOAN WAS ACCEPTED BY THE BEARER CHEQUES DUE TO EXCEPTIONAL CIRCUMSTANCES FOR MAKING THE PAYMENT TO BHARAT PETROLEUM CORPORATION LTD. (BPCL). NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE AO LEVIED THE PENALTY OF RS.50000/- U NDER SECTION 271D OF THE ACT. 2.1. SIMILARLY, THE ASSESSEE MADE REPAYMENT OF TH E LOANS IN CASH ON 13.4.2013 FOR A SUM OF RS.4,00,000/- TO INDUSTRIAL PROTECTION FORCE (IPF) IN VIOLATION OF THE PROVISIONS OF SECTION 269T OF THE ACT. THE PAYMENT OF RS.4.00.000/- WAS MADE DIRECTLY IN THE BANK ACCOUNT OF IPF. THE ADDL CIT INITIATED THE PENALTY U/S 271E OF THE ACT AND CALLE D FOR EXPLANATION OF THE ASSESSEE AND THE ASSESSEE EXPLAINED THAT NO CASH PA YMENT WAS MADE ITA NOS.288 & 289/BANG/2019 : - 3 - : DIRECTLY TO THE ASSESSEE, SINCE THE PAYMENT WAS MAD E IN THE BANK ACCOUNT AND THE TRANSACTIONS WERE ACCOUNTED IN THE BOOKS OF ACCOUNTS OF BOTH THE ASSESSEES, HENCE, THE ASSESSEE REQUESTED TO DROP TH E PENALTY PROCEEDINGS. THE ADDL.CIT NOT BEING IMPRESSED WITH THE EXPLANATI ON LEVIED THE PENALTY OF RS.4,00,000/- U/S. 271E OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE W ENT ON APPEAL BEFORE LD. CIT(A) AND ARGUED THAT THE LOAN WAS ACCE PTED BY BEARER CHEQUE DUE TO BUSINESS EXPEDIENCY, THEREFORE, REQUESTED TO CANCEL THE PENALTY. SIMILARLY, THE AR ARGUED BEFORE THE LD.CIT(A) THAT REPAYMENT WAS MADE DIRECTLY IN THE BANK ACCOUNT BUT NOT TO THE ASSESSE E, THE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS, HENCE, ARGU ED THAT THERE IS NO CASE FOR THE PENALTY. NOT BEING CONVINCED WITH THE ARGUM ENT OF LD. AR, LD.CIT(A) CONFIRMED THE PENALTIES LEVIED BY THE ADDL.CIT U/S 271D AND 271E OF THE ACT. AGGRIEVED BY THE ORDERS OF THE LD. CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. 4. DURING THE APPEAL HEARING, THE LD. AR SUBMITTED THAT THE ASSESSEE HAS TAKEN THE LOAN FROM HIS FATHER MR. MOHAMMAD YOU SUF, WHICH IS A TRANSACTION BETWEEN TWO ENTITIES WITHIN THE FAMILY. THE ASSESSEE IS A PROPRIETOR OF M/S. JABBAR PETROLEUM, DHARWAD AND SH RI R.M. DARGAD IS A PROPRIETOR OF M/S INDUSTRIAL SECURITY FORCE AND M/S . ALIYA PETROLEUM AT HUBLI. MR. RM DARGAD IS THE FATHER OF THE ASSESSEE. THE AR FURTHER SUBMITTED THAT IN PETROLEUM DEALERSHIP BUSINESS THE RE IS A HEAVY INFLOW OF ITA NOS.288 & 289/BANG/2019 : - 4 - : CASH TO THE EXTENT OF RS. 5 TO 6 LAKHS DAILY. THERE FORE, AS AND WHEN IT WAS NECESSARY, THE ASSESSEE WAS TAKING THE LOANS FROM H IS FATHER TO MEET THE EXIGENCIES OF THE BUSINESS. EXCEPT THE COUPLE OF OC CASIONS ALL THE TRANSACTIONS WERE MADE THROUGH BANKING CHANNELS. TH E ASSESSEE HAS RECEIVED A BEARER CHEQUE OF RS.50,000/- ON 15.6.201 3 FROM HIS FATHER FROM THE ACCOUNT OF IPF, DHARWAD IN THE NAME OF MR. HUSS IAN R. DARGAD, THE MANAGER OF JABBAR PETROLEUM AND THE SAME WAS WITHDR AWN FROM THE BANK ACCOUNT AND DEPOSITED IN THE ASSESSEES CASH BOOK . THE AMOUNT WAS REQUIRED FOR URGENT BUSINESS NEEDS OF THE ASSESSEE TO MAKE THE PAYMENT TO BPCL FOR PURCHASE