M/s. Space N Place Promoters P. Ltd. Vs. JCIT (ITAT Chennai)
Conclusion: Penalty u/s 271D could not be imposed on assessee for advances against sale of flats and cash receipts received from the promoters through their respective current accounts as nothing had been brought on record by Revenue to show that the receipts were superfluous in nature and not for the business of assessee.
Held: Assessee engaged in the business of real estate. AO levied penalty u/s.271D for violation of Section 269SS as assessee had received cash loans / advances from certain persons and cash receipts from promoters of assessee-company . It was held advances or other receipts of money in relation of transfer of immovable property, whether or not such transfer took place, came within the ambit of Section 269SS only w.e.f. 01.6.2015. Thus, receipts of cash by assessee as advance against sale of flats were not covered u/s.269SS, for the impugned assessment year. Coming to the second part of the cash receipts received from the promoters of assessee company, nothing had been brought on record by the Revenue to show that the receipts were superfluous in nature and not for the business of assessee. Hon’ble Jurisdictional High Court in the case of Idyayam Publications Ltd, (supra), has clearly held that cash transactions in the current account of a company with its promoters, where such current account was a running one, could not be considered as loan or advances. There was no case for the Revenue that assessee had not produced ledger before AO during the course of assessment proceedings or that the accounts of the promoters in the books of assessee were not in the nature of funds introduced for the running of its business. Hence, advances received from the promoters in cash through their respective current accounts could not be considered as loan or advances coming within the ambit of Section 269SS.
FULL TEXT OF THE ITAT JUDGEMENT
In this appeal filed by the assessee, which is directed against an order dated 30.01.2018 of ld. Commissioner of Income Tax (Appeals)-15, Chennai, it is aggrieved on levy of penalty u/s.271D of the Income Tax Act, 1961 (in short “the Act”) for violation of the mandate u/s. 269SS of the Act.
2. Assessee engaged in the business of real estate was served with a notice u/s.271D of the Act by the ld. Assessing Officer citing violation of Section 269SS of the Act. As per the ld. Assessing Officer, assessee had received cash loans / advances from the following persons.
