Assistant Commissioner of Income-tax, V. Shri Venkateshwara Shikshan Sanstha, Sangli

ITA 546/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7313 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Assessee Lawyers: S V DESHPANDE
• Keywords: Search and seizure; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . . / ITA NO . 5 46 /P U N/201 5 / ASSESSMENT YEAR : 20 10 - 11 ASSISTANT COMMISSIONER OF INCOME TAX, ( EXEMPTION ) CIRCLE, PUNE ....... / APPELLANT / V/S. SHRI VENKATESHWARA SHIKSHAN SANSTHA, A/P. PETH NAKA, TAL. : WALVA, DISTT. - SANGLI 416313 PAN : AAHTS1450P / RESPONDENT ASSESSEE BY : S HRI S.V. DESHPANDE REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 2 2 - 08 - 2017 / DATE OF PRONOUNCEMENT : 11 - 10 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 & 2, KOLHAPUR DATED 07 - 01 - 2015 FOR THE ASSESSMENT YEAR 2010 - 11, DELETING THE LEVY OF PENALTY U/S. 271D O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE TRUST IS RUNNING SEVERAL EDUCATIONAL INSTITUTES. THE ASSESSEE TRUST ACCEPTED UNSECURED CASH LOANS FROM FOLLOWING PERSONS : UNSECURED CASH LOANS FROM FOLLOWING PERSONS : I . SHRI NANASAHEB R. MAHADIK RS.34,39,100/ - . II . SHRI SHIVAJ I DAGDU GUND RS.66,58,428/ - . III . SHRI TANAJI DAGDU GUND RS.61,70,820/ - IV . SHRI SAJJAN S. PA WAR RS.6,44,045/ - 2.1 OUT OF ABOVE FOUR PERSONS, SHRI NANASAHEB R. MAHADIK IS THE PRESIDENT OF ASSESSEE TRUST. HE ADVANCED THE AMOUNT TO ASSESSEE AFTER WITHDRAWING THE SAME FROM HIS BANK ACCOUNT FROM TIME TO TIME. THE OTHER THREE PERSONS ARE STATED TO BE AGRICULTURISTS AND FRIENDS OF THE TRUSTEES OF ASSESSEE TRUST. THE CASE OF THE ASSESSEE IS THAT INITIALLY THE TRUSTIES CONTRIBUTED THEIR OWN FUND S AS WELL AS FUNDS COLLECTED FROM CLOSE FRIENDS AND RELATIVES WHO HAPPENED TO BE WELL AS FUNDS COLLECTED FROM CLOSE FRIENDS AND RELATIVES WHO HAPPENED TO BE AGRICULTURISTS FOR CONSTRUCTION OF POLYTECHNIC BUILDING . THE ASSESSEE OBTAINED AP PROVAL FROM ALL INDIA COUNCIL FOR TECHNICAL EDU CATION FOR ESTABLISHING D IPLOMA INSTITUTES. F OR CONSTRUCTION OF POLYTECHNIC BUILDING , FUNDS WERE REQUIRED. T HE TRUSTEES AND THEIR CLOSE RELATIVES AND FRIENDS CONTRIBUTED THE FUNDS FOR IMMEDIATE CONSTRUCTION OF BUILDING . PURPORTEDLY, SOME OF THE RELATIVES/FRIENDS OF TRUSTEES WERE AGRICULTURALISTS , CO NTRIBUTIONS WERE RECEIVED RELATIVES/FRIENDS OF TRUSTEES WERE AGRICULTURALISTS , CO NTRIBUTIONS WERE RECEIVED FROM THEM IN CASH. THE ASSESSING OFFICER HELD THAT SINCE, THE ADVANCES/DEPOSITS HAVE BEEN RECEIVED IN CASH THERE IS A VIOLATION OF PROVISI O NS OF SECTION 269SS OF THE ACT, HENCE, PENALTY PROCEEDINGS U/S. 271D W ERE INITIATED. THE JOINT COMMISSIONER OF INCOME TAX VIDE ORDER DATED 26 - 09 - 2013 LEVIED PENALTY OF RS.1,34,73,293/ - U/S. 271D ON ACCOUNT OF UNSECURED LOANS 3 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 ACCEPTED FROM SHRI SHIVAJI DAGDU GUND, SHRI TANAJI DAGDU GUND AND SHRI SAJJAN S. PA WAR. AGGRIEVED BY THE ORDER LEVYING PENALTY, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE CONTENTIONS OF ASSESSEE AND HELD THAT THE ASSESSEE WAS ABLE TO SHOW REASONABLE CAUSE A S ENVISAGED U/S. 273B FOR ACCEPTING THE TEMPORARY ADVANCES AND DELETED LEVY OF PENALTY. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DR. VIVEK AGGARWAL REPRESENTING THE DEPARTMENT SUBMITT ED THAT THOUGH THE ADVANCES/DEPOSITS WERE RECEIVED BY ASSESSEE FOR CONSTRUCTION OF BUILDING BUT THE ASSESSEE TRUST FAILED TO ESTABLISH THE NEXUS BETWEEN CONSTRUCTION OF BUILDING AND THE ALLEGED TEMPORARY ADVANCES RECEIVED IN CASH. THE LD. DR POINTED THAT THE ASSESSEE TRUST HAS TAKEN LOAN OF MORE THAN RS.4 CRORES FROM STATE BANK OF INDIA FOR CONSTRUCTION OF COLLEGE BUILDING AND HAD MADE TDS ON PAYMENTS MADE TO CONTRACTOR FOR CONSTRUCTION OF THE COLLEGE BUILDING. THE LD. DR SUBMITTED THAT THE AFORESAID THRE E PERSONS NAMELY SHRI SHIVAJI DAGDU GUND, SHRI TANAJI DAGDU GUND AND SHRI SAJJAN S. P A WAR ARE STATED TO BE AGRICULTURISTS BUT ALL OF THEM HAVE BANK ACCOUNT AND HAVE OBTAINED LOANS FROM BANK. THUS, IT CANNOT BE SAID THAT THE ABOVE THREE PERSONS ARE NOT MA INTAINING BANK ACCOUNTS. THE LD. DR CONTENDED THAT THOUGH THE ASSESSEE HAS TERM ED THE CASH AMOUNTS RECEIVED FROM AFORESAID PERSONS AS TEMPORARY ADVANCES BUT IN FACT, THE AFORESAID AMOUNTS ARE LOAN AMOUNTS . T HEREFORE, THEY FALL WITHIN THE AMBIT OF PROVISIONS OF SECTION 269SS OF THE ACT. THE LD. DR 4 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND UPHO LD ING THE ORDER LEVYING PENALTY U/S. 271D OF THE ACT. 4. PER CONTRA, SHRI S.V. DESHPANDE APPE ARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD RECEIVED TEMPORARY ADVANCES FROM SHRI SHIVAJI DAGDU GUND, SHRI TANAJI DAGDU GUND AND SHRI SAJJAN S. PA WAR FOR CONSTRUCTION OF POLYTECHNIC BUILDING. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD RECEIVED APPROVAL FROM ALL INDIA COUNCIL FOR TEC HNICAL EDUCATION FOR ESTABLISH D IPLOMA INSTITUTION . THE LD. AR REFERRED TO LETTER DATED 29 - 06 - 2009 ESTABLISH D IPLOMA INSTITUTION . THE LD. AR REFERRED TO LETTER DATED 29 - 06 - 2009 AT PAGES 18 TO 20 OF THE PAPER BOOK FROM THE DIRECTOR, WESTERN REGIONAL OFFICE, ALL INDIA COUNCIL FOR TECHNI CAL EDUCATION. THE LD. AR REFERRING TO THE CONDITIONS LAID DOWN IN THE LETTER SUBMITTED THAT AS PER CONDITION NO. 3 , THE ASSESSEE WAS REQUIRED TO HAVE EXCLUSIVE BUILT - UP AREA FOR CONDUCTING DIPLOMA ENGINEERING PROGRAMME. T HE ASSESSEE WAS UNDER IMMENSE PR ESSURE TO COMPLETE THE BUILDING WITHIN A SHORT SPAN . T HE BORROWING OF FUNDS FROM COMPLETE THE BUILDING WITHIN A SHORT SPAN . T HE BORROWING OF FUNDS FROM BANK/FINANCIAL INSTITUTION WOULD HAVE TAKEN LONGER