No penalty for loan transactions in cash between spouses: Delhi ITAT.
Facts of the case
The assessee engaged in the business of metal trading and
sale-purchase of livestock filed its return. The assessee had taken loan from
his wife. However, the assessee claimed that mistakenly an additional amount of
Rs.3 lakhs was also shown as loan from wife. The AO, on account of
unsatisfactory explanation of such amount by assessee, made addition of Rs. 3
lakhs to his income. So aggrieved, the assessee appealed to CIT(A), who further
made an addition of Rs.55 lakhs as unexplained cash amount u/s 68. Further
aggrieved, the assessee appealed before ITAT.
On hearing the appeal, the ITAT held that-
Whether penalty can be imposed for loan given in cash in excess of
the permissible limit for cash transactions, but where such transaction happens
between spouses – NO: ITAT
The tribunal noted that the amount of Rs. 58
lacs was transferred by the assessee through banking channel only. The account
ledger of the Axis Bank of M/s Paramount Trading Co. was also filed by the
assessee before the CIT(A) to explain that the amount was transferred out of
the explained sources of the assessee. However, there was no incidence of pre
cash deposit before transfer, neither any such incidence was discussed by the
CIT(A). The tribunal also noted that the provisions of section 68 are
applicable in case where the credit was received by the assessee. However, in
the present case, the position is entirely different, as the amount of Rs. 58
lacs was not received by the assessee rather the amount was paid by the
assessee to his wife out of his explained sources. Hence, the addition in
dispute made in the hands of the assessee should not be taxed and therefore,
the same should be deleted and accordingly, the appeal of the assessee stands
allowed.
The tribunal heard both the parties and perused
the records, especially the impugned order as well as the ITAT, ‘G’ Bench
decision dated 20.6.2018 in the case of Sunil Kumar Sood vs. JCIT. It noted
that assessee received advance money of Rs. 22 lacs from the four parties for
the property no. 3498, Gali Sangrasha, Bara Hindu Rao, Delhi – 6. Due to some
reasons, the deal was not materialized and the purchaser parties agreed to take
another property which is in the name of assessee’s wife. The said amount was
transferred to his wife’s account i.e., Mrs. Shahina Qureshi. It further noted
that there was no denial on the part of the AO that the amount of Rs. 22 lacs
was received by the assessee from his wife, Mrs. Shahina Qureshi. However,
while levying the penalty u/s. 271D of the Act, the AO did not appreciate the
fact that the provisions of section 269SS of the Act are not applicable on the
loan transaction between husband and wife. Thus, the question of levying of
penalty u/s. 271D of the Act does not arise on the impugned transaction, hence,
It deleted the penalty in dispute and allowed the appeal of the assessee.
