Commissioner of Income Tax vs Speedways Rubber Pvt. Limited

Adarsh Kumar Goel, J.—This appeal has been preferred by the Revenue u/s 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 31-12-2008, of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in I.T.A. No. 388/(ASR)/2008, for the assessment year 2001-02, proposing to raise the following question of law:

Whether on the facts and in the circumstances of the case (having violated the provision of Section 269SS of the Act) the Income Tax Appellate Tribunal was right in law in deleting the penalty imposed u/s 271D of the Income Tax Act, 1961 ?

The assessing officer initiated proceedings for alleged violation of Section 269SS of the Act inasmuch as the assessee accepted share application money being Rs. 20,000 in cash. Thereafter, penalty was imposed. On appeal, the Commissioner (Appeals) upheld the stand of the assessee that the amount received was not loan or deposit and no interest was payable. It was further held that the transaction was bona fide and default was of technical nature and in any case, the amount was received from the public and not from directors or shareholders. The Tribunal affirmed the said view. Reliance was placed on following judgments:

(i) Hindustan Steel Ltd. Vs. State of Orissa, ;

(ii) Commissioner of Income Tax Vs. Kharaiti Lal and Co., ;

(iii) Commissioner of Income Tax Vs. Maheshwari Nirman Udyog, ;

(iv) Commissioner of Income Tax Vs. Lakshmi Trust Co., ;

(v) Commissioner of Income Tax Vs. Indore Plastics P. Ltd., ;

(vi) The Commissioner of Income Tax Vs. Idhayam Publications Limited, ; and

(vii) Commissioner of Income Tax, U.P.-II, Lucknow Vs. Bazpur Co-operative Sugar Factory Ltd., Bazpur, Distt. Nainital, .

The judgment of the Jharkhand High Court in Bhalotia Engineering Works Pvt. Ltd. Vs. Commissioner of Income Tax, was held to be distinguishable.

We have heard learned Counsel for the appellant.

The only point which has been pressed is that the amount should have been held to be loan or deposit, as held in Bhalotia Engineering Works Pvt. Ltd. Vs. Commissioner of Income Tax, .

We do not find any merit in the contention raised. The finding to the effect that the transaction was bona fide and the default was of technical nature which did not justify levy of penalty is not shown to be, in any manner, perverse or unreasonable.

No substantial question of law arises.

The appeal is dismissed.