COMMISSIONER OF INCOME TAX Vs. M.YESODHA

JUDGEMENT

(1.) The Revenue has come forward with this appeal and the same was admitted on the following substantial question of law:

(2.) The assessee, for the assessment year 2005-2006, claimed loan of Rs.20,99,393/- taken from her father-in-law for purchasing the property. The Assessing Officer initiated penalty proceedings under Section 271D of the Income Tax Act, 1961 on the ground that the assessee had obtained a loan of Rs.20,99,393/- in cash from her father-in-law, which is in contravention of the provision of Section 269SS of the Income Tax Act. During the penalty proceedings, the assessee claimed that the amount received in cash from her father-in-law - M.Kathirvel, was a gift and not a loan. The Assessing Officer held that the assessee received the amount as a loan and not as a gift, because the same was shown as a loan in the balance sheet of the assessee, which was filed along with the return of income. Hence,the Assessing Officer levied penalty of Rs.20,99,393/-.

(3.) The assessee challenged the penalty levied by the Assessing Officer before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) dismissed the appeal holding that the Assessing Officer has rightly levied penalty under Section 271D of the Income Tax Act after giving opportunity to the assessee and on being fully satisfied that the amount in cash taken by the assessee from her father-in-law was not a gift but only a loan.