The Income Tax Appellate Tribunal (ITAT), Kolkata bench on Wednesday held that cash transaction between close family members for giving a support and help would not attract penalty under section 269SS of the Income Tax Act, 1961.
The assessee, in the instant case, accepted a cash loan of Rs. 4,00,000/- from his son. Out of this, he repaid rs. 1,50,000/-. Assessee repaid the loan to his another son Sri Indranil Banik Mazumder at Rs. 2,25,098/- and also repaid the loan to his wife Smt. Sandhya banik Mazumder at Rs.54,928/.
The Assessing Officer imposed the penalty under sections 271D and 271E of the Income Tax Act, 1961 on the assessee by observing that the assessee has accepted the loan in cash and paid the loan in cash.
On the second appeal by the assessee, the bench observed that all these transactions are between husband and wife, and between father and son, being a close relative of one family. The bench also notes 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 on 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.”
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