Shri Bhikhabhai Dhanjibhai Patel, Surat V. The Income tax Officer, Ward-2(3), Surat

ITA 831/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0427 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-10-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 05-04-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TIWARI
• Assessee Lawyers: J P SHAH; M J SHAH
• Keywords: Reasonable cause
• Section: 273B; 271D; 271E; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND P.K. BANSAL, ACCOUNTANT MEMBER) ITA NO.831 AND 832/AHD/2006 [ASSTT.YEAR : 2001-2002 AND 2003-2004] BHIKHABHAI DHANJIBHAI PATEL PROP: M/S.TIN GAS SERVICES 01, MAHAVIR CHAMBERS OPP: SMC SCHOOL, MARUTINAGAR LIMBAYAT, SURAT. VS. ACIT, RANGE-2 SURAT. ASSESSEE BY : SHRI J.P.SHAH AND SHRI M.J.SHAH REVENUE BY : SHRI A.K.TIWARI O R D E R PER R.V.EASWAR, VICE-PRESIDENT : BOTH THE APPEALS ARE BY THE ASSESSEE AND THEY ARE DIRECTED AGAINST THE PENALTIE S IMPOSED UNDER SECTION 271D AND SECTION 271E OF THE INCOME TAX ACT FOR THE ASSESSMENT YEARS 2001- 2002 AND 2003-2004 RESPECTIVELY. THE PENALTIES IMP OSED ARE RS.8.00 LAKHS UNDER EACH OF THE ABOVE SECTIONS. 2. THE PENALTIES CAME TO BE IMPOSED IN THE FOLLOWIN G CIRCUMSTANCES. THE ASSESSEE HAD ACCEPTED A SUM OF RS.8 LAKHS IN CASH F ROM M/S.MAHINDRA TRADERS. THE SAID SUM APPEARED IN THE BALANCE SHEET OF THE A SSESSEE UNDER THE HEAD UNSECURED LOANS. THE AO INITIATED PENALTY PROCEE DINGS UNDER SECTION 271D ON THE GROUND THAT THERE WAS A CONTRAVENTION OF SEC TION 269SS OF THE ACT IN AS MUCH AS THE ASSESSEE TOOK A LOAN IN CASH IN A SUM E XCEEDING RS.20,000/-. THE AFORESAID AMOUNT WAS FOUND TO HAVE BEEN REPAID ON T HREE DIFFERENT DAYS THAT IS 1-1-2003, 2-1-2003 AND 28-1-2003, THE AMOUNTS REPAI D BEING RS.3.5 LAKHS, 1.5 LAKHS AND RS.3.00 LAKHS RESPECTIVELY. ON THE GROUN D THAT THE REPAYMENT WAS IN VIOLATION OF SECTION 269T, PENALTY PROCEEDINGS WERE INITIATED UNDER SECTION 271E OF THE ACT. PAGE - 2 ITA NO.831 AND 832/AHD/2006 -2- 3. IN RESPONSE TO THE PENALTY NOTICES, THE ASSESSEE EXPLAINED THAT HE WAS GIVEN THE DEALERSHIP OF IOC GAS AGENCY IN THE NAME AND STYLE OF M/S.TINA GAS SERVICE IN THE RESERVED CATEGORY, THAT IN ORDER TO AUGMENT THE CAPITAL HE ACCEPTED RS.8 LAKHS FROM ONE PRAFUL PATEL WHO WAS T HE PROPRIETOR OF MAHINDRA TRADERS AS CAPITAL FOR THE PARTNERSHIP WHICH WAS PR OPOSED TO BE CONSTITUTED UNDER A MEMORANDUM OF UNDERSTANDING ENTERED INTO ON 8-3-2001, THAT SINCE THE ASSESSEE COULD NOT SUCCEED IN GETTING THE APPROVAL OF THE GOVERNMENT FOR CONSTITUTING A PARTNERSHIP TO TAKE OVER THE GAS AGE NCY THE AMOUNT WAS RETURNED AND IN THESE CIRCUMSTANCES THERE WAS NO VIOLATION O F EITHER