Sum received from husband with no intention to repay isn’t loan; no violation of Sec. 269SS: ITAT

Case Details: Smt. Meera Devi Kumawat v. JCIT - [2021] 132 taxmann.com 21 (Jaipur - Trib.)

Judiciary and Counsel Details

• • Sandeep Gosain, Judicial Member and Vikram Singh Yadav, Accountant Member
  • Rahul Sanghi, CA for the Assessee. 
  • Smt. Monisha Choudhary for the Revenue.

Facts of the Case

Assessee was an illiterate individual having income from renting of marriage garden. Assessing Officer (AO) noted that assessee’s husband had given her loan of Rs. 9,00,000. The assessee was asked to show cause as to why penalty under section 271D should not be levied?
The assessee submitted that she had received Rs. 6,00,000 by way of demand draft for payment towards the purchase of plot and remaining Rs. 3,00,000 was received in cash. She stated that the cash of husband and wife could not be separated as it is in joint custody. Therefore, it cannot be taken as a loan. However, AO rejected assessee’s contention. On appeal, CIT(A) also upheld the order of AO. Aggrieved-assessee filed the appeal before the Tribunal.

ITAT Held

The Tribunal has held that the assessee had offered a reasonable explanation justifying the cash transaction. The provision of Sec 269SS does not bar genuine cash transactions of loans but only bar those transactions which are entered with the intention of evade taxes. In the instant case, the assessee had not evaded any tax but only purchased a property with her husband’s help for the residence of her family members.
Further, there was no relationship of the debtor and creditor between husband and wife. There was also no interest part in the amount. The transaction did not involve any interest element, and there was no promise to return the amount with or without interest. Accordingly, no penalty should be levied for violation of the provisions of section 269SS.