DCIT Vs Sunil Kumar Kundu (ITAT Kolkata)
Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted a ₹1 crore penalty imposed under Section 271E on Sunil Kumar Kundu for alleged violation of Section 269T of the Income Tax Act. The penalty was related to a cash transaction made by the assessee to his sister concern, M/s Tarai Transport Corporation, which the revenue had treated as repayment of a loan. The assessee, however, contended that the payment was a reimbursement for business expenses such as freight and labour, not a loan repayment. The Tribunal accepted that the transaction occurred between closely held sister concerns with common partners and family members. It was also noted that the final settlement was made via banking channels.
The Tribunal acknowledged that a similar issue involving the sister concern had previously been resolved in favor of the assessee by the ITAT, Calcutta High Court, and the Supreme Court, with the department’s Special Leave Petition (SLP) being dismissed. The ITAT concluded that the transaction represented a current account adjustment and not a repayment of a loan or deposit, thereby not attracting the provisions of Section 269T. As a result, the penalty imposed under Section 271E was deemed unjustified and was deleted. The Tribunal also condoned a 10-day delay in filing the appeal, citing genuine and uncontested reasons.
