Case Law Details
CIT Vs Panchsheel Owners Associations (Gujarat High Court)
While completing the assessment, the Assessing Officer has noticed that the assessee, an AOP, borrowed loan of Rs. 40,00,000/- from Smt. Shantaben A. Patel, main promoter of the AOP, in cash for expeditious acquisition of land, in violation of section 269SS of the I.T. Act. Therefore, penalty of Rs. 40,00,000/- was levied under section 271D of the I.T. Act.
CIT(AI deletes the penalty.
ITAT observed that Genuineness of the transaction has not been disputed by the lower authorities, so also importance and urgency of raising cash loan, its payment to farmers for acquiring regranted land from “GHB” and conveyance of the same land by these farmers in favour of the assessee on the same day, has also not been disputed. We are of the view that there were compelling circumstances for the assessee to raise cash loan as raising funds by way of demand draft would have delayed the realization of payment, defeating the purpose of AOP in acquiring the land. We hold that the assessee has reasonable cause in raising cash loan. Our views are fortified by the above case laws. We see no infirmity in the order of CIT(A) on this issue which is upheld.
HC held that We have perused the orders of the Commissioner (Appeals) as well as the Tribunal. In this case the transaction was found to be genuine. The Assessing Officer has not doubted the transaction. In that view of the matter, both the Commissioner (Appeals) and the Tribunal have rightly deleted the penalty.
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