Case Law Details
Mohammadyusuf R.Dargad Vs ACIT. (ITAT Bangalore)
The issue under consideration is whether the issue of penalty notice u/s 271D is justified under the Act?
In the present case, AO noticed that assessee accepted loan through bearer cheque from his father. Accordingly, he levied penalty under section 271D for violating provisions of section 269SS.
ITAT states that penalty under section 271D of the Act shall not be levied in the case of near relatives. In present case, though the transactions were between two entities both the entities are proprietary concerns of father and son. This fact was not disputed by the department. The assessee has accepted the loan through bearer cheque and similarly deposited the cash into the bank account of IPF which is the proprietary concern of the father. In the case of acceptance of loan the assessee has demonstrated that he has taken the loan due to urgent business needs which was not considered by the Ld. CIT(A). From the statements of facts, it is observed that the deposit was also made directly into the bank account and both the transactions were duly accounted in the books of accounts. Both the father and the son are assessed to tax and maintaining the regular books of accounts and except technical violation there is no escapement of income or suppression of income in the instant case. Therefore, ITAT find that the transactions are duly reflected and there is no unaccounted cash transactions involved in the instant case. Though the transactions were between two independent business organizations the transactions were remained between father and son which does not attract imposition of penalty under section 271E/271D of the Act.
Hence, ITAT hold that the penalty levied by the AO u/s. 271E/271D is unsustainable and the same are cancelled. Accordingly, they, set aside the orders of the CIT(A).
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