Case Law Details
Shri Sanmathi Ambanna Vs JCIT (ITAT Bangalore)
In penalty proceedings, the assessee, inter alia, submitted that the transactions in question cannot be strictly construed as loan but rather are in the nature of gifts from his father-in-law Shri. G. P. Padmakumar because of the fact that the person giving the money and the person accepting the money were close relatives; being members of the same family. Apart from this, it was also submitted that the transactions were genuine, were entered into due to the urgent exigencies of business and that the assessee was under the bonafide belief that there was no breach of any provision of law. The assessee’s above contentions/explanations did not find favour with the AO i.e., JCIT who proceeded to levy penalty of Rs.3,20,000/- u/s 271D of the Act vide order dated 2 1.02.2013; being an amount equivalent to the loan accepted in cash in violation of the provisions of section 269SS of the Act. On appeal, the CIT(A), Davangere, vide the impugned order dated 08.12.2016 dismissed the asessee’s appeal ex-parte for non-prosecution following, inter alia, the decision of the Delhi Bench of ITAT in the case of Multiplan (India) Ltd., 38 ITD 320 (Del).
On Appeal Hon’ble ITAT held that cash loans from close relatives cannot be said to fall within the mischief of section 269SS of the Act, as near/close relatives cannot be said to be “other persons” within the meaning of section 269SS of the Act, we are of the considered view that the imposition of penalty u/s 271D of the Act in the case on hand is unsustainable and accordingly direct that the same be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order of CIT(A), Davangere dated 08.12.2016, confirming the levy of penalty u/s 271D of the Income Tax Act, 1961 (in short ‘the Act’) for Assessment Year 2008-09.
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