Case Law Details
DCIT Vs VME Precast Pvt. Ltd. (ITAT Chennai)
ITAT noted that at the first instance, Revenue has added these amounts in violation of provisions of section 40A(3) of the Act i.e., not the entire amount of Rs.1,55,67,210/- but restricted the violation at Rs.79,05,835/-. However, subsequently the JCIT vide order dated 06.02.2015 levied penalty for an amount of Rs.1,05,40,500/- being payments made in cash first through the directors account and subsequently taken to the party account i.e., the assessee’s account. The JCIT also this penalty on the same violation i.e., violation u/s.40A(3) as well as for violation of provisions of section 269SS of the Act. Here in the present case, the Revenue want to impose penalty u/s.271D for violation of provisions of section 269SS of the Act, for the reason that there was a cash loan whereas the AO has given contrary finding that the payments by these two companies in cash i.e., TCS Textile Pvt. Ltd., and Shree Manickam Infrastructure Pvt. Ltd., is on account of construction contract and for that the AO has invoked the provisions of section 40A(3) of the Act. Once, it is established that these payments are for construction contract and particularly the AO has made disallowance by invoking the provisions of section 40A(3) of the Act, no disallowance can be made by invoking the provisions of section 269SS of the Act for levy of penalty u/s.271D of the Act. Hence, we confirm the order of CIT(A) deleting the penalty and dismiss this appeal of Revenue.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-11, Chennai in ITA No.5 1/17-18 dated 01.03.2019. The assessment was framed by the ACIT, Company Circle III(4), Chennai for the assessment year 2011-12 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 13.03.2014. The impugned penalty was levied by the ACIT, Corporate Range 3, Chennai u/s.271D of the Act vide order dated 30.08.2017.
2. The only issue in this appeal of Revenue is as regards to the order of CIT(A) deleting the penalty levied u/s.271D of the Act for violation of provisions of section 269SS of the Act in accepting cash amounting to Rs.1,05,40,500/-.
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