Law:

Section:

Section 271D of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269SS - Assessee claimed certain amount received as advance against sale of truck - Assessing Officer levied penalty under section 271 D by considering amount in question as a loan or deposit received in violation of section 269SS - Tribunal, however, deleted penalty holding that amount had been utilized by assessee for making payment to financier and also for making cabin body which proved that amount was an advance relating to transaction involving sale of truck - Whether since findings recorded by Tribunal were pure findings of fact based on appraisal of evidence on record, no substantial question of law arose out of order of Tribunal - Held, yes FACTS The assessee had received a certain amount advanced by 'D'. The Assessing Officer levied penalty under section 271D by considering that amount as a loan or deposit. He discarded the explanation of the assessee that the amount was an advance for purchase of truck on the ground that no agreement had been executed while advancing the amount and the same had been executed after the return had been filed. On appeal, the Commissioner (Appeals) sustained the penalty imposed by the Assessing Officer. On further appeal, the Tribunal held that the amount had been utilized by the assessee for making the payment of the instalments against the loan received from the financier and also for making the cabin body, which proved that the amount received by the assessee was related to the transaction involving the sale of the truck. Furthermore, both the parties had furnished the affidavit dated 1-4-1999 before the notice under section 271D was issued and the same had not been rebutted by the Assessing Officer by bringing out any material on record. Thus, the amount received by the assessee was in the form of advance and not a loan as alleged by the department and, therefore, the provisions of section 269SS were not applicable and no penalty under section 271D was leviable. On appeal : HELD A bare perusal of the order of the Tribunal showed that the findings recorded by the Tribunal were pure findings of fact based on appraisal of evidence on…

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