IT: 'Earnest Money' not a loan or deposit; its repayment in cash does not violate section 269T provisions

IT: 'Earnest Money' not a loan or deposit; its repayment in cash does not violate section 269T provisions

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[2013] 37 taxmann.com 349 (Gujarat)

HIGH COURT OF GUJARAT

Commissioner of Income-tax -VI

v.

Madhav Enterprise (P.) Ltd.*

M.R. Shah AND MS. SONIA GOKANI, JJ.

Tax Appeal No. 561 of 2013†

JULY  3, 2013 

Section 269T, read with section 271E of the Income-tax Act, 1961 - Deposit - Mode of repayment [Earnest money] - Assessment year 2006-07 - Whether, where assessee-company, engaged in construction, repaid earnest money/advances to certain parties in cash, section 269T was not applicable as repayments were not in nature of repayment of loan or deposits - Held, yes -Whether, therefore penalty under section 271E for violation of section 269T, for making payments in excess of Rs. 20,000 in cash, could not be levied - Held, yes [Para 7] [In favour of assessee]

Mrs. Mauna M. Bhatt for the Appellant.