Case Law Details
All Fresh Supply Management Pvt. Ltd. Vs ACIT (ITAT Delhi)
In the case of All Fresh Supply Management Pvt. Ltd. versus Assistant Commissioner of Income Tax (ITAT Delhi), the Income Tax Appellate Tribunal (ITAT) Delhi ruled in favor of the appellant, deleting the penalty imposed under section 271DA of the Income Tax Act, 1961.
All Fresh Supply Management Pvt. Ltd., engaged in the trading of fruits and dealing with small farmers as well as retailers, voluntarily reported cash transactions exceeding Rs. 2 lakhs in Form 61A for the financial year 2017-18. The transactions involved cash receipts from small retailers/traders who were not aware of the income tax provisions and hence deposited cash directly into the appellant company’s bank account. Subsequently, the Assessing Officer imposed a penalty under section 271DA, equal to the amount of such receipts, which was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)].
During the appeal before the ITAT Delhi, the appellant argued that the cash receipts were duly recorded in the books of accounts, and there was no intention of tax evasion or malafide intent involved in the transactions. The appellant also emphasized that they promptly communicated with the parties involved to ensure compliance with the new legislation prohibiting cash transactions exceeding Rs. 2 lakhs.
The ITAT Delhi considered these arguments and observed that the transactions were duly recorded in the appellant company’s books of accounts, with the identity and confirmation of the parties involved on record. There was no evidence of unaccounted money or tax evasion. Additionally, the company’s operations were aimed at improving farmers’ incomes by providing them direct access to markets for their produce.
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