9911796707
TMI BlogAmount of loan was taken in case in violation of section 269SS - if business exigency is proved - no penalty is imposable u/s 271DX X X X Extracts X X X X X X X X Extracts X X X X ..... Amount of loan was taken in case in violation of section 269SS - if business exigency is proved - no penalty is imposable u/s 271D - Commentaries / Editorials Dated:- 7-10-2008 - News - In the present matter, 2008 -TMI - 30820 - MADRAS HIGH COURT has decided the following issue: Whether no penalty is leviable under section 271D, on the ground that taking a loan in cash for depositing into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's bank to make necessary arrangements for honouring cheques is a reasonable cause for violating the provisions of section 269SS of the Income-tax Act?" In this case AO found that during the AY 1993-94 the assessee had availed of cash borrowings exceeding Rs. 20,000 for about 36 times in the course of the year attracting section 269SS of the Act which contemplates that all borrowings ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding Rs. 20,000 should only be in the form of cheque or demand draft. In this assessee has proved that: (i) there was business exigency forcing the assessee to take cash loans for the purpose of honouring the commitment, viz., issuance of cheque on a particular date; (ii) the creditors were genuine persons and the transactions were never doubted by the authorities below; (iii) there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no revenue loss to the State exchequer, and satisfied that the assessee has shown reasonable cause for the above transactions; (iv) all the transactions were brought into account of the assessee and there were corresponding entries in the books of account of the respective parties/creditors which satisfied the test of business exigency. Therefore, honorable HC affirmed the decision of tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in which tribunal has held that no penalty is leviable under section 271D. (For full text of judgment - visit 2008 -TMI - 30820 - MADRAS HIGH COURT ) Also see the following cases in which penalty u/s 271D has been deleted; 2008 TMI - 30802 - MADRAS HIGH COURT 2008 TMI - 30758 - MADRAS HIGH COURT 2008 TMI - 30746 - GUJARAT HIGH COURT 2008 TMI - 30707 - MADRAS HIGH C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT 2008 TMI - 30115 - RAJASTHAN HIGH COURT - News - Press release - PIB Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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