Case Law Details
Shri Tej Narayan Agarwal Vs Addl. CIT (ITAT Hyderabad)
Amount received and repaid by the assessee subsequently is not a loan. This is a transaction done on behalf of his children to accommodate tham in obtaining DD’s without charges and cannot be considered as taking of loan or repayment of loan in cash.
Facts of the Case
In this case AO initiated the penalty proceedings u/s 271D and also u/s 271E of the Act on the ground that the assessee has received loans in cash and also repaid the loans in cash in violation of the provisions of section 269SS and 269T of the Act. The assessee submitted that his family members had intended to purchase a property and therefore, they entered into an agreement of sale and had requested the assessee to take out a D.D and consequently had received a sum of Rs.6,29,000 and the assessee had taken out the DD accordingly. But, since the transaction did not go through, the DDs were cancelled and the amounts were repaid to his children, and therefore, the transaction is not a loan and the penalty is not leviable. The AO, however, did not accept the assessee’s contention and observed that the transaction does not fall in any of the exemptions laid down u/s 269SS and 269(T) of the Act and therefore, penalty is leviable. He, accordingly levied penalty u/s 271E and 271D of the Act against which the assessee preferred appeals before the CIT (A). The CIT (A) however, confirmed the penalty levied by the AO and the assessee is in second appeal before us.
He submitted that the DDs were purchased by the assessee since he was a premium member of the AXIS Bank and the DD charges were not payable for the DDs purchased by him. He submitted that it was only a transaction of convenience and not a loan or advance as held by the AO and therefore, both the penalties should be deleted.
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