OF PETROLEUM PRODUCTS THEREFOR E, SUBMITTED THAT THE TRANSACTION WAS BETWEEN THE FATHER AND THE SON AND THE AMOUNT WAS RECEIVED THROUGH BEARER CHEQUES TO MEET THE URGENT NEEDS THEREFORE, REQUESTED TO DROP THE PENALTY. SIMILARLY, IN THE C ASE OF REPAYMENT OF THE LOAN THE ASSESSEE STATED THAT OUT OF DAILY COLLECTI ON ON 13.4.2013 THE ASSESSEE HAS DIRECTLY DEPOSITED THE CASH OF RS. 4 L AKHS INTO IPF BANK ACCOUNT AND HE HAS NOT MADE CASH PAYMENT DIRECTLY T O HIS FATHER. THE LD. AR FURTHER SUBMITTED THAT ALL THE TRANSACTIONS WERE DULY ACCOUNTED IN THE BOOKS OF ACCOUNTS OF BOTH THE ASSESSEES. THE AR ARG UED THAT SINCE THE TRANSACTIONS WERE BETWEEN FATHER AND SON, THERE IS NO CASE FOR PENALTY U/S 271D/271E. THE LD.AR RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SMT. DEEPIKA VS. ACIT IN ITA NO.561/BANG/2017 DATED 13.10.2017. 5. ON THE OTHER HAND, THE LD. DR VEHEMENTLY OPPOSED AND ARGUED THAT THE TRANSACTIONS WERE BETWEEN TWO INDEPENDENT BUSIN ESS CONCERNS ITA NOS.288 & 289/BANG/2019 : - 5 - : THEREFORE, ARGUED THAT THERE IS NO CASE FOR DROPPIN G THE PENALTY AND HENCE REQUESTED TO UPHOLD THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL PLACED ON RECORD. THOUGH THE TRANSACTIONS WERE BETWEEN TWO ENTITIES BOTH THE ENTITIES ARE PROPRIETARY CONCERNS OF FATHER AND SON . THIS FACT WAS NOT DISPUTED BY THE DEPARTMENT. THE ASSESSEE HAS ACCEP TED THE LOAN THROUGH BEARER CHEQUE AND SIMILARLY DEPOSITED THE CASH INTO THE BANK ACCOUNT OF IPF WHICH IS THE PROPRIETARY CONCERN OF THE FATHER. IN THE CASE OF ACCEPTANCE OF LOAN THE ASSESSEE HAS DEMONSTRATED TH AT HE HAS TAKEN THE LOAN DUE TO URGENT BUSINESS NEEDS WHICH WAS NOT CON SIDERED BY THE LD. CIT(A). FROM THE STATEMENTS OF FACTS, IT IS OBSERV ED THAT THE DEPOSIT WAS ALSO MADE DIRECTLY INTO THE BANK ACCOUNT AND BOTH T HE TRANSACTIONS WERE DULY ACCOUNTED IN THE BOOKS OF ACCOUNTS. BOTH THE FATHER AND THE SON ARE ASSESSED TO TAX AND MAINTAINING THE REGULAR BOOKS O F ACCOUNTS AND EXCEPT TECHNICAL VIOLATION THERE IS NO ESCAPEMENT OF INCOM E OR SUPPRESSION OF INCOME IN THE INSTANT CASE. THEREFORE, WE FIND THAT THE TRANSACTIONS ARE DULY REFLECTED AND THERE IS NO UNACCOUNTED CASH TRANSACT IONS INVOLVED IN THE INSTANT CASE. THOUGH THE TRANSACTIONS WERE BETWEEN TWO INDEPENDENT BUSINESS ORGANIZATIONS THE TRANSACTIONS WERE REMAIN ED BETWEEN FATHER AND SON WHICH DOES NOT ATTRACT IMPOSITION OF PENALTY UN DER SECTION 271E/271D OF THE ACT. THE CO-ORDINATE BENCH OF ITAT, BANGALOR E IN THE CASE OF SMT. DEEPIKA (SUPRA) CONSIDERED THE IDENTICAL ISSUE AND HELD THAT THERE IS NO CASE ITA NOS.288 & 289/BANG/2019 : - 6 - : FOR IMPOSITION OF PENALTY UNDER SECTION 271D OF THE ACT IN THE CASE OF NEAR RELATIVES. FOR THE SAKE OF CLARITY AND CONVEN IENCE, WE EXTRACT THE REVENANT PORTION IN PARA NO.7 TO 14 OF THE ORDER OF THIS TRIBUNAL IN THE CITED CASE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE F ACTS AS DECIDED BY ITAT KOLKATA IN THE CASE OF DR.B.G.PANDA