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TMI Blog2014 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... icable even though the Tribunal having found that the assessee had borrowed loans aggregating to Rs. 20,000/- or more otherwise than through accounting payee cheque or draft in contravention of Section 269 SS? "T.C.(A)No.760 of 2014: Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that Section 269T read with Section 271E is not applicable even though the Tribunal having found that the assessee had repaid the loans in cash, otherwise than by a accounting payee cheque or draft in contravention of Section 269T?"" 2. In the above Tax Case (Appeals), the Revenue has challenged the orders of the Tribunal relating to the levy of penalty under Sections 271D and 271E of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals), who confirmed the order of the Assessing Officer, thereby dismissed the appeals. Aggrieved by the same, the assessee preferred appeals before the Income Tax Appellate Tribunal. The Tribunal allowed the appeals filed by the assessee - both in respect of quantum as well as penalty. Aggrieved by the same, the Revenue is before this Court challenging the order of the Tribunal with regard to the levy of penalty only. 5. Heard learned standing counsel appearing for the Revenue and perused the materials placed before this Court. 6. The Tribunal decided the quantum appeal in I.T.A.No.1284/Mds/2010 holding that the payment made towards accounting charges to the site accountants was wrongly disallowed under Section 40a(ia) of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal observed that the Assessing Officer declined to look into those affidavits for paucity of time and summarily rejected the evidence, as not acceptable. The Tribunal found that the Assessing Officer did not deal with the explanation given by the assessee, which is based on individual affidavit of the persons from whom the money was borrowed, duly notarised. The Tribunal, however, gave credence to those statements made on oath and held that it was the duty of the Officer to examine the same before any decision is taken on the correctness or otherwise of the deposition made in the affidavit. Placing reliance on the decision reported in the case of Mehta Parikh & Co., reported in 30 ITR 181, the Tribunal decided the quantum appeal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted and extracted in the order of the Tribunal. The relevant portion of the order of the Tribunal reads as follows for better clarity: "18. After considering the rival submissions, we are of the considered opinion that this penalty is not exigible. In view of the extenuatory circumstances as explained by the assessee in the above part of the order. We have deleted the entire amount of quantum added from assessee's hands as above while deciding the quantum appeal. The Hon'ble Delhi High Court in the cases of CIT vs Standard Brands Ltd, 285 ITR 295 and Diwan Enterprises vs CIT, 246 ITR 571, has held that "where the assessee had claimed to have received loans in cash exceeding the prescribed limit of Rs. 20,000/- but Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (CIT Vs. Standard Brands ltd.) and 246 ITR 571 (Diwan Enterprises Vs. CIT) may not be applicable to the facts of the present case, as we are not concerned with the case falling under Section 68 of the Income Tax Act where initiation of proceedings under Section 269SS would become meaningless. Here is a case where the loan taken from friends and repayment of the same in cash. The reason that taking of loan is found to be genuine and the same is for business exigency, it is not a case of undisclosed income. If the assessee had not given a reasonable cause, then certainly the initiation of proceedings for violation of 269SS and 269T would be justified. We find in the present case the reasonable cause for not levying penalty exists and the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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