Sri Nikhil Banik Mazumder Vs. JCIT (ITAT Kolkata)
Assessee had accepted the loan in cash of Rs. 4,00,000/- from Shri Mithun Banik Mazumder, (son of the assessee) and repaid Rs. 1,50,000/-. Assessee repaid loan to his another son Sri Indranil Banik Mazumder at Rs. 2,25,098/- and also repaid loan to his wife Smt. Sandhya Banik Mazumder at Rs. 54,928/. All these transactions are between husband and wife, and between father and son, being close relative of one family.
We also note that assessee is a salaried employee and not a businessman. Therefore, based on the facts narrated above, these transactions do not fall within the ambit of sections 269SS and 269T of the Act and for that we rely of the judgment of coordinate Bench in the case of Anant Himatsingka and Manisha Prakash Amin (supra).
To support the family members, the money has been given by the assessee to his son/wife. This is simply a transfer of money from one family member to another family member to support day to day expenses, educational expenses and other family expenses. Going through the facts of case before us, we are of the view that the transaction between son and father and wife and husband, for giving a support and help, in law,is not a loan or deposit in stricter sense of section 269SS of the Act and it is only a financial support, therefore, penalty imposed by the Assessing Officer and confirmed by the ld CIT(A) needs to be deleted, and accordingly we quash both the penalty orders, i.e, under section 269SS and 269T of the Income Tax Act.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
These captioned two appeals filed by the assessee, pertaining to Assessment Year 2010-11, are directed against the orders passed by the ld Commissioner of Income Tax (Appeals)-14, Kolkata, in Appeal No. 205& 206/CIT(A)-14/Wd-47(4)/2013-14, both dated 22.01.2016, which in turn arise out of penalty orders passed by the Assessing Officer under sections 271D and 271Eof the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), both dated 23.09.2013.
2. Since these two appeals relate to the same assessee, same assessment year, identical issues are involved, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The assessee’s appeal in ITA No. 453/Kol/2016, for A.Y. 2010-11, has taken as the lead case.
3. The assessee has raised the following grounds of appeal (in lead case in ITA No. 453/Kol/2016), as follows:
1. For that the ld. CIT(A) ought to have held that the order of penalty u/s 271D is bad in law and is liable to be quashed.
2. For that on the facts and in the circumstances of the case, the ld. CIT(A) was not justified in confirming the penalty u/s 271D amounting to Rs.4,00,000/-.
3. For that on the facts and in the circumstances of the case, the ld. CIT(A) ought to have considered that the transactions were between close relatives and were not in the nature of loan or deposit, and thus, the provision of sec 271D was not applicable.
4. For that the ld. CIT(A) ought to have considered that bona fide belief of the assessee that transactions between close relatives falls outside the ambit of section 269SS of the Act is a reasonable cause falling u/s 273B of the Act.
5. That the appellant craves leave to add, alter or delete all or any of the grounds of appeal.
4. The brief facts qua the issue are that in the assessee`s case under consideration, the assessment u/s 143(3) of the I.T Act was completed by the AO on 31.12.2012 at a total income of Rs. 1,78,630/-. During the course of assessment proceedings, the AO observed that the assessee had accepted loan in cash of Rs. 4,00,000/- on an unspecified date from Shri MithunBanikMazumder, son, in contravention of section 269SS of the I.T. Act. The assessee repaid loans in cash to various family members in contravention of section 269T of the Act. Therefore, the AO initiated penalty proceedings u/s 271D and 271E of the Income Tax Act. The details of repayment of loan is give below:
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