SECTION 269SS OR 269T OF THE ACT. IT WAS POINTED OUT THAT THE AMOU NT WAS REPAID BY CHEQUES ISSUED ON THREE DIFFERENT DATES AND NOT IN CASH. I T WAS ALSO SUBMITTED THAT HAVING REGARD TO THE LEGISLATIVE INTENT AS EXPLAINE D IN THE BOARD CIRCULAR NO.387 DATED 6-9-1984 WHILE INTRODUCING SECTIONS 269SS AND 269T, THIS WAS NOT A CASE FOR IMPOSING THE PENALTY. IT WAS ALSO PLEADED THAT THE AMOUNT TAKEN FROM PRAFUL PATEL WAS NOT USED FOR THE ASSESSEES BUSINE SS. A REQUEST WAS THUS MADE FOR DROPPING THE PENALTY PROCEEDINGS. 4. THE AO RECORDED A STATEMENT FROM PRAFUL PATEL UN DER SECTION 131 OF THE ACT ON 24-3-2005. A COPY OF THE STATEMENT IS AT PA GES 21 TO 23 OF THE ASSESSEES PAPER BOOK. HE CONFIRMED THE ASSESSEES EXPLANATION IN MATERIAL ASPECTS. HE ALSO STATED THAT HE HAS GOT BACK THE M ONIES WITHOUT ANY INTEREST AND ALSO EXPLAINED HOW HE UTILISED THE SAME. HE STATED THAT HE WAS ASSESSED TO INCOME TAX BUT DOES NOT MAINTAIN BOOKS OF ACCOUNT E XCEPT SUMMARY OF THE BANK ACCOUNTS AND DETAILS OF INCOME FROM COACHING C RICKETERS. 5. THE AO WAS NOT SATISFIED WITH THE ASSESSEES EXP LANATION OR WITH THE STATEMENT OF PRAFUL PATEL. HE NOTED THAT THERE WAS NO REASONABLE CAUSE FOR TAKING THE MONEY IN CASH. HE FURTHER HELD THAT THE ASSESSEES PLEA THAT THE AMOUNT WAS ACCEPTED AS CAPITAL FOR THE PROPOSED PAR TNERSHIP WAS NOT SUPPORTED BY ANY EVIDENCE EXCEPT THE MOU WHICH WAS PREPARED A FTER THE ACCEPTANCE OF THE LOAN. HE ALSO FOUND NO EVIDENCE IN THE FORM O F CORRESPONDENCE WITH IOC PAGE - 3 ITA NO.831 AND 832/AHD/2006 -3- TO SUPPORT THE PLEA OF THE ASSESSEE THAT A PARTNERS HIP BETWEEN HIM AND PRAFUL PATEL WAS PROPOSED BUT WAS NOT PERMITTED. AS REGA RDS THE ARGUMENT BASED ON THE BOARDS CIRCULAR, THE AO HELD THAT THE LEGISLAT IVE INTENT IS NOT VERY RELEVANT AND UNLESS REASONABLE CAUSE WITHIN THE MEANING OF S ECTION 273B IS SHOWN, PENALTY PROCEEDINGS CANNOT BE DROPPED. IN THIS VIE W OF THE MATTER, HE LEVIED THE IMPUGNED PENALTIES AND THE SAME HAVING BEEN CON FIRMED BY THE CIT(A), THE ASSESSEE IS IN FURTHER APPEALS BEFORE THE TRIBUNAL. 6. IN SUPPORT OF THE APPEALS, THE LEARNED COUNSEL F OR THE ASSESSEE, BESIDES REITERATING THE SUBMISSIONS MADE BEFORE THE DEPARTM ENTAL AUTHORITIES, ALSO CONTENDED THAT IT WAS DOUBTFUL WHETHER THE AMOUNT T AKEN BY THE ASSESSEE FROM PRAFUL PATEL CAN BE CONSIDERED AS A LOAN OR DEPOSIT WITHIN THE MEANING OF SECTION 269SS. HE POINTED OUT THAT THE MOU WAS A C ONTEMPORANEOUS DOCUMENT ABOUT WHICH THERE WAS NO DISPUTE AND THE A RRANGEMENT BETWEEN THE ASSESSEE AND PRAFUL PATEL WAS ALSO CONFIRMED BY THE LATTER UNDER SECTION 131. IT WAS ONLY AS A CAPITAL CONTRIBUTION THAT PRAFUL PATE L ADVANCED