In instant case, where the family of the assessee was guided by its internal family requirement and at the same time, pooling in the family funds especially where the assessee did not have any known sources of income, the explanation of the assessee deserved to be appreciated and the approach of the revenue needs to be flexible for appreciating the reasonability of the explanation so submitted by the assessee.
Further, the assessee had explained the payment of construction expenses which were required to be incurred in cash towards the purchase of construction material and payment to labourers.
It may be noted that the order doesn’t discuss the applicability of Section 269ST as the case is related to Assessment Year 2009-10, whereas the provisions of section 269ST are applicable w.e.f. Assessment Year 2017-18.
Conclusion :
1. Where assessee received substantial amount of cash from her husband which was used to purchase property for residence of family members, since amount was used for benefit of family not for business purpose and assessee provided reasonable explanation justifying cash transactions, no penalty could be levied under section 271D for voilation of section 269SS.
2. The transaction was not loan as no interest element was involved and there was no promise to return amount with or without interest.
