Case Law Details

Case Name : CIT Vs. M/s Speedways Rubber Pvt. Limited (Punjab & Haryana High Court at Chandigarh)
Appeal Number : ITA No. 361 of 2009 (O&M)
Date of Judgement/Order : 22/10/2009
Related Assessment Year :
Courts : All High Courts (3706) Punjab and Haryana HC (201)

The Assessing officer initiated proceedings for alleged violation of section 269SS of the Act in as much as the assessee accepted share application money being Rs. 20,000/- in cash. Thereafter, penalty was imposed. On appeal, CIT(A) upheld the stand of the assessee that the amount received was not loan or deposit and no interest was payable. It was further held that transaction was bonafide and default was of technical nature and in any case, the amount was received from public and not from directors or share holders. High Court upheld the view of CIT(A).

HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

ITA No. 361 of 2009 (O&M)

Date of decision: 22.10.2009

CIT Vs. M/s Speedways Rubber Pvt. Limited

CORAM:- HON’BLE MR JUSTICE ADARSH KUMAR GOEL

HON’BLE MR. JUSTICE GURDEV SINGH

Present:- Mr. Vivek Sethi, Standing Counsel for the revenue.

JUDGMENT

Adarsh Kumar Goel, J.

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1. This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (in short, ‘the Act’) against the order dated 31.12.2008 of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in ITA No. 388/(ASR)/2008, for the assessment year 2001-02, proposing to raise following question of law:-

“Whether on the facts and in the circumstances of the case (having violated the provision of section 269SS of the Act) the ITAT was right in law in deleting the penalty imposed under section 271D of the Income Tax Act, 1961?”

2. The Assessing officer initiated proceedings for alleged violation of section 269SS of the Act in as much as the assessee accepted share application money being Rs.20,000/- in cash. Thereafter, penalty was imposed. On appeal, CIT(A) upheld the stand of the assessee that the amount received was not loan or deposit and no interest was payable. It was further held that transaction was bonafide and default was of technical nature and in any case, the amount was received from public and not from directors or share holders. The Tribunal affirmed the said view. Reliance was placed on following judgments:-

(i) Hindustan Steel Limited v. State of Orissa, 83 ITR 26 (SC).

(ii) CIT v. Kharaiti Lal & Co. (2004) 270 ITR 445 (P&H).

(iii) CIT v. Maheshwari Nirma Udyog, (2008) 302 ITR 201(Raj.)

(iv) CIT v. Lakshmi Trust Co., (2008) 303 ITR 99 (Mad.)

(v) CIT v. Indore Plastics P.Limited, (2003) 262 ITR 163 (MP).

(vi) CIT v. Idhayam Publications Limited, (2006) 285 ITR 221(Mad.)

(vii) CIT v. Bazpur Coop.Sugar Factory Limited, 172 ITR 321(SC).

3. Judgment of Jharkhand High Court in Bhalotia Engineering Works Limited v. CIT, 275 ITR 399 was held to be distinguishable.

4. We have heard learned counsel for the appellant.

5. Only point which has been pressed is that amount should have been held to be loan or deposit, as held in Bhalotia Engineering Works (supra).

6. We do not find any merit in the contention raised. The finding to the effect that transaction was bonafide and default was of technical nature which did not justify levy of penalty is not shown to be, in any manner, perverse or unreasonable.

7. No substantial question of law arises.

8. The appeal is dismissed.

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