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TMI Blog2017 (5) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ons given by the court to pay the amount in Bengaluru. Assessee in fact has purchased a DD in Andhra Bank Bengaluru and paid to the creditor as per the directions of the court, ii) an amount of ₹ 80,024/- was paid to ICICI Bank for car instalments in small amounts, iii) an amount of ₹ 6,90,000/- was spent for day to day running expenses of the office as the company is having financial difficulties. Further substantial amount was deposit in Bank Account directly. Explanation given was accepted in assessment proceedings, so the same can be considered as reasonable for accepting cash for the purpose of section 271D read with section 273B. Thus it is of the view that the assessee has shown reasonable cause within the meaning of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: Out of the total amount of ₹ 18,95,024/- brought in by the directors an amount of ₹ 11,25,000/- directly paid to a creditor based on the court orders of the XIV Addl.GMM at Mayo Hall, Bangalore in CC No.26367/2011. The aforesaid amount of ₹ 11,25,000/- was directed deposited into the bank account of the company with Andhra Bank, Bangalore and a demand draf t was taken and paid to the creditor as per the directions' of the court. Thus it cannot be said the transaction is in the nature of a cash transaction contravening the provisions of section 269SS of the I.T.Act, 1961. Similarly an amount of ₹ 80,024/- was directly paid to ICICI bank towards care installments by the director. The balance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons who are not very intimately or closely connected to the appellant company. The financial position of the company was weak and the monies were brought in emergency situations to meet expenditure in the nature of salaries and other office expenses like paying for electricity bill, provident fund, telephones, conveyance etc. During the assessment proceedings, the AO had occasion to examine the books of accounts and examine all the amounts brought in by the directors. Their genuineness and sources were already proved. The genuineness and sources and to meet the exigencies of the business were proved to the satisf action of the AO. It is further submitted that the bonafide submissions coupled with the genuineness of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the levy of penalty imposed U/s.271-D at ₹ 18,95,024 is wholly unsustainable both on facts and in law. 2. The learned CIT (A) failed to note that the appellant was prevented by reasonable and sufficient cause in accepting the amounts in Cash as there were impending business exigencies. 3. The learned CIT (A) having found as a matter of fact that all the loans taken in cash were accepted by the Assessing Officer on grounds of identity, genuineness and credit worthiness ought to have cancelled the penalty levied at ₹ 18,95,024/- U/s.271-D of the I.T. Act, 1961 as there was no intention to avoid or evade any tax liability. 4. The learned CIT (A) failed to note that all the loans taken were utilized for busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dimple Yadav in ITA No. 174 of 2015, the Hon ble Allahabad High Court has accepted the explanation given by the assessee and deleted the penalty. Likewise, the coordinate bench of Hyderabad in the case of Citizen Cooperative Society Ltd. Vs. Addl. CIT in ITA No. 1156/Hyd/2009 has also accepted that imposition of penalty is not mandatory and if the person concerned proves that there is reasonable cause as per the provisions of section 273B there can be no penalty u/s 271D. Further, in the case of MS Lokaiah Vs. Addl. CIT, Hyd. In ITA No. 1272/Hyd/2015, dated 03/08/2016 the reasonable cause has accepted. In the light of the above, I am of the view that the assessee has shown reasonable cause within the meaning of section 273B, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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