THE MONEY TO THE ASSESSEE AND THE FACT THAT BECAUSE OF TECHNICAL DIF FICULTIES THE PROPOSED PARTNERSHIP COULD NOT MATERIALISE DID NOT ROB THE A DVANCE OF ITS CHARACTER AS CAPITAL CONTRIBUTION. IT WAS FURTHER POINTED OUT THAT THE AMOUNT ADVANCED DID NOT BEAR ANY INTEREST WHICH WOULD NOT HAVE BEEN THE CASE IF IT HAD BEEN ADVANCED AS A LOAN OR DEPOSIT. IT WAS FURTHER POIN TED OUT THAT THERE WAS NO TAX PLANNING OR TAX EVASION AS THE MOTIVE FOR THE TRANS ACTION AND HAVING REGARD TO THE OBJECT FOR WHICH THE SECTIONS WERE BROUGHT IN, THIS WAS NOT A FIT CASE FOR LEVY OF PENALTY. AS REGARDS THE REPAYMENTS, IT WA S POINTED OUT THAT THEY WERE MADE BY CHEQUES AND NOT IN CASH AS CAN BE SEEN FROM THE BANK ACCOUNTS, COPIES OF WHICH WERE PLACED AT PAGES 16 AND 18 OF THE PAPE R BOOK AND THEREFORE THERE WAS NO VIOLATION OF SECTIONS 269T. IT WAS FINALLY SUBMITTED THAT THE AO WAS NOT CLEAR ABOUT THE CHARGE AND THIS VAGUENESS ALSO INVALIDATED THE PENALTY. 7. IN SUPPORT OF THE ABOVE SUBMISSIONS, OUR ATTENTI ON WAS DRAWN BY THE LEARNED COUNSEL FOR THE ASSESSEE TO THE FOLLOWING A UTHORITIES: PAGE - 4 ITA NO.831 AND 832/AHD/2006 -4- I) A.M.SHAMSUDEEN VS. UOI AND OTHERS, 244 ITR 266 (MAD ) II) BAIDYA NATH PLASTIC INDUSTRIES P.LTD. AND OTHERS, V S. ITO, 230 ITR 522 (DEL) III) CIT VS. BOMBAY CONDUCTORS AND ELECTRICS LTD., 301 I TR 328 (GUJ) IV) ASSTT.DIRECTOR OF INSPECTION (INVEST) VS. KUM.A.B.S HANTHI AND OTHERS 255 ITR 258 (SC) V) CHAMUNDI GRANITES P. LTD. VS. DCIT, 245 ITR 661 (KA R) VI) VIR SALES CORPORATION VS. ACIT, 50 TTJ 130 (AHMEDAB AD BENCH) 8. ON THE OTHER HAND, THE LEARNED SR-DR POINTED OUT THAT THE ASSESSEE HIMSELF HAS SHOWN THE AMOUNT AS A LOAN IN ITS BALAN CE SHEET AND THEREFORE SECTION 269SS AND 269T WERE ATTRACTED. ACCORDING T O HIM THERE WAS NO REASONABLE CAUSE TO JUSTIFY THE CANCELLATION OF THE PENALTY. HE SUBMITTED THAT THE MEMORANDUM OF UNDERSTANDING WAS AN AFTER-THOUGH T ENTERED INTO ONLY TO GET OVER THE CHARGE THAT THERE IS A VIOLATION OF TH E ABOVE SECTIONS. IN THIS CONNECTION HE POINTED OUT THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY CORRESPONDENCE WITH IOC TO SUBSTANTIATE HIS CLAIM T HAT A PARTNERSHIP WAS PROPOSED TO BE FORMED WITH PRAFUL PATEL AND PERMISS ION FOR THE SAME WAS SOUGHT FOR OR THAT IT WAS REJECTED. HE SUBMITTED THAT THERE WOULD HAVE BEEN A SERIOUS VIOLATION OF THE CONDITIONS OF ALLOTMENT OF THE GAS AGENCY IF THE ASSESSEE ATTEMPTED TO FORM A PARTNERSHIP WITH AN OUTSIDER AF TER HAVING OBTAINED THE GAS AGENCY UNDER THE RESERVE CATEGORY. HE THUS POINTED OUT THAT THE ASSESSEES EXPLANATION CANNOT BE TRUE. ACCORDING TO THE LEARN ED SR-DR THE REAL INTENTION IN TAKING