Receipt Of Huge Sale Consideration In Cash Is Violative To Sec 269SS, And Calls For Levy Of Penalty U/s 271D: Chennai ITAT
Pankaj Bajpai
28 March 2024 2:00 PM GMT
The Chennai ITAT recently clarified that receipt of sale consideration of huge amount of Rs. 1.60 Crores in cash, which is, in violation of the provisions of section 269SS (this section restricts cash receipts over & above twenty thousand) of the Income tax Act, rightly deserves levy of penalty u/s 271D. The Bench of V. Durga Rao (Judicial Member) & Manjunatha, G....
The Chennai ITAT recently clarified that receipt of sale consideration of huge amount of Rs. 1.60 Crores in cash, which is, in violation of the provisions of section 269SS (this section restricts cash receipts over & above twenty thousand) of the Income tax Act, rightly deserves levy of penalty u/s 271D.
The Bench of V. Durga Rao (Judicial Member) & Manjunatha, G. (Accountant Member) observed that “The contention of the assessee is not acceptable by any Court of Law, claiming to have wrong entry has been made in a document, which was duly signed by both the vendor and purchaser and registered by the Sub-Registrar of the State Revenue Department in the absence of any material evidence”. (Para 6)
As per the brief facts of the case, during verification conducted by the DIT(I&CI), Chennai, it was found that the assessee sold an immovable property of SRO Virugambakkam and part of the sale consideration of Rs. 1.60 Crores was received in cash. On receipt of such information, the AO issued notice under section 274 r.w.s. 271D. Though the assessee appeared before the AO, but could not offer any reasonable cause for accepting the sale consideration of the immovable property by cash, the AO levied penalty u/s 271D for accepting the sale consideration of immovable property otherwise by way of an account payee cheque or account payee bank draft without reasonable cause and violating the provisions of section 269SS.
The Bench referred to the registered deed of sale, to find that the assessee has received part of sale consideration of Rs. 1.60 Crores in cash.
However, the contention of the assessee is that the consideration clause of the deed of sale had wrongly entered the transaction in mode of cash while in reality it was an adjustment of an existing debt through a journal entry, added the Bench.
The Bench clarified that the assessee should have approached the Appellate Authority of the Tamil Nadu State Revenue Department for any modification/addition/deletion, etc., which was not done in this case.
Hence, the ITAT concluded that the penalty was rightly levied under section 271D of Income tax Act.
Counsel for Appellant/ Taxpayer: J.K. Reddy
Counsel for Respondent/ Revenue: AR V Sreenivasan
Case Title: Nammalvar Lingusamy verses Additional CIT
Case Number: I.T.A. No.532/Chny/2022