TIME, THEREFORE, ALL THE TRUSTEES P OO LED IN THEIR FUNDS AND ALSO SOUGHT CONTRIBUTION S FROM CLOSE RELATIVES AND FRIENDS. SHRI SHIVAJI DAGDU GUND, SHRI TANAJI DAGDU GUND AND SHRI SAJJAN S. P A WAR ARE CLOSE FRIENDS OF SHRI NANASAHEB R. MAHADIK, PRESIDENT AND TRUSTEE OF THE ASSESSEE TRUST. THEY ARE AGRICULTURISTS; THEREFORE, THE Y CONTRIBUTED THE FUNDS IN CASH. THE ASSESSEE HA S ALR EADY PLACED ON THE Y CONTRIBUTED THE FUNDS IN CASH. THE ASSESSEE HA S ALR EADY PLACED ON RECORD 7/12 EXTRACTS TO SHOW THEIR LAND HOLDINGS. THE REVENUE HAS NOT DISPUTED THE FACT THAT THE ABOVE THREE PERSONS ARE AGRICULTURISTS. THE LD. AR FURTHER SUBMITTED THAT CONTRIBUTION MADE BY ABOVE THREE PERSONS WERE INTEREST FREE TEMPORAR Y ADVANCES AND WERE NOT IN THE NATURE OF INTEREST BEARING LOANS/DEPOSITS. THE LD. AR FURTHER SUBMITTED THAT THE AMOUNT RECEIVED AS TEMPORARY ADVANCES WERE SHOWN IN THE BOOKS OF ACCOUNT AS UNSECURED LOANS TEMPORARY ADVANCES WERE SHOWN IN THE BOOKS OF ACCOUNT AS UNSECURED LOANS 5 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 IN ACCORDANCE WITH THE STANDARD ACCOUNTING FORMAT. THE LD. AR CONTENDED THAT TEMPORARY ADVANCES WERE TAKEN FOR CONSTRUCTION OF P OLYTECHNIC BUILDING DURING FINANCIAL YEAR 2009 - 10, AT THAT TIME NO LOAN WAS TAKEN FROM ANY BANK DURING FINANCIAL YEAR 2009 - 10, AT THAT TIME NO LOAN WAS TAKEN FROM ANY BANK FOR CONSTRUCTION OF P OLYTECHNIC BUILDING. 4.1 THE LD. AR FURTHER CONTENDED THAT GENUINENESS OF THE TRANSACTION HAS NOT BE EN DISPUTED BY THE REVENUE AND THE PERSONS FROM WHOM TEMPORARY ADVANCES HAVE BEEN TAKEN ARE IDENTIFIABLE. THERE WAS NO INTENTION OF THE ASSESSEE TO VIOLATE ANY PROVISIONS OF THE ACT, THE CASH AMOUNTS WERE TAKEN ON ASSESSEE TO VIOLATE ANY PROVISIONS OF THE ACT, THE CASH AMOUNTS WERE TAKEN ON ACCOUNT OF EXIGENCIES MENTIONED ABOVE. UNDER SUCH CIRCUMSTANCES , PENALTY U/S. 271D IS NOT LEVIABLE. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS, PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . KARNATAKA GINNING & PRESSING FACTORY VS. JOINT COMMISSIONER OF INCO ME TAX, 77 ITD 478 (MUM. - TRIB.); II . DEPUTY COMMISSIONER OF INCOME TAX VS. SURESH KUMAR BHIKAMCHAND II . DEPUTY COMMISSIONER OF INCOME TAX VS. SURESH KUMAR BHIKAMCHAND JAIN, 47 CCH 507 (PUNE - TRIB.). THE LD. AR PRAYED FOR UPHOLDING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISSING THE APPEAL OF REVENUE. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . WE HAVE ALSO CONSIDERED THE DOCUMENTS PLACED ON RECORD BY BOTH THE SIDES AND DECISIONS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE. 6. