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TMI Blog2015 (7) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that this is not a fit case for levy of penalty under section 271D of the I.T. Act. We accordingly set-aside the order of CIT(A) and direct the Assessing Officer to cancel the penalty. - Decided in favour of assessee. - ITA No.1905/PN/2013 - - - Dated:- 24-6-2015 - Shri R.K. Panda and Shri Vikas Awasthy, JJ. For the Petitioner : Written Submission For the Respondent : Shri A.K. Modi ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 14.08.2013 of the CIT(A), Aurangabad relating to Assessment Year 2006-07. 2. Levy of penalty of ₹ 1,00,000/- under section 271D of the I.T. Act by the Assessing Officer and confirmed by the CIT(A) is the only issue raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has given the same to Shri K.N. Mutha for obtaining loan. However, no such cash loan was given by Shri K.N. Mutha. 5. The Addl. CIT was not satisfied with the explanation given by the assessee. He observed that Shri K.N. Mutha has accepted the above modus operendy and admitted that his business is of giving loans in cash and accepting the repayment in cash. He has accepted that the entire money so given, against the cheques deposited with him, was unexplained income. According to the Addl. CIT, if the assessee accepts loans/deposits in cash and repays the same in cash it would be impossible to accept that the entry of the same would be made in the books of accounts of the assessee. The cheques would be returned when the hundies were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he observed that the submission of the assessee that he has given duly signed cheque of ₹ 1,00,000/- to Shri K.N. Mutha without obtaining cash loan of ₹ 1,00,000/- appears to be improbable and therefore cannot be accepted. Further, when the loan was not sanctioned by Shri K.N. Mutha, there was no question of not returning the cheque despite the requests of the assessee. Therefore, he held that the Assessing Officer was justified in holding that the assessee has accepted cash loan of ₹ 1,00,000/- from Shri K.N. Mutha. Since assessee has violated the provisions of section 269SS therefore penalty levied under section 271D of the I.T. Act is justified. 7. Aggrieved with such order of the CIT(A), the assessee is in appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.2183/PN/2013, order dated 19.09.2014 deleted the penalty levied under section 271D of the I.T. Act, which was upheld by the CIT(A). 9. The Ld. Departmental Representative on the other hand while supporting the order of the CIT(A) submitted that the cheque is not barred by limitation. 10. We have considered the written submission made by the assessee and argument of the Ld. Departmental Representative. We have also perused the orders of the Assessing Officer and the CIT(A). We find in the instant case the Addl. CIT levied the penalty of ₹ 1,00,000/- under section 271D of the I.T. Act on the ground that the assessee has accepted cash loan of ₹ 1,00,000/- from Shri K.N. Mutha in violation of the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by both the sides. We find the AO referred the matter to the Addl.CIT for initiation of penalty proceedings u/s.271D and 271E of the I.T. Act since a number of signed dated/undated cheques were impounded from the premises of one Shri Kachrulal Nathmal Mutha according to which the assessee appears to have taken a cash loan of ₹ 6 lakhs from Shri Kachrulal Nathmal Mutha during the A.Y. 2006-07. We find before the CIT(A) the assessee submitted that he has only approached Shri Kachrulal Nathmal Mutha with the proposal of loan for which he had handed over the cheques and hundies of ₹ 6 lakhs as security. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) and direct the AO to cancel the penalty levied u/s.271D of the I.T. Act, 1961. Since the assessee succeeds on merit, we refrain ourselves from deciding the legal arguments advanced by the Ld. Counsel for the assessee to the proposition that the penalty order is barred by limitation. The grounds raised by the assessee are accordingly allowed. 12. Since in the instant case the assessee was categorically denying from the very beginning regarding acceptance of such cash loan from Shri K.N. Mutha and since there is no direct evidence to substantiate that the assessee has in-fact accepted the said cash loan and since no statement was recorded from either of the parties, therefore, following the decision of the Co-ordinate Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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