WERE THAT LOAN TRANSACTIONS WERE CARRIED OUT IN CASH IN VIOLATION OF THE PROVIS IONS OF SEC.269SS OF THE ACT BETWEEN HUSBAND AND WIFE. ON THE QUESTION OF LE VY OF PENALTY U/S.271D OF THE ACT, THE TRIBUNAL HELD AS FOLLOWS : - SECTION 269SS IS APPLICABLE TO THE DEPOSITS OR LOA N. IT IS TRUE THAT BOTH IN THE CASE OF A LOAN AND IN THE CASE OF A DEPOSIT, THERE IS A RELATIONSHIP OF DEBTOR OR CREDITOR BETWEEN THE PART Y GIVING MONEY AND THE PARTY RECEIVING MONEY. IN THE CASE OF DEPOSIT. THE DELIVERY OF MONEY IS USUALLY AT THE INSTANCE OF THE GIVER AND I T IS FOR THE BENEFIT OF THE PERSON WHO DEPOSITS THE MONEY AND THE BENEFIT N ORMALLY BEING THE EARNING OF INTEREST FROM THE PARTY WHO CUSTOMARILY ACCEPTS DEPOSIT. IN THE CASE OF LOAN IT IS THE BORROWER AT WHOSE INSTAN CE AND FOR WHOSE NEEDS THE MONEY IS ADVANCED. THE BORROWING IS PRIMA RILY FOR THE BENEFIT OF A BORROWER ALTHOUGH THE PERSON WHO LENDS THE MONEY MAY ALSO STAND TO GAIN THEREBY EARNING INTEREST ON THE MONEY LENT. IN THE INSTANT CASE, THIS CONDITION WAS NOT APPLICABLE BEC AUSE THERE WAS NO RELATIONSHIP OF THE DEPOSITOR OR A CREDITOR AS NO I NTEREST WAS INVOLVED. THIS WAS NEITHER A LOAN NOR A DEPOSIT. AT THE SAME TIME. THE WORDS 'ANY OTHER PERSON' ARE OBVIOUSLY A REFERENCE TO THE DEPO SITOR AS PER THE INTENTION OF THE LEGISLATURE. THE COMMUNICATION/TRA NSACTION BETWEEN THE HUSBAND AND WIFE ARE PROTECTED FROM THE LEGISLA TION AS LONG AS THEY ARE NOT FOR COMMERCIAL USE. OTHERWISE, THERE WOULD BE A POWERFUL TENDENCY TO DISTURB THE PEACE OF FAMILIES. TO PROMO TE DOMESTIC BROILS, AND TO WEAKEN OR TO DESTROY THE FEELING OF MUTUAL C ONFIDENCE WHICH IS THE MOST ENDURING SOLACE OF MARRIED LIFE. IN THE IN STANT CASE, THE WIFE GAVE MONEY TO HUSBAND FOR CONSTRUCTION OF A HOUSE W HICH WAS NATURALLY A JOINT VENTURE FOR THE PROPERTY OF THE F AMILY ONLY. THIS TRANSACTION WAS NOT FOR COMMERCIAL USE. THE AMOUNT DIRECTLY RECEIVED BY THE HUSBAND. I.E .. THE ASSESSEE. WAS TO THE EXT ENT OF RS. 17.000 ONLY AND THE BALANCE AMOUNT OF RS. 26.000 WAS GIVEN BY PAYMENT DIRECTLY TO THE SUPPLIER OF THE MATERIAL REQUIRED F OR THE CONSTRUCTION OF THE HOUSE. THOUGH THE EXPENDITURE WAS APPARENTLY IN CURRED BY THE HUSBAND BEING THE KARTA/HEAD OF THE FAMILY, IT COUL D NOT BE SAID THAT THE WIFE COULD NOT HAVE ANY INTEREST OF HER OWN IN THIS HOUSE BEING CONSTRUCTED. THE TRANSACTION WAS NEITHER LOAN NOR A NY GIFT AS NO 'INTEREST' ELEMENT WAS INVOLVED AND THERE WAS NO PR OMISE TO RETURN THE AMOUNT WITH OR WITHOUT INTEREST. IT WAS CLEAR THAT THE MONEY GIVEN BY THE WIFE WAS A JOINT VENTURE OF THE FAMILY. TAKING INTO CONSIDERATION OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, IT COU LD BE SAID THAT THE AFORESAID PIECE OF LEGISLATION WAS NOT APPLICABLE I N THE INSTANT CASE. BY TAKING THE LIBERAL VIEW AND APPLYING THE GOLDEN RUL E OF INTERPRETATION, THE ASSESSEE HAD A REASONABLE CAUSE WITHIN THE MEAN ING OF SECTION 27 3B. THEREFORE. THE PENALTY SHOULD BE DELETED. ITA