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THE COMMISSIONER OF INCOME-TAX, HISSAR v. M/S HARGOPAL RAJENDER KUMAR ANAJ MANDI, - ITA-389-2004  RD-P&H 126 (31 August 2005)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Income-tax Appeal No.389 of 2004
Date of decision:5th
The Commissioner of Income-tax, Hissar
Mr. Rajesh Bindal, Advocate
M/s Hargopal Rajender Kumar Anaj Mandi, Ratia.
Hon'ble Mr.Justice D.K.Jain, Chief Justice Hon'ble Mr. Justice Hemant Gupta
1. Whether Reporters of local papers may be allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest? D.K.Jain, C.J. (Oral)
This appeal by the Revenue under Section 260-A of the Income-tax Act, 1961 (for short, `the Act') is directed against order, dated I.T.A.No.389 of 2004 
29.4.2004, in ITA No.2460/DEL/99, pertaining to the assessment year 1995-96. By the impugned order, the Income-tax Appellate Tribunal, New Delhi (for short, `the Tribunal') has upheld the deletion of penalty of Rs.5,32,060/- imposed on the assessee under Section 271-E of the Act, by the Commissioner of Income-tax (Appeals).
2- According to the Revenue, the order of the Tribunal involves the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the penalty of Rs.5,32,060/- levied under Section 271E of the Income-tax Act, 1961 by the DCIT without appreciating the intention of the Board's circular No.556 where it is provided that the unremitted sale proceeds would assume the character of a deposit if the amount is retained by the Kacha Aahartia in pursuance of a direction in this regard by the agriculturist, irrespective of whether the amount is retained in the same account or transferred to different accounts and irrespective of whether the directions are to call it a deposit or just retain the same for furture payment ?"
3- Having heard Mr. Bindal, learned counsel for the Revenue, we are of the view that the appeal is utterly misconceived. While deleting I.T.A.No.389 of 2004 
the penalty, the Commissioner (Appeals) has found that apart from the fact that genuineness of the transaction, which was in the nature of payment in cash by Kacha Aahartia to the agriculturist, out of the sale proceeds of his produce, was not in dispute, there was also a reasonable cause, within the meaning of Section 273B of the Act, in making such payment in cash.
While upholding the said order, the Tribunal has also relied on a circular issued by the Central Board of Direct Taxes (for short, `the Board') on 23.2.1990, explaining the scope of Section 269T of the Act. In the said circular, it has been clearly stated that where a Kacha Aahartia sells goods belonging to an agriculturist, the sale proceeds thereof, which remained with him, could not be regarded as "deposit" made by the agriculturist with the Kacha Aahartia and further where Kacha Aahartia remits only a part of the sale proceeds to the agriculturist, the unremitted part of the sale proceeds would also not assume the character of a deposit. It has been clarified that repayment of such sale proceeds would not fall within the purview of Section 269T of the Act.
4- In the light of the said clarification by the Board, which is binding on the Revenue, no question of law, much less a substantial question of law, survives for our consideration.
I.T.A.No.389 of 2004 
5- Accordingly, we decline to entertain the appeal. Dismissed.
( D. K. Jain )
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