Hence, within the CIT compared to We.P. India (P.) Ltd. sixteen taxmann 407 (Delhi), DHC kept when these types of testing was applied the acknowledgment away from show app funds on around three private restricted organizations to have allocation out of shares about assessee-team can not be handled since the bill out-of mortgage or deposit.

Almost every other conclusion in which it’s been held you to definitely Share app funds gotten during the cash wouldn’t count often so you can financing or put are VLS Dishes (P

As share software currency acquired by the assessee try addressed because the undisclosed money, punishment legal proceeding could not was started below area 269SS see that have section 271D of Income-taxation Work, 1961. CIT versus Roentgen. P. Singh and you will Co. Pvt. Ltd. 340 ITR 0217 (Del) .

Though sections 269SS and you can 269T utilize the terminology “or even than by the an enthusiastic accountpayee cheque or account payee lender draft”this new said specifications are meant to strike onlycash purchases (as clear out-of CBDT Rounded No. 387 dated. 6-7-1984) we.elizabeth. ifthere try purchases which can be “or even than simply of the a free account payee cheque oraccount payee financial draft” nonetheless don’t encompass people course of cash, the fresh new saidtransactions would not be strike from the aforementioned conditions since the demonstratedhereunder.

For the CIT versus. Noida Toll Connection Co. Ltd. (2003) 262 ITR 260 (Delhi) it actually was heldthat whenever zero percentage is generated during the bucks, although same try affected of the journalentry during the books of account from assessee as there are no admission of section269SS whilst to warrant penalty you/s 271D. Govind Ku) 253 ITR 103 (Raj).

From inside the Asst. CIT against. Jag Vijay Vehicles Finance (P.) Ltd. (2001) 78 ITD 378 (Jp.)it actually was stored that the head target out-of area 269SS are so you’re able to restrict the system oftaking unaccounted bucks or unaccounted deposits otherwise than simply by the anaccount payee cheque otherwise membership payee write.

Though the non-payments according to the aforementioned sections would typically excel during the time of evaluation procedures just, this type of penalty procedures try separate off testing procedures. Actually initiation of these process payday loans Southgate MI try independent of testing procedures and and therefore part 275 has actually been through drastic changes to carry out like legal proceeding.

Where in actuality the amount wastransferred because of the dumps as a result of transfer coupon codes, the new number inquestion might possibly be said to had been paid during the the business’s financial accountthrough correct financial streams according to heart off area 269SS and, therefore, theassessee team cannot getting thought to keeps violated the fresh new provisions from section269SS

Penalty procedures less than area 271D or 271E had been independent proceedings and you will had nothing in connection with review process or their benefit. For this reason, CIT(A) wasn’t justified when you look at the cancelling brand new orders imposing penalty on soil your assessment procedures, during and that, punishment significantly less than part 271D and you will 271E was in fact started was stored to-be invalid.

Assessee regarding the appeals prior to CIT(A) contended you to definitely your investigations sales where in actuality the penalty process lower than section 271D and you will 271E was indeed initiated was basically quashed thus this new sales imposing punishment less than section 271D and you may 271E must end up being quashed. CIT(A) approved new contention and you may quashed new sales imposing penalty. It absolutely was stored that so far as imposition regarding penalty under point 271D or 271E is actually worried, people was separate procedures and having nothing in connection with review procedures or the outcome. Hence, CIT(A) was not warranted inside cancelling the brand new purchases imposing punishment for the ground the comparison legal proceeding, for the duration of hence, penalty around section 271D and you will 271E was basically started was actually kept becoming invalid. Aside from the fact that the order carrying new tests to become invalid hadn’t feel last, CIT(A) ought not to has actually terminated the brand new requests towering penalty about this soil. While the, CIT(A) hadn’t adjudicated the issue towards deserves, just the right movement is to remit practical question from imposition regarding penalty to your CIT(A) to have fresh planning, leaving every aspect open (Related Evaluation Age : 2009-2010 to 2011-12) – [DCIT v. C. Gangadhara Murthy – Big date out of Judgement : (ITAT Bangalore)].