Case Law Details
Kalpesh Mahidas Maradia Vs Add. CIT (ITAT Rajkot)
as the impugned amount received by the assessee from his father’s proprietary firm is concerned, we note that the Gujarat High Court in the case of Dr. Rajaram L. Akhani v ITO [2017] 88 taxmann.com 693 (Gujarat) has held that where assessee had accepted a sum of Rs. 2 lakhs from his son to meet urgent requirement of depositing margin money in bank account for buying a vehicle for personal use, amount so received was neither a loan nor a deposit within meaning of section 269SS. The Delhi ITAT in the case of ACIT v Vardaan Fashion [2015] 60 taxmann.com 407 (Delhi – Trib.) held that acceptance of cash by husband from his wife cannot said to be taking of loan or advance in strict sense of section 269SS and therefore, no penalty under section 271D could be levied. In the case of Smt. Kusum Dhamani [2014] 47 taxmann.com 143 (Jaipur – Trib.), ITAT held that where assessee running a proprietorship concern, took cash loans from her husband carrying on another proprietorship business on account of business exigencies for making payments to labourers and lenders, there being no violation of provisions of section 269SS, impugned penalty order passed under section 271D was to be set aside. In the case of ITO v. Tarlochan Singh [2003] 128 taxman 20 (Asr.) (Mag.) penalty under section 271D was levied on ground that assessee had received loan of Rs. 70,000 in cash from his wife for investment in acquisition of immovable properties. Wife had given money to husband for prosperity of family only and there was no evidence that amount in question was taken for commercial use. Though revenue considered it loan, but there was no material on record to show that assessee had returned amount received from wife or paid interest thereupon. Assessee was also under bona fide belief that amount in question did not require to be received otherwise than by an account payee cheque or account payee bank draft. Whether considering above and also keeping in view that intention of Legislature was never to punish a party involved in genuine transactions, it had to be held that there was reasonable cause and no penalty was leviable. In the case of Smt. Meera Devi Kumawat v. JCIT [2021] 132 taxmann.com 21 (Jaipur – Trib.) where assessee received substantial amount of cash from her husband for purchase of plot and construction of residential house on it, since repayment of said amount was not mandatory and there was no element of interest, and pooling of family funds was done by assessee due to family requirement and as she did not have any known sources of funds, no penalty could be levied under section 271D for violation of section 269SS. The jurisdictional ITAT Rajkot Bench in the case of Shailesh Akbari v. Addl. CIT in ITA No. 666/Rjt/2014 has held that transaction between closely related persons such as father and son must fall outside the purview of section 269SS. In view of the decision of the jurisdictional Gujarat High Court in the case of Dr. Rajaram L. Akhani supra and other case laws cited above, as applicable to the facts of the case, in our view so far as receipt of ₹ 12,49,526/- by the assessee from his father’s proprietary firm is concerned, the provisions of section 269SS do not stand attracted. There is nothing on record to show that the amount was taken as a loan or deposit by the assessee from his father and also there is nothing on record to establish that the assessee was under an obligation to repay that the same (with or without interest) and therefore in view of the judicial precedents cited above, in our view provisions of section 269SS cannot be invoked so far as the amount of ₹ 12,49,526/- is concerned.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
This assessee’s appeal for A.Y. 2008-09, arises from order of the CIT(A)-1, Rajkot dated 26-08-2019, in Appeal No. CIT(A)-I/Rjt/11507/16-17, in proceedings under section 271D of the Income Tax Act, 1961; in short “the Act”.
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