THE AMOUNT FROM PRAFUL PATEL WAS NOT FORT HCOMING FROM THE ASSESSEE OR PRAFUL PATEL WHICH SUGGESTED THAT THE TRANSACTIO N WAS IN FACT A LOAN OR DEPOSIT. HE ALSO RELIED ON THE FINDING OF THE AO THAT THE MONEY WAS UTILISED BY THE ASSESSEE IN HIS BUSINESS AT LEAST FOR SOMETI ME THE TIME DURING WHICH THE ASSESSEES BANK BALANCE CAME BELOW RS.8 LAKHS. THIS BELIED THE ASSESSEES EXPLANATION THAT THE AMOUNT WAS TAKEN FROM PRAFUL P ATEL AS CAPITAL CONTRIBUTION FOR THE PROPOSED PARTNERSHIP. AS REGARDS THE AUT HORITIES CITED ON BEHALF OF THE ASSESSEE, THE LEARNED SR-DR SUBMITTED THAT THEY WOU LD APPLY ONLY IF THE PAGE - 5 ITA NO.831 AND 832/AHD/2006 -5- TRANSACTIONS WERE GENUINE BUT SINCE THE TRANSACTION S IN THE PRESENT CASE WERE NOT GENUINE THEY HAD NO APPLICATION. A FORCEFUL P LEA WAS THUS MADE FOR CONFIRMING THE PENALTIES. 9. ON A CAREFUL CONSIDERATION OF THE FACTS AND RIVA L CONTENTIONS, WE FIND IT DIFFICULT TO CONFIRM THE PENALTIES. THE ASSESSEE N O DOUBT TOOK THE AMOUNT OF RS.8 LAKHS IN CASH FROM PRAFUL PATEL BUT DEPOSITED THE ENTIRE SUM ON 24-1-2001 IN HIS CURRENT ACCOUNT NO.1034 WITH BANK OF INDIA, BOMBAY MARKET, SURAT. THIS HAS BEEN POINTED OUT BY HIM IN HIS LETTER DATE D 4-8-2005 TO THE AO (PAGE 4 OF THE PAPER BOOK). NO DOUBT THE AMOUNT WAS SHOWN UNDER THE HEAD UNSECURED LOANS IN THE ASSESSEES BALANCE SHEET, BUT THE NOMENCLATURE GIVEN BY THE PARTIES TO A TRANSACTION IS NOT CONCLUSIVE O F ITS NATURE. THE NATURE OF THE TRANSACTION HAS TO BE ASCERTAINED IN ACCORDANCE WIT H THE INTENTION OF THE PARTIES AND SURROUNDING CIRCUMSTANCES. THE MEMORANDUM OF U NDERSTANDING WAS ENTERED INTO ON 8-3-2001 AND A COPY THEREOF IS PLAC ED AT PAGES 31 TO 35 OF THE PAPER BOOK. THE ORIGINAL IS IN GUJARATI ON A STAMP PAPER OF RS.100/-. THE STAMP PAPERS HAVE BEEN PURCHASED ON THE SAME DAY VI Z. 8-3-2001. THERE IS NO EVIDENCE TO SHOW THAT ON THE DAY WHEN THE MOU WAS E NTERED INTO, ANY PROCEEDINGS FOR THE LEVY OF PENALTY UNDER THE INCOM E TAX ACT WERE PENDING AGAINST THE ASSESSEE. IT CANNOT THEREFORE BE SAID THAT THE MOU WAS NOT A CONTEMPORANEOUS DOCUMENT OR IT HAD BEEN GOT UP AS A N AFTER-THOUGHT, JUST TO SUIT THE OCCASION. THE ENTERING INTO OF THE MOU AN D THE MATERIAL CONTENTS THEREOF WERE CONFIRMED BY PRAFUL PATEL WHO WAS EXAM INED FOUR YEARS LATER IN MARCH, 2005 UNDER SECTION 131 OF THE ACT. THE MOU NARRATES THAT BECAUSE THE ASSESSEE NEEDED FINANCE FOR ITS BUSINESS HE HAD PROPOSED TO PRAFUL PATEL THAT HE SHOULD JOIN AS PARTNER AND THAT THE AMOUNT OF RS .8 LAKHS WAS TO BE TREATED AS CAPITAL CONTRIBUTION. IT FURTHER STATES THAT AFTER OBTAINING THE NECESSARY PERMISSION FROM IOC A REGULAR PARTNERSHIP DEED WHOU LD