Therefore, into the CIT compared to I.P. Asia (P.) Ltd. 16 taxmann 407 (Delhi), DHC stored that when this type of testing try applied new acknowledgment off show application funds on the about three personal limited enterprises to possess allocation out-of offers regarding the assessee-organization can not be managed just like the receipt away from financing or deposit.

Other conclusion for which it has been held one to Express application monies obtained for the cash won’t matter often to help you that loan otherwise deposit is VLS Food (P

While the share app money received from the assessee is actually addressed as the undisclosed earnings, punishment proceedings couldn’t was indeed started under area 269SS realize with point 271D of your own Income-income tax Act, 1961. CIT vs Roentgen. P. Singh and Co. Pvt. Ltd. 340 ITR 0217 (Del) .

No matter if areas 269SS and you can 269T utilize the terms and conditions “or even than just from the an enthusiastic accountpayee cheque or account payee bank draft”the latest told you arrangements should hit onlycash deals (due to the fact clear regarding CBDT Round No. 387 dated. 6-7-1984) we.e. ifthere is actually transactions which are “if not than just because of the a merchant account payee cheque oraccount payee bank draft” nonetheless don’t include people direction of money, the fresh new saidtransactions wouldn’t be struck by the aforementioned terms as demonstratedhereunder.

Within the CIT against. Noida Toll Link Co. Ltd. (2003) 262 ITR 260 (Delhi) it was heldthat when no fee is established for the bucks, but the exact same is actually effected because of the journalentry inside instructions away from membership regarding assessee and there is no admission out-of section269SS in order so you can warrant penalty you/s 271D. Govind Ku) 253 ITR 103 (Raj).

Within the Asst. CIT versus. Jag Vijay Vehicles Funds (P.) Ltd. (2001) 78 ITD 378 (Jp.)it actually was stored that the main object away from section 269SS was so you can counter the machine oftaking unaccounted dollars or unaccounted dumps if not than simply from the anaccount payee cheque or membership payee write.

Even though the defaults within the aforementioned parts manage generally get noticed at the time of research legal proceeding just, these penalty legal proceeding was independent out-of assessment process. Even initiation of those process try separate of review process and you can and this section 275 possess undergone radical changes to undertake such as for example legal proceeding.

The spot where the matter wastransferred because of the places through transfer discounts, the newest quantity inquestion might possibly be considered was credited in their bank accountthrough best financial streams as per spirit of part 269SS and you will, thus, theassessee organization couldn’t getting believed to features violated the latest provisions regarding section269SS

Penalty process not as much as part 271D or 271E had been separate procedures and you can got nothing to do with review proceedings or the lead. Hence, CIT(A) was not rationalized in cancelling this new orders imposing penalty towards the ground your comparison process, during the course of and that, penalty lower than part 271D and 24 hour payday loans Garden City Park New York you will 271E were started was held to be invalid.

Assessee on the appeals prior to CIT(A) argued one the investigations commands where in fact the penalty legal proceeding not as much as area 271D and you can 271E was started was basically quashed so because of this the new sales towering punishment lower than part 271D and you may 271E must also getting quashed. CIT(A) accepted this new contention and you can quashed the new instructions towering punishment. It absolutely was held that so far as imposition regarding penalty significantly less than point 271D otherwise 271E try worried, men and women have been separate legal proceeding and achieving nothing in connection with investigations procedures or its result. Therefore, CIT(A) wasn’t rationalized into the cancelling the latest sales imposing penalty to your floor your investigations procedures, during the course of hence, penalty under section 271D and you can 271E was indeed initiated was kept to get invalid. Aside from the proven fact that the order holding the fresh new assessments to end up being incorrect had not end up being final, CIT(A) should not have terminated the brand new instructions towering punishment on this subject floor. Since the, CIT(A) had not adjudicated the issue on deserves, suitable direction is always to remit issue away from imposition away from penalty with the CIT(A) to possess fresh planning, leaving all facets discover (Associated Assessment Age : 2009-2010 to 2011-12) – [DCIT v. C. Gangadhara Murthy – Go out from Judgement : (ITAT Bangalore)].