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Issues involved:
1. Confirmation of penalty under section 271D of the IT Act for receiving a cash loan. 2. Confirmation of penalty under section 271E of the IT Act for debiting an amount in an account. Issue 1: Confirmation of penalty under section 271D: The appeal arose from the confirmation of a penalty of Rs. 1,15,000 under section 271D of the IT Act for allegedly receiving a cash loan in violation of section 269SS. The Assessing Officer noted that the assessee received a loan of Rs. 1,15,000 in cash from a company, leading to the penalty. The assessee explained that the cash belonged to the other company and was handed over for safekeeping, but the Assessing Officer rejected the explanation. The appellate tribunal considered the entries in the cash book and the loan account of the other company to support the assessee's claim. Citing legal precedents, the tribunal concluded that the penalty under section 271D was not justified as there was no intention to take a loan, and the transaction was genuine and open, not involving unaccounted money. Therefore, the penalty was directed to be deleted. Issue 2: Confirmation of penalty under section 271E: The second appeal was against the confirmation of a penalty of Rs. 74,192 under section 271E for debiting an amount in an account, violating section 269T. The explanation provided was that the amount was taken by a director to meet expenses on behalf of another company, and the balance was adjusted through a journal entry. The tribunal, considering the same facts and arguments as in the first issue, concluded that the penalty under section 271E was not warranted. Therefore, the penalty of Rs. 74,192 was also directed to be deleted. In both appeals, the tribunal found that the penalties imposed were not justified based on the explanations provided, the genuine nature of the transactions, and the absence of evidence supporting the alleged violations of the IT Act sections. As a result, both appeals were allowed, and the penalties were deleted.
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