No penalty attracted if there was reasonable cause in accepting loans in contravention of sec. 269SS; SLP dismissed by SC

 

Adinath Builders (P.) Ltd

[2019] 102 taxmann.com 57 (SC)

SLP dismissed against High Court ruling that receipt of deposits/loans received through journal entries is in breach of section 269SS

Section 269SS, read with sections 271D and 273B, of the Income-tax Act, 1961 – Deposits

Mode of taking or accepting (Journal entries)

High Court by impugned order held that receipt of any advance or loan by way of journal entries is in breach of section 269SS

It further held that journal entries constitute a recognized mode of recording of transactions and in absence of any adverse finding by authorities that journal entries were made with a view to achieve purpose outside normal business operations or there was any involvement of money, there was a reasonable cause for not complying with section 269SS and penalty under section 271D was not to be imposed

Whether Special Leave Petition filed against impugned order was to be dismissed

Held, yes