ITO Vs Narayanaswamy (ITAT Chennai)
Fabricated Agreement Fails Revenue -Unregistered Sale Agreement -No Proof of Cash Receipt in Property Sale-271D Penalty Struck Down: ITAT Chennai
Chennai ITAT has upheld the order of CIT(A) deleting a massive penalty of ₹3.02 crore levied u/s 271D, on the allegation of cash receipt in a property transaction. Tribunal held that in the absence of any cogent evidence of actual cash payment, the penalty was unsustainable in law.
Assessee had sold immovable property along with others & received ₹17,52,250/- as his share of the consideration. According to AO, as per the information available with Dept, an unregistered sale agreement dated 29.04.2017 was executed between Assessee and purchaser for a sale consideration of immovable property for land of total area of 5 acres and 75 cents for ₹.3,47,87,500/-. AO concluded that the actual sale consideration was ₹3.47 crore as against the registered deed value of ₹45.04 lakh. According to AO, the difference of ₹3.02 crore was presumed to have been received by Assessee & other sellers in cash, allegedly in violation of Section 269SS & accordingly a penalty of ₹3,02,83,000/- was levied u/s 271D.
CIT(A) deleted the penalty, holding that there was no documentary evidence to prove that Assessee had received any cash over & above the registered sale consideration. It was observed that mere existence of an unregistered agreement was not sufficient to prove cash transactions.