BE DRAWN UP BETWEEN THE PARTIES WITH THE ASSESSEE HAVING 70% SHARE AND PRAFUL PATEL HAVING 30% SHARE. IT IS FURTHER STATED THAT IF THE PERMISSION IS REFUSED THE ASSESSEE WILL RETURN THE AMOUNT IMMEDIATELY WITHOUT INTEREST TO P RAFUL PATEL. THE PAGE - 6 ITA NO.831 AND 832/AHD/2006 -6- RELATIONSHIP BETWEEN PRAFUL PATEL AND ASSESSEE WHIC H INDUCED HIM TO ADVANCE THE MONEY TO THE ASSESSEE HAS BEEN BROUGHT OUT IN T HE ANSWER TO QUESTION NO.5 GIVEN BY HIM IN THE STATEMENT RECORDED UNDER SECTIO N 131. HE HAS STATED THAT THE ASSESSEE WAS HIS NEIGHBOUR IN THE PAST AND WAS A PERSONAL FRIEND OF HIS FATHER AND THEY HAD FAMILY RELATIONS. HE ALSO CON FIRMED THAT NO INTEREST WAS CHARGED ON THE AMOUNT AND THAT THE SAME HAS BEEN RE TURNED WITH WHICH HE CONSTRUCTED A COMPOUND WALL AROUND HIS FARM, A SMAL L HOUSE THEREIN AND ALSO A BOREWELL. HE HAS ALSO STATED THAT HE IS ASSESSED T O TAX. THERE IS NO MATERIAL TO SUSPECT EITHER THE VERACITY OR CREDIBILITY OF THE M OU OR THE STATEMENT OF PRAFUL PATEL GIVEN UNDER SECTION 131 OF THE ACT. THE ONLY GROUND ON WHICH THESE HAVE BEEN REJECTED BY THE DEPARTMENTAL AUTHORITIES AS AFTER-THOUGHT IS THAT UNDER THE CONDITIONS OF ALLOTMENT OF THE GAS AGENCY IT WA S NOT OPEN TO THE ASSESSEE TO ENTER INTO PARTNERSHIPS WITH OTHERS. WE HAVE NOT B EEN SHOWN THE CONDITIONS UNDER WHICH THE ALLOTMENT OF THE GAS AGENCY WAS MAD E IN ORDER TO SUBSTANTIATE THE GROUND. EVEN IF ONE WERE TO ACCEPT THAT THERE WAS SUCH A CONDITION, THAT WOULD ONLY ENTAIL SOME CONSEQUENCES UNDER THE ALLOT MENT RULES SUCH AS CANCELLATION OF THE AGENCY. HOWEVER, IT CANNOT IN ANY MANNER THROW DOUBT OR SUSPICION ON THE INTENTION OF THE PARTIES VIZ. THAT THEY PROPOSED TO FORM A PARTNERSHIP FOR WHICH PRAFUL PATEL HAD ADVANCED RS. 8 LAKHS AS HIS CAPITAL CONTRIBUTION. THIS IS FORTIFIED NOT ONLY BY THE M OU ENTERED INTO IMMEDIATELY AFTER THE MONEY WAS ADVANCED BUT ALSO BY THE FACT T HAT THERE WAS NO PROVISION FOR PAYMENT OF ANY INTEREST ON THE ADVANCE WHICH WO ULD HAVE BEEN NORMALLY THE CASE IF THE AMOUNT HAD BEEN ADVANCED AS A LOAN OR AS A DEPOSIT. THE DEFINITION OF A LOAN OR DEPOSIT IN SECTION 269SS ME RELY SAYS THAT IT MEANS A LOAN OR DEPOSIT OF MONEY (EXPLANATION III BELOW THE SECT ION). UNDER EXPLANATION III BELOW SECTION 269T IT IS DEFINED AS MONEY WHICH IS REPAYABLE AFTER NOTICE OR AFTER A PERIOD AND IN THE CASE OF A PERSON OTHER TH AN A COMPANY INCLUDES LOAN OR DEPOSIT OR ANY NATURE. THE POPULAR MEANING OF A LO AN OR DEPOSIT INVOLVES THE IDEA OF CHARGING INTEREST AND IN ORDINARY PARLANCE IT WOULD BE DIFFICULT TO CONCEIVE OF A LOAN OR DEPOSIT OF MONEY WITHOUT ANY PROVISION FOR PAYMENT OF PAGE - 7 ITA NO.831 AND 832/AHD/2006 -7- INTEREST. IN THE CASE OF A CAPITAL CONTRIBUTION TO A PARTNERSHIP FIRM, THERE CAN BE A CONTRACT AMONGST THE PARTNERS THAT THE CAPITAL CO NTRIBUTION WOULD CARRY INTEREST. IN THE PRESENT CASE HOWEVER IT WAS PROVI DED THAT IF THE PARTNERSHIP DOES NOT MATERIALISE, THE MONEY WOULD BE RETURNED W ITHOUT INTEREST. THE IDEA OF A LOAN OR DEPOSIT WITHIN THE MEANING OF SECTIONS 269SS AND 269T IS THEREFORE RULED OUT. IN ANY CASE, THERE IS CONSIDERABLE DOUB T AS TO WHETHER AN ADVANCE MADE WITHOUT ANY PROVISION FOR INTEREST CAN AMOUNT TO LOAN OR DEPOSIT. IN THIS VIEW OF THE MATTER, IT CAN EVEN BE STATED THAT THE ASSESSEE BONA FIDE THOUGHT THAT HE COULD TAKE THE CAPITAL CONTRIBUTION IN CASH SINC E IT DID NOT CARRY ANY INTEREST AND CANNOT BE CONSIDERED AS A LOAN OR DEPOSIT. THU S, THERE WAS BONA FIDE BELIEF WHICH ALSO CONSTITUTES REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B. 10. IN ADDITION TO THE ABOVE, THIS IS NOT A CASE FI T FOR LEVY OF PENALTY, BECAUSE WE ARE NOT ABLE TO SPELL OUT ANY MOTIVE TO EVADE TA X. PRAFUL PATEL WAS ALREADY ASSESSED TO TAX. THOUGH HE ADVANCED THE MONIES TO THE ASSESSEE IN CASH, THE ASSESSEE IMMEDIATELY DEPOSITED THE SAME IN HIS BANK ACCOUNT. THUS, THE AMOUNT WAS BROUGHT ON RECORD AND INTO THE ACCOUNTS OF THE ASSESSEE. IN SUCH AN OPEN TRANSACTION, CONFIRMED BY PRAFUL PATEL, THERE CAN BE HARDLY ANY MOTIVE TO EVADE TAX. THE HONBLE GUJARAT HIGH COURT HAS HELD IN THE JUDGMENT CITED SUPRA, ON BEHALF OF THE ASSESSEE, THAT IT IS NECESS ARY TO SHOW THE MOTIVE TO EVADE TAX IN ORDER TO JUSTIFY THE LEVY OF PENALTY UNDER S ECTIONS 271D AND SECTION 271E. THIS DECISION APPLIES TO THE PRESENT CASE. 11. SO FAR AS THE REPAYMENTS ARE CONCERNED, THEY AR E ALL BY CHEQUES AND THIS IS EVIDENCED BY THE COPY OF THE ASSESSEES BANK ACC OUNT WITH BANK OF INDIA. THE STATEMENTS ARE PLACED AT PAGES 15 TO 18 OF THE PAPER BOOK. THEREFROM WE FIND THAT THE ASSESSEE REPAID THE MONEY TO PRAFUL P ATEL (PROPRIETOR MAHINDRA TRADERS) IN THE FOLLOWING MANNER BY CHEQUE: DATE CHEQUE NO. AMOUNT 29-1-2003 460980 3,00,000/- 01-2-2003 460987 3,50,000/- PAGE - 8 ITA NO.831 AND 832/AHD/2006 -8- 07-1-2003 460946 1,50,000/- SECTION 269T IS THEREFORE NOT ATTRACTED AND THE PEN ALTY IMPOSED UNDER SECTION 271E CANNOT SURVIVE. 11. IN THE RESULT AND FOR THE ABOVE REASONS, WE CAN CEL THE PENALTIES OF RS.8 LAKHS EACH IMPOSED UNDER SECTIONS 271D AND 271E AND ALLOW THE APPEALS OF THE ASSESSEE WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT 20 TH NOVEMBER, 2009. SD/- SD/- (P.K. BANSAL) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 20-11-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD