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TMI Blog2015 (8) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... leting the penalty imposed under section 271(E) of the Act. The effective ground raised by the Department are as under : "1. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) is not justified in deleting the penalty of Rs. 21,18,920 levied by the Additional Director of Income- tax (Exemptions), Hyderabad under section 271E of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case and when the assessee has not produced any new cash book during the course of penalty proceedings, the learned Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient funds. He further noticed, the assessee- society repaid the loan to the concerned persons in cash instead of account payee cheque/draft in violation of the provisions of section 269T of the Act thereby, attracting the penalty provisions of section 271E of the Act. As the Additional Director of Income-tax (Exemptions), Hyderabad was having jurisdiction to impose penalty under section 271E, the Assessing Officer referred the matter to the authority having jurisdiction for imposing penalty. The Additional Director of Income-tax (Exemptions) accordingly, issued notice directing the assessee to show cause as to why penalty shall not be imposed for violation of the provisions of section 269T of the Act. In response to the show-cause notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly shown as cash payments in the books of account due to clerical mistake, since the books of account of the assessee were audited by a chartered accountant. He further, observed that the copies of the ledger account of the individuals showing cheque payment of Rs. 8,75,000 on January 22, 2008 and Rs. 9,22,108 and Rs. 5,27,308 totalling to Rs. 22,75,000 furnished by the assessee during the penalty proceedings are not supported by the audited books of account. He therefore, disbelieved the assessee's claim that the repayment was made through account payee cheque. Accordingly, Additional Director of Income-tax (Exemptions) having held that the assessee has violated the provisions of section 269T of the Act proceeded to pass an order i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given to the primary documents. The learned Commissioner of Income- tax (Appeals) also disapproved the observations of the Additional Commissioner of Income-tax that repayments made through cheques relate to a separate loan and not the loan which is subject-matter of penalty proceeding. Accordingly, the learned Commissioner of Income-tax (Appeals) deleted the penalty imposed by the Assessing Officer. 5. We have considered the submissions of the parties and perused the orders of the Revenue authorities as well as other materials on record. On consideration of facts and materials placed on record, we do not find any dispute to the fact that the amount utilised for purchase of the concerned land were received from two individuals i.e., Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid fact is clearly established from the bank statement of State Bank of India as well as the confirmation issued by Axis Bank, Himayathnagar Branch, certifying that the said cheques amounting in total to Rs. 22,75,000 was credited to the respective bank accounts of Mr. S. S. Prasad and Smt. S. Vijay Kumari. Therefore, when there is no evidence before the Assessing Officer that the assessee has availed of two separate loans from these persons, on mere presumption and surmises, he cannot reject the explanation of the assessee which were supported by cogent evidence. Further, the assessee's contention that repayments through cheques were wrongly mentioned as cash payments as a result of clerical mistake is believable because, as f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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