INCOME TAX ACT, 1961

Section 271D Section 271E

Penalty under sections 271D & 271E - Contravention of section 269SS - Assessee pleaded concerned loan transactions to be mere journal entries without actual receipt of cash -

AO noticed that assessee had accepted loan of Rs. 2,94,000 in cash from one 'H'. Accordingly, AO levied penalty under section 271D on alleged contravention of section 269SS. Assessee's case was that amounts received from 'H' was disclsoed under the head 'Current accounts' in books of account of the assessee and not under the head 'loans'. Further, Rs. 2,94,900 was paid by 'H' on behalf of assessee, for purchase of flat at Bangalore. The payment was made directly to the builder and said payment was recorded in assessee's books of account by passing of a journal entry without actually receipt of cash and mere journal entries would not attract the provisions of section 269SS.Held: Passing of journal entry without actual receipt of cash would not attract provisions of section 269SS. Assessee placed on record only ledger account of 'H in the books of account of assessee,. To understand whether impugned transaction was a journal entry, ledger account of developer in books of assessee was also to be perused. In absence of same, in the interest of justice, issue was restored to AO to examine whether assessee in her books of account only passed a journal entry and was not in receipt of money from 'H'.

Supported by:CIT v. Noida Toll Bridge Co. Ltd. [(2003) 262 ITR 260 (Del.) : 2003 TaxPub(DT) 986 (Del-HC)].

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2007-2008

INCOME TAX ACT, 1961

Section 271D Section 271E

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