Case Law Details
In the instant case, there was no evidence to show that money was loaned or kept deposited for a fixed period or repayable on demand. Further, the sister concerns and the assessee were owned by the same family group of people with a common managing partner with centralised accounts under the same roof. Transfer of funds had taken place in a whimsical manner. Therefore, it was rather difficult to say that the transactions were in the nature of deposits or loans with certain conditions attached to them, either as regards the period of such deposits or loans or with regard to their repayments. From the copies of the accounts furnished all that could be gathered was that funds had been transferred from and to the sister concerns as and when required and since the managing partner was common to all the sister concerns, the decision to transfer the funds from one concern to another concern or to repay the funds could be said to have been largely influenced by the same individual. In such circumstances of the case, the transactions inter se between the sister concerns and the assessee could not partake of the nature of either ‘deposit’ or ‘loan’ though interest might have been paid on the same.’
Therefore, we find that the funds had been borrowed from the sister concern not at Nokha where the assessee had bank account but in Sriganganagar District for engagement of fresh labourers. Therefore, we agree with the contention of the learned Authorised Representative on this ground. The assessee had undertaken various sites at remote area at a time where no banking facilities are available and money was urgently required and there were no banks at the sites. This is considered to be a reasonable cause.
Considering the aforesaid aspect of the matter and considering the fact that the appellate authority as well as the Tribunal has ultimately found that the respondent-assessee has given reasonable explanation for receiving such payment in cash and there was no mens rea on the part of the assessee.
(2008) 302 ITR 201 (Raj)
IN THE HIGH COURT OF RAJASTHAN
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