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS RECEIVED CASH AMOUNTS FROM SHRI SHIVAJI DAGDU GUND RS.66,58,428/ - , SHRI TANAJI DAGDU GUND 6 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 RS.61,70,820/ - AND SHRI SAJJAN S. POWAR RS.6,44,045/ - . AS PER CONTENTIONS OF THE ASSESSEE THE A MOUNT RECEIVED FROM AFORESAID PERSONS ARE TEMPORARY ADVANCES AND NO INTEREST HAS BEEN PAID TO THE AFORESAID PERSONS. THE CASH ADVANCES AND NO INTEREST HAS BEEN PAID TO THE AFORESAID PERSONS. THE CASH AMOUNT HAS BEEN ALLEGEDLY REC EIVED FOR CONSTRUCTION OF P OLYTECHNIC BUILDING. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR TH AT NO LOAN AMOUNT WAS TAKEN FROM BANK WHEN THE AFORESAID ADVANCES WERE RECEIVED FOR CONSTRUCTION OF P OLYTECHNIC BUILDING. THE LD. AR HAS STATED THAT CASH AMOUNT HAS BEEN RECEIVED DURING THE PERIOD STARTING FROM JUNE, 2009 TO DECEMBER, 2009 AND APPROVAL FO R ESTABLISHING POLYTECHNIC WAS RECEIVED ON 29 - 06 - 2009. APPROVAL FO R ESTABLISHING POLYTECHNIC WAS RECEIVED ON 29 - 06 - 2009. 7. THE NEXUS BETWEEN RECEIPT OF CASH FUNDS BY THE ASSESSEE FROM THE AFORESAID THREE PERSONS AND CONSTRUCTION OF BUILDING IS ESTABLISHED BY VIRTUE OF CLOSENESS OF TIME WHEN THE APPROVAL WAS RECEIVED BY ASSESSEE FROM ALL INDIA COUNCIL FOR TECHNIC AL EDUCATION FOR ESTABLISHING DIPLOMA I NSTITUTE. A PERUSAL OF LETTER FROM ALL INDIA COUNCIL FOR TECHNICAL EDUCATION, WESTERN REGIONAL OF LETTER FROM ALL INDIA COUNCIL FOR TECHNICAL EDUCATION, WESTERN REGIONAL OFFICE AT PAGES 18 TO 20 OF THE PAPER BOOK SHOWS THAT THE ASSESSEE WAS REQU IRED TO HAVE EXCLUSIVE BUILT UP AREA FOR CONDUCTING DIPLOMA ENGINEERING PROGRAMME. A READING OF THE LETTER ALSO REVEAL S THAT THE ASSESSEE WAS REQUIRED TO FURNISH UNDERTAKING WITHIN 15 DAYS ALONG WITH THE PHOTOGRAPHS OF DIPLOMA INSTITUTION. THUS, THERE IS POSSIBILITY THAT TO EXPEDITE CONSTRUCTION OF BUILDING AND TO COMPLY WITH THE CONDITIONS SET OUT BY ALL INDIA COUNCIL FOR TECHNICAL AND TO COMPLY WITH THE CONDITIONS SET OUT BY ALL INDIA COUNCIL FOR TECHNICAL EDUCATION IN LETTER OF APPROVAL , THE ASSESSEE MIGHT HAVE TAKEN TEMPORARY ADVANCES FROM VARIOUS PERSONS. THUS, THE EXPLANATI ON FURNISHED BY ASSESSEE FOR ACCEPTING CASH ADVANCES CANNOT BE OUT RIGHTLY RULED OUT. 8. UNDOUBTEDLY, THE PERSONS FROM WHOM CASH HAS BEEN ACCEPTED ARE IDENTIFIABLE, THE ASSESSEE HAS BEEN ABLE TO SHOW CREDITWORTHINESS, THE ASSESSEE IDENTIFIABLE, THE ASSESSEE HAS BEEN ABLE TO SHOW CREDITWORTHINESS, THE ASSESSEE 7 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 HAS BEEN ABLE TO SHOW REASONABLE CAUSE FOR ACCEPTING TEMPORARY ADVANCES IN CASH. THE PROVISIONS OF SECTION 273B WERE INTRODUCED TO MITIGATE THE SITUATION WHERE UNDER COMPELLING CIRCUMSTANCES, THE ASSESSEE RECEIVE ADVANCES OR WHERE UNDER COMPELLING CIRCUMSTANCES, THE ASSESSEE RECEIVE ADVANCES OR FUNDS IN VIOLATIONS OF PROVISI ONS OF SECTION 269SS AND ARE THUS, SUBJECTED TO PENAL PROVISIONS OF SECTION 271D OF THE ACT. AS PER THE PROVISIONS OF SECTION 273B , NO PENALTY SHALL BE IMPOSABLE ON THE ASSESSEE U/S. 271D IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR HIS FAILURE TO COM PLY WITH THE PROVISIONS OF THE ACT IN NOT ACCEPTING LOANS/ADVANCES OTHERWISE BY WAY OF ACCOUNT PAYEE CHEQUE OR DEMAND DRAFT. IT IS NOT THE CASE OF REVENUE THAT IT IS ASSESSEES OWN CHEQUE OR DEMAND DRAFT. IT IS NOT THE CASE OF REVENUE THAT IT IS ASSESSEES OWN MONEY THAT HAS FLOWN BACK TO ASSESSEE BY WAY OF ADVANCES/LOANS. THE REVENU E HAS NOT RAISED ANY SUSPICION OVER GENUINENESS OF THE TRANSACTION. THE HONBLE SUPREM E COURT OF INDIA IN THE CASE OF KUM. A.B. SHANTHI ALIAS VENNIRA ADAI NIRMALA VS. ASST T . DIRECTOR OF INSPECTION ( INVESTIGATION ) REPORTED AS 255 ITR 258 WHILE UPHOLDING THE CONST ITUTION VALIDITY OF SEC. 269 (SS ) HELD : 5. THE OBJECT OF INTRODUCING S. 269SS IS TO ENSURE THAT A TAXPAYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY, OR IF HE HAS GIVEN SOME FALSE ENTRIES IN HIS ACCOUNTS, HE SHALL NO T ESCAPE BY GIVING FALSE EXPLANATION FOR THE SAME. DURING SEARCH AND SEIZURES, UNACCOUNTED MONEY IS UNEARTHED AND THE TAXPAYER WOULD USUALLY GIVE THE EXPLANATION THAT HE HAD BORROWED OR RECEIVED DEPOSITS FROM HIS RELATIVE OR FRIENDS AND IT IS EASY FOR THE SO - CALLED LENDER ALSO TO MANIPULATE HIS RECORDS LATER TO SUIT THE PLEA OF THE TAXPAYER. THE MAIN OBJECT OF S. 269SS WAS TO CURB THIS MENACE. TAXPAYER. THE MAIN OBJECT OF S. 269SS WAS TO CURB THIS MENACE. THE HONBLE APEX COURT FURTHER HIGHLIGHTING THE PROVISION OF SECTION 273B HELD : 13. IT IS IMPORTANT TO NOTE THAT ANOTHER PROVISION, NAMELY, S. 273B WAS ALSO INCORPORATED WHICH PROVIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIONS OF S. 271 D , NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAID PROVISION IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR SUCH FAILURE AND IF THE ASSESSEE PROVES WAS REASONABLE CAUSE FOR SUCH FAILURE AND IF THE ASSESSEE PROVES 8 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO TAKE A LOAN OTHERWISE THAN BY ACCOUNT - PAYEE CHEQUE OR ACCOUNT - PAYEE DEMAND DRAFT, THEN THE PENALTY MAY NOT BE LEVIED. THEREFORE, UNDUE HARDSHIP IS VERY MUCH MITIGATED BY THE INCLUSION OF S. 273B IN THE ACT. IF THERE WAS A GENUINE AND BONA FIDE TRANSACTION AND IF FOR ANY REASON THE GENUINE AND BONA FIDE TRANSACTION AND IF FOR ANY REASON THE TAXPAYER COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT - PAYEE CHEQUE OR DEMA ND DRAFT FOR SOME BONA FIDE REASONS, THE AUTHORITY VESTED WITH THE POWER TO IMPOSE PENALTY HAS GOT DISCRETIONARY POWER . 9. A NOTHER FACET OF THE ISSUE IN HANDS IS; WHETHER THE AMOUNT ACCEPTED BY ASSESSEE IN CASH CAN BE TERMED AS LOAN/DEPOSIT WITHIN THE ME ANING OF THE PROVISIONS OF SECTION 269SS OF THE ACT. AS PER ASSESSEES CONTENTION THE ASSESSEE HAS ACCEPTED INTEREST FREE TEMPORARY ADVANCES, THEREFORE, THE SAID ASSESSEE HAS ACCEPTED INTEREST FREE TEMPORARY ADVANCES, THEREFORE, THE SAID AMOUNT CANNOT BE EITHER TERMED AS LOAN OR DEPOSITS WHICH ARE GENERALLY INTEREST BEARING. