Aggarwal Construction Company Vs DCIT (ITAT Amritsar)
ITAT Amritsar held that there is no violation of provisions of section 269SS of the Income Tax Act when cash payment was made at one go before sub-registrar at the time of registration of sale deed. Accordingly, penalty under section 271D deleted.
Facts- The assessee is a partnership firm engaged in the business of civil construction, colonizer (development of residential colonies), and supplier of construction materials.
In course of the colonization business, the assessee during the year under appeal, received an amount of Rs.21,00,000/-, in CASH, from different persons as consideration for sale of developed plots of land , in a lumpsum amount , under the head “ Colony Development ”. Since this amount of Rs. Twenty One Lakhs, has been received in cash by the assessee, from the buyers of the plots, penalty proceedings was initiated, for alleged violation of the provisions of section 269SS of the Act 61, and penalty of equal amount was imposed u/s 271D of the Act 61, vide order dated 27/06/2019.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- In R. Dhinagharan (HUF), it is held that this provision will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-registrar at the time of registration of property. In the present case before us, it is an admitted fact that all sale deeds were registered and cash payment was made at one go before the sub- registrar at the time of registration of sale deeds of plots. Hence, in our view, there is no violation of provisions of section 269SS of the Act in the present case in the given facts and circumstances of the case and hence, penalty is not exigible in this case.