NOS.288 & 289/BANG/2019 : - 7 - : 8. IN THE CASE OF ACIT VS. VARDAAN FASHION (2015) 6 0 TAXMANN.COM 407 (DELHI-TRIB.) IT WAS HELD THAT WHERE THE ASSESSEE I NTENDED TO PURCHASE A PROPERTY JOINTLY FOR WHICH ASSESSEE'S WIFE HAD ADVA NCED A SUM OF MONEY TO ASSESSEE AND WHEN DEAL FOR PURCHASE OF SUCH HOUSE P ROPERTY DID NOT MATERIALIZE, ASSESSEE REFUNDED SAID AMOUNT THROUGH CHEQUE TO HIS WIFE. ON THE QUESTION WHETHER ACCEPTANCE OF CASH BY HUSBA ND FROM HIS WIFE WOULD AMOUNT TO TAKING OF LOAN OR ADVANCE IN STRICT SENSE OF SECTION 269SS , THE TRIBUNAL HELD THAT IT CANNOT BE CONSTRU ED AS LOAN ATTRACTING PROVISIONS OF SEC.269SS OF THE ACT AND THEREFORE NO PENALTY UNDER SECTION 271D COULD BE LEVIED. 9. THE INCOME-TAX APPELLATE TRIBUNAL, AMRITSAR BENC H, IN THE CASE OF ITO V. TARLOCHAN SINGH [2003] 128 TAXMAN 20 (MAG) WAS C ONCERNED WITH A CASE WHERE THE HUSBAND HAD TAKEN THE CASH OF RS. 70 ,000 FROM HIS WIFE FOR THE PURPOSE OF INVESTMENT IN THE ACQUISITION OF IMM OVABLE PROPERTY. THE ASSESSING OFFICER HAD LEVIED THE PENALTY UNDER SECTION 271D WHICH WAS CANCELLED BY THE INCOME-TAX APPELLATE TRIBUNAL HOLDING AS UNDER : 'EVEN KEEPING IN VIEW THE CONTENTS OF THE DEPARTMEN TAL CIRCULAR NO. 387 [1985] 152 ITR (ST.) 1), IT WAS NEVER THE INTEN TION OF THE LEGISLATURE TO PUNISH A PARTY INVOLVED IN A GENUINE TRANSACTION. THEREFORE, BY TAKING A LIBERAL VIEW IN THE INSTANT CASE, THE ASSESSEE HAD A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 27 3D. THUS, KEEPING IN VIEW THE ENTIRE FACTS OF THE INSTANT CAS E, AND ALSO KEEPING IN VIEW THE INTENTION OF THE LEGISLATURE IN ENACTIN G THE PROVISIONS OF SECTION 269SS, IT WAS TO BE HELD THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM RECEIVING THE MONEY BY AN ACC OUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. IN THE INSTANT CASE, THE ASSESSEE WAS OF THE OPINION THAT THE AMOUNT IN QUESTION DID NOT REQUIRE TO BE RECEIVED BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYE E DRAFT. THUS, THERE WAS A REASONABLE CAUSE AND NO PENALTY SHOULD HAVE BEEN LEVIED. FROM THE ABOVE, IT WOULD BE CLEAR THAT THE ASSESSEE HAD TAKEN PLEA THAT FIRSTLY THERE WAS NO VIOLATION OF THE PRO VISIONS OF SECTION 269SS. SECONDLY, THERE WAS A REASONABLE CAUSE. THIR DLY, THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT HE WAS NOT REQUIRED TO RECEIVE THE AMOUNT OTHERWISE THAN BY AN ACCOUNT PAY EE CHEQUE OR ACCOUNT PAYEE DRAFT. AS AN ALTERNATIVE SUBMISSION, IT WAS CONTENDED THAT THE DEFAULT COULD BE CONSIDERED EITHER TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF LAW AND, THEREFORE, NO PENALTY UNDER SECTION 271D WAS LEVIABLE. IN VIEW OF THE ABOVE DISCUSSION, NO P ENALTY UNDER SECTION 271D WAS LEVIABLE. IT IS WELL-SETTLED THAT PENALTY PROVISION SHOULD BE INTERPRETED AS IT STANDS AND, IN CASE OF DOUBT, IN A MANNER FAVOURABLE TO THE TAXPAYER. IF THE COURT FINDS THAT THE LANGUAGE IS AMBIGUOUS OR CAPABLE OF MORE MEANING THAT THE ONE, THEN THE COURT HAS TO ADOPT THE PROVISION WHICH FAVOURS THE ASSESS EE, MORE PARTICULARLY WHERE THE PROVISIONS RELATE TO THE IMP OSITION OF PENALTY. IN VIEW OF THE ABOVE, THE PENALTY SUSTAINED BY THE COM MISSIONER (APPEALS) WAS CANCELLED.' 