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF KARNATAKA GINNING & PRESSING FACTORY VS. JCIT (SUPRA.) WHEREIN THERE WAS DOUBT O N THE NATURE OF ADVANCES HAS HELD: 11. QUITE APART FROM THE QUESTION OF EXISTENCE OF REASONABLE CAUSE, WE ARE NOT SURE WHETHER THE AMOUNTS RECEIVED BY THE ASSESSEE WE ARE NOT SURE WHETHER THE AMOUNTS RECEIVED BY THE ASSESSEE FROM VE CAN BE TERMED AS 'LOANS' OR 'DEPOSITS'. THE WORDS ARE NOT DEFINED IN THE EXPLANATION (III) BELOW S. 269SS EXCEPT SAYING THAT 'LOAN' OR 'DEPOSIT' MEANS LOAN OR DEPOSIT OF MONEY. THE TERMS 'LOAN' AND 'DEPOSIT' ARE NO T MUTUALLY EXCLUSIVE; THERE ARE A NUMBER OF COMMON FEATURES BETWEEN THE TWO. IT WAS HELD BY THE MADRAS HIGH COURT IN ABDUL HAMEED VS. RAHMATH, B. AIR 1965 MAD 427, THAT A LOAN IS REPAYABLE THE MOMENT IT IS INCURRED WHILE IT IS NOT SO WITH THE DEPOSIT. IN A DEPOSIT, UNLIKE A LOAN, THERE IS NO IMMEDIATE OBLIGATION TO REPAY. NORMALLY A DEPOSIT IS FOR A FIXED TENURE. THE AMOUNTS TAKEN BY THE ASSESSEE IN THE PRESENT CASE FROM VE ARE TEMPORARY ADVANCES AND THERE IS NO EVIDENCE THAT THERE WAS ANY STIPULATION AS TO THE PERIOD OR ANY STIPULATION FOR INTEREST. IT IS, THEREFORE, A MATTER OF GRAVE DOUBT AS TO WHETHER THE AMOUNTS RECEIVED FROM VE CAN BE CHARACTERIZED AS LOANS OR DEPOSITS. IN OUR VIEW, THEY CAN BE MORE APPROPRIATELY REFERRED TO AS TEMPORARY VIEW, THEY CAN BE MORE APPROPRIATELY REFERRED TO AS TEMPORARY ADVANCES. SUCH TEMPORARY ADVANCES ARE OUTSIDE THE PURVIEW OF S.269SS. 10. I T IS AN UNDISPUTED FACT THAT THE PERSONS MAKING SUCH TEMPORA RY ADVANCES ARE AGRICULTURISTS, THEREFORE WOULD PREFER TO TRANSA CT IN CASH. A FT ER TAKING INTO CONSIDERATION TOTALITY OF FACTS AND CIRCUMSTANCES , WE ARE OF CONSIDERED OPINION THAT THE ASSESSEE HAS BEEN ABLE TO SHOW REASONABLE CAUSE CONSIDERED OPINION THAT THE ASSESSEE HAS BEEN ABLE TO SHOW REASONABLE CAUSE 9 ITA NO . 546/PUN/2015, A.Y. 2010 - 11 F OR ACCEPTING THE CASH AMOUNT S TO MEET PRESSING NEED FOR CONSTRUCTION OF POLYTECHNIC BUILDING . W E FIND NO REASON TO INTERFERE WITH THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). ACCORDINGLY, THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). ACCORDINGLY, THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ARE UPHELD AND THE APPEAL OF REVENUE IS DISMISSED. 11 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY , THE 11 TH DAY OF OCTOBER, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 11 TH O CTOBER, 2017 RK /SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 1 & 2, KOLHAPUR 4. / THE CIT - I/II, KOLHAPUR 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / //// // TRUE COPY // // TRUE // TRUE / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE