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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 ..... 66,878/- u/s. 115JB of the Income Tax Act [Act]. The scrutiny assessment u/s. 143(3) of the Act was completed on 25-03-2015 by making an addition of Rs. 56,180/- towards disallowance u/s. 40(a)(ia) of the Act. During the course of assessment proceedings, the Assessing Officer (AO) observed that assessee had received loans from various individual- Directors in cash in excess of the limits prescribed u/s. 269SS. However, to verify the same, AO issued notice u/s. 271D of the Act. In response to the notice, the AR of the assessee appeared and made explanation as to why cash payments were accepted. Rejecting the contentions, Addl.CIT completed the penalty proceedings u/s. 271D by levying penalty of Rs. 18,95,024/-. 3. During the course of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial status of the company was weak and the company was running in losses, the directors have brought in cash to tide over the temporary crisis created on account of shortage of funds. Details of money brought in by the directors have been filed and the directors have proved their sources of the monies brought in by them. The transactions appearing in books of accounts of the appellant could not be terms as deposits or loans as understood in common parlance. The position of the directors in a company is a fiduciary one even though the company is supposed to be in entity by itself by directors are the trustees. The words "any other person" in terms of Sec. 269SS does not denote the director of the company. It denotes a person o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws submitted by the appellant are not relevant to this case. In some of the case laws submitted are of Firm cases where cash was received from the partners and other case laws submitted are of company cases, where the directors had paid the amount towards share application money and the appellant has not submitted any case laws relevant to his present case. Therefore, the appellant failed to substantiate the grounds and hence I am in agreement with the Assessing Officer and the penalty levied confirmed. 5. Aggