JAGVIJAY AUTO FINANCE P LTD Vs. ASSISTANT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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M.A.A. Khan, Judicial Member -
(1.) THIS is an appeal from the order dated 5-8-1993, whereby the learned Commissioner of Income-tax (Appeals), Rajasthan-I, Jaipur. CIT(A) confirmed part penalty imposed by the Deputy Commissioner of Income-tax (DCIT) Under Section 27 1D of the Income-tax Act, 1961 (the Act) for violation of the provisions of Section 269SS of the Act.
(2.) The relevant facts are these:
The assessee-appellant is a private limited company owned by Sri Jagdish Prasad, his wife Smt. Laxmi Devi, their sons S/Sri Ravindra Kumar and Sunil Kumar and some other members of the family. In the course of assessment proceedings in the case of the assessee-company for A. Y. 1990-91 the AO noticed the following receipts viz. -
The AO was of the opinion that since the assessee-company had taken or accepted the abovementioned receipts otherwise than by account payee cheques of account payee bank drafts in violation of the provisions of Section 269SS of the Act, default punishable Under Section 27 ID was committed by the assessee-company. He, therefore, referred the matter to the DCIT, Alwar for his consideration. On being required by the learned DCIT, the assessee-company explained that in the cases of Smt. Laxmi Devi and Sri Ravindra Kumar the amounts were received through account payee transfer vouchers of Bank of Rajasthan, Alwar wherein both the parties had their Savings Bank Accounts and, therefore, there was no violation of the provisions of Section 269SS. The AO did not accept this explanation. In regard to the receipts from Sri Sunil Kumar, the assessee-company explained that receipt of Rs. 7, 000 on 12-10-1989 fell short of the prescribed limit of Rs. 20, 000 so as to attract the provisions of Section 269SS and the receipt of Rs. 34, 000 on 20-2-1990 was towards the allotment of the shares of the assessee-company and, therefore, did not fall within the purview of either "loan" or "deposit". The AO did not accept this explanation too. He, therefore, levied a penalty of Rs. 1, 94, 200 Under Section 27ID of the Act. In appeal, however, the learned CIT(A) accepted assessee's explanation in respect to the receipts from Smt. Laxmi Devi and Sri Ravindra Kumar and cancelled penalty referable to the amounts received from them. But with regard to the receipts of Rs. 7, 000 on 12-10-1989 and Rs. 34, 000 on 20-1-1990 from Sri Sunil Kumar, the learned CIT(A) held that the receipt of Rs. 7, 000 would go to make the aggregate amount of Rs. 20, 000 or more and that the receipt of application money of Rs. 34, 000 amounted to "loan" or "deposit" within the meaning of the terms used in the language of Section 269SS. He, therefore, confirmed the penalty of Rs. 41, 000 referable to the amounts received from Sri Sunil Kumar.
(3.) MR. C. L. Jhanwar, the learned counsel appearing for the assessee-company has advanced two-fold arguments. In the first place the learned counsel submitted that the acceptance of Rs. 7, 000 on 12-10-1989 by the assessee-company from Sri Sunil Kumar did not result in violation of the provisions of Section 269SS in as much as the subsequent acceptance of Rs. 34, 000 on 20-2-1990 would not be considered for finding out such violation. This argument seems to be correct but would not result in any benefit to the assessee-company if the acceptance of Rs. 34, 000 on 20-2-1990 by the assessee-company is held to be acceptance of "loan" or "deposit".;
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