The Rajkot bench of the Income Tax Appellate Tribunal (ITAT) consisting of Shri Waseem Ahmed (Accountant Member) and Shri Siddhartha Nautiyal (Judicial Member) has held that the cash loan accepted from the proprietary concern of the father of the assessee cannot attract the provisions of section 269SS and the consequent penalty under section 271D of the Income Tax Act, 1961.
The assessee, Kalpesh Mahidas Maradia had received amount of Rs.12,49,526/- in cash from M/s Ghanshayam trading company, which was a proprietary concern of the assessee’s father Shri Mahidas Maradia. The Additional CIT held that receipt of the cash deposit exceeding Rs.20,000/- was in violation of provisions of section 269SS and imposed penalty u/s 271D of the Act.
Before the Tribunal, the assessee challenged the order and the levy of penalty.
The Tribunal, relying on a catena of decisions, held that the 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.”
Shri M.N. Manvar appeared for the assessee.
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