10. THE RATIO OF THE ABOVE DECISION OF THE INCOME- TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, WOULD BE SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEE'S CASE. HERE ALSO, THE DAUGHTER AND MEMBER OF THE HUF HAVE GIVEN MONEY FOR CERTAIN SPECIFIC PURPOSE. THE SOURC E AND GENUINENESS OF THE LOAN HAS BEEN ACCEPTED BY THE AO. THE CASH LOAN S IN QUESTION ITA NOS.288 & 289/BANG/2019 : - 8 - : THEREFORE CANNOT BE SAID FALL WITHIN THE MISCHIEF O F SEC.269SS OF THE ACT AS NEAR RELATIVES CANNOT BE SAID TO BE OTHER PERSO N WITHIN THE MEANING OF SEC.269SS OF THE ACT. IN ANY EVENT IN THE CIRCUM STANCES OF THE CASE, THERE WAS REASONABLE CAUSE FOR ACCEPTING LOANS IN C ASH. 11. IN THE CASE OF CIT V. SUNIL KUMAR GOEL [2009] 3 15 ITR 163/183 TAXMAN 53 , THE HON'BLE PUNJAB AND HARYANA HIGH COU RT HELD AS UNDER : 'A FAMILY TRANSACTION, BETWEEN TWO INDEPENDENT ASSE SSEES, BASED ON AN ACT OF CASUALNESS, SPECIALLY IN A CASE WHERE THE DI SCLOSURE THEREOF WAS CONTAINED IN THE COMPILATION OF ACCOUNTS, AND WHICH HAD NO TAX EFFECT, ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B O F THE ACT. SINCE THE ASSESSEE HAD SATISFACTORILY ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B OF THE ACT, HE MUST BE DEEMED TO HAVE ESTABLIS HED SUFFICIENT CAUSE FOR NOT INVOKING THE PENAL PROVISIONS OF SECTIONS 2 71D AND 271E OF THE ACT AGAINST HIM. THE DELETION OF PENALTY BY THE TRI BUNAL WAS VALID.' 12. THAT THE RATIO OF THE ABOVE DECISION OF THE HON 'BLE PUNJAB AND HARYANA HIGH COURT WOULD ALSO BE SQUARELY APPLICABL E IN RESPECT OF CASH TRANSACTION BETWEEN THE ASSESSEE AND HIS NEAR RELAT IVES. 13. IN THE CASE OF M.YESHODHA 351 ITR 265(MAD), THE HONBLE MADRAS HIGH COURT HELD THAT TRANSACTION OF LOAN BETWEEN FA THER IN LAW AND DAUGHTER IN LAW IN CASH CANNOT BE SUBJECT MATTER OF LEVY OF PENALTY U/S.271D OF THE ACT. 14. IN THE LIGHT OF THE AFORESAID JUDICIAL PRONOUNC EMENTS, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY U/S.271D OF THE ACT CANN OT BE SUSTAINED. THE SAME IS DIRECTED TO BE DELETED. THE APPEAL OF T HE ASSESSEE IS ALLOWED. 7. SINCE, THE FACTS ARE IDENTICAL RESPECTFULLY FOLL OWING THE VIEW TAKEN BY THIS TRIBUNAL IN THE CASE OF SMT. DEEPIKA (SUPRA), WE HOLD THAT THE PENALTY LEVIED BY THE AO U/S. 271E/271D IS UNSUSTAINABLE AN D THE SAME ARE CANCELLED. ACCORDINGLY, WE, SET ASIDE THE ORDERS O F THE LD.CIT(A) AND CANCEL THE PENALTIES LEVIED U/S. 271E/271D OF THE ACT. TH E APPEALS OF THE ASSESSEES ARE ALLOWED. ITA NOS.288 & 289/BANG/2019 : - 9 - : 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. SD/- SD/- (N.V. VASUDEVAN) (D.S. SUNDER SINGH) VICE PRESIDENT ACCOUNTANT MEMBER BENGALURU, DATED: 3.1.2020. EDN COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE