S. 271D No Penalty for acknowledging the debt in books, if there was no cash receipt by the Assessee

INCOME TAX APPEAL No. – 134 of 2003

Assessment Year 1997- 98

Commissioner Of Income Tax-II Kanpur

Versus

M/S Sher Cot Leather Craft Ltd. Kanpur  

Order Date :- 13.12.2013

Hon’ble Dr. Satish Chandra,J.  Hon’ble B. Amit Sthalekar,J.

The present appeal has been filed by the Department under Section 260-A of the Income Tax Act, 1961, against the judgment and order dated 31.5.2003, passed by the Income Tax Appellate Tribunal (Lucknow Bench) in I.T.A.No.508/Luc/2001, for the assessment year 1997-98. A Coordinate Bench of this Court on 8.12.2010 has admitted the appeal on the following substantial questions of law:-

“1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting penalty under Section 271D of the Income Tax Act, 1961?

2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that the assessee company did not receive any cash as the payments were managed from one Shri Asif Viquor to the creditors of the assessee company?”

Heard Sri Shambu Chopra,  learned counsel for the Department and Sri Ashish Bansal, learned counsel for the assessee.