Bhaskar Thattaruthodiyil Nair Vs ITO (ITAT Cochin)
The Income Tax Appellate Tribunal (ITAT) of Cochin recently addressed a key issue regarding cash payments in real estate transactions in the case of Bhaskar Thattaruthodiyil Nair vs. ITO. The central question was whether a penalty under Section 271D of the Income Tax Act, 1961, could be imposed on an individual who received a cash amount as part of the final sale consideration for an immovable property.
Factual Background
The assessee, Bhaskar Thattaruthodiyil Nair, was penalized by the tax authorities for receiving ₹20 lakh in cash during the sale of a property. The authorities levied a penalty under Section 271D, which is triggered when a person accepts a loan or deposit, or a specified sum, exceeding ₹20,000 in cash, in violation of Section 269SS. Both the Assessing Officer and the Commissioner of Income Tax (Appeals) upheld the penalty. The assessee appealed the decision, arguing that the cash amount was part of the final sale consideration and not an “advance” or “loan,” and therefore, the penalty was not applicable.
Judicial Precedent and Analysis
The ITAT reviewed the case and found merit in the assessee’s argument. It relied on a prior decision by its co-ordinate bench in Ramkumar Reddy Satty vs. ACIT, which had analyzed the meaning of “specified sum” as defined in Explanation (iv) to Section 269SS.
