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Cash Loan from Parents and Brother for purchasing House for whole Family do not attract Penalty

In ITA No.7792/Del/2018, Sonia Malik vs Vs. JCIT, the assessee is an individual deriving income from salary and other sources. The Assessing Officer completed the assessment determining the total income at Rs.34,12,062/- wherein he disallowed an apart of the long-term capital gain claimed by the assessee u/s 54F of the Income Tax Act apart from making the addition of Rs.57,538/- on account of interest and Rs.8,160/- under the head ‘Salary.’ The officer further levied penalty under section 271D on the ground that the assessee had taken cash loan of Rs.1,25,000/- from Shri Darshan Singh Gujral, Rs.1,00,000/- from Smt. Joginder Kaur and Rs1 lakh from Shri Gurdeep Singh Gujral and, therefore, she has violated the provisions of section 269SS.

The Delhi bench of the Income Tax Appellate Tribunal noticed the decision of the Punjab & Haryana High Court in the case of CIT vs. Sunil Kumar Goel wherein it was held that ‘a family transaction, between two independent assessees, based on an act of casualness, specially in a case where the disclosure thereof was contained in the compilation of accounts, and which had no tax effect, established ‘reasonable cause’ under section 273 B of the Act’ and, therefore, the provisions of section 271D are not applicable and  ruled that the cash loan received from the parents and brother of the assessee for the purchase of the house for the whole family cannot be penalized under Section 271D of the Income Tax Act.

Article referred: https://www.taxscan.in/cash-loan-parents-brother-purchasing-house-whole-family-attract-penalty-itat/35781/

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