Case Law Details
DCIT Vs Sanjaykumar Haribhai Patel (ITAT Ahmedabad)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Ahmedabad recently ruled on an important matter concerning the imposition of penalty under section 271D of the Income Tax Act, 1961. The case revolved around the penalty for exceeding cash transaction limits and whether such penalty can be imposed on loans taken through Account Payee Cheques.
Analysis:
The assessee, Sanjaykumar Haribhai Patel, had taken loans from certain individuals, all of which were done via Account Payee Cheques. The Revenue initiated a penalty under section 271D for a violation of the provisions of section 269SS. However, the facts clearly showed that no amount was received otherwise than by Account Payee Cheques, and all the amounts were deposited in the bank account of the assessee.
The Revenue’s argument for imposing the penalty was that the merging of accounts of the lender and his proprietorship concern led to a violation of section 269SS. The CIT(A) observed that there was no violation as far as obtaining the loans is concerned, and thus deleted the penalty.
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