COMMISSIONER OF INCOME-TAX; JOINT COMMISSIONER OF INCOME-TAX; INCOME TAX OFFICER Vs. K SRINIVASULU REDDY

JUDGEMENT

(1.) These appeals by the revenue under Section 260-A of the Income Tax Act, 1961 (for short 'the Act') are directed against the order dated 2nd May 2012 passed by the Income Tax Appellate Tribunal, 'A' Bench, Bangalore in ITA No. 1132/Bang/2010 relating to the assessment year 2005-06 of the assessee.

(2.) During the assessment year under question, the assessee had made certain payments to the creditors which were beyond a sum of Rs.20,000/- and which were not in cheque form but in cash. The Assessing Officer applying the provisions of Section 269-T of the Act levied penalty of Rs. 4,64,540/- under Section 271E of the Act claiming it as expenditure in question and repayment of loan was not in cheque form but in cash.

(3.) The assessment was concluded on such premise resulting in penalty under Section 269T. The assessee appealed to the Commissioner of Income Tax (Appeals), Bangalore and got substantial relief to sustain the penalty of Rs.1,80,000/- and allowed the relief to the extent of Rs.2,84,540/-. The revenue appealed against this order to the Tribunal questioning the granting of relief to the extent of Rs.2,84,540/- and so also the assessee questioning the sustainance of penalty of Rs.1,80,000/-.