Applicability of penalty u/s. section 269T of IT Act, 1961, when payment was made in cash but not exceeded Rs.20,000/- on a single day
CASE LAW DETAILS
Decided by: ITAT, DELHI BENCH `A’ : NEW DLEHI, In The case of: Ajay Goel v. ACIT, Appeal No.: ITA No. 1123/Del/2008, Decided on: April 24, 2009
14 On perusal of the aforesaid account, it is seen that the assessee had to pay sum of Rs. 2,00,000/- to M/s. Ram Kumar Krishan Kumar as on 01.04.2002. Thus, the total amount payable by the assessee was of Rs. 2,00,000/-. Thereafter, the assessee has paid the sum of Rs. 13,000/-, 14,500/-,14, 000/-,15, 000/-, 17,200/- and 12,650/- in cash on 19.06.2002, 20.06.2002, 21.06.002, 22.06.2002, 24.06.2002 and 25.06.2002 respectively, reducing the outstanding amount from Rs. 2,00,000/- to Rs. 1,13,650/- as on 25.06.2002. It is, thus, clear that the aforesaid payments on different dates is the repayment of the outstanding amount of Rs. 2,00,000/-. The repayment was thus made in respect of the amount of Rs. 2,00,000/- payable by the assessee. Merely because the amount of Rs. 2,00,000/-has been re-paid in part not exceeding Rs. 20,000/- on a single day would not absolve the assessee from rigour of section 269T of the Act as is clear from the section itself. Since the repayment on various dates is the repayment out of the amount of Rs. 2,00,000/-, though in part, the repayment is squarely covered by the provisions of section 269T of the Act.
17. In the reply before the A.O., the assessee stated that M/s Ram Kumar Krishan Kumar was in urgent need of money and he could not wait up to the clearance of cheque and as such the assessee indeed made the repayment of loan in cash. It goes to show that the transaction was a repayment of loan, was not at all in dispute. Even otherwise the statement of account between the assessee and M/s. Ram Kumar Krishan Kumar clearly indicates that the assessee had a liability of Rs. 2,00,000/- payable to M/s. Ram Kumar Krishan Kumar. The assessee has submitted that as and when the assessee and M/s. Ram Kumar Krishan Kumar require money, they used to accept or pay the money to each other. It is, thus, the case of temporary loan taken or accepted by the assessee form M/s. Ram Kumar Krishan Kumar. It is altogether a different matter that whether any interest on loan has been paid or not. The loan or deposit, for the purpose of section 269T, includes loan or deposit of any nature. The transaction between assessee and M/s. Ram Kumar Krishan Kumar is a transaction of accepting and paying money to each other. It is also evident that it is not a business transaction relating to the trading activities of the assessee. In the light of scope of section 269T, no question would arise to exclude current loan or current deposit. As stated by the assessee, the assessee used to take money from M/s Ram Kumar Krishan Kumar whenever need arises makes it clear that the assessee approached M/s. Ram Kumar Krishan Kumar to advance money as he was in need of the same. The money was accepted by the assessee on his request. It is, thus, a case of loan taken by the assessee from M/s. Ram Kumar Krishan Kumar, which was repaid by the assesses as and when M/s. Ram Kumar Krishan Kumar makes the demand. We, therefore, hold that it is the case of acceptance and repayment of loan between the assessee and M/s. Ram Kumar Krishan Kumar and, thus, it is covered by provisions of section 269T of the Act in as much as the repayments were made on 19.06.2002 and thereafter, after the insertion of the word Moan’ in section 269T of the Act w.e.f. 01.06.2002. We make it clear that even though the loans were taken before inserting the word ‘loan’ in section 269T, if the repayment is made after the insertion of word ‘loan’ in section 269T, provisions of section 269T would equally applicable as so held by Hon’ble Madras High Court in the case of A.M. Shamshuddin vs. Union of India (2000) 244 TTR 266 as under:-
“I am also of the view that the contention of Id. counsel for the petitioner that the provisions of section 269T are not applicable as the loans were obtained in the year 1983 or J 984 is not well founded. In my view, the date on which the loans were obtained is not relevant for the applicability of section 269T of the Act and the question has to be considered when the loans were repaid. The loans were admittedly repaid in the year 1991 and at that time, the provisions of section 269T have come into force and the question whether the provisions were in force on the date when the loans were taken is not relevant for the applicability of section 269T. Admittedly, the provisions of section 269T were in force on the date when the loans were repaid in cash and, therefore, I reject the submission of Id. counsel for the petitioner that the provisions of section 269T are not applicable as the loans were obtained prior to the introduction of the provisions of section 269T as untenable. “
18. We make it further clear that when the legislature did not intend to exclude the current loan or deposit from the definition of loan or deposit, there is no reason to stretch or narrow down the definition of loan or deposit given in the Explanation to that section in the Act itself. A plain reading of language used in the definition of `loan or deposit’ in section 269T clearly provides loan or deposit means any loan or deposit of any nature. Thus, there is no question of excluding current loan for the purpose of section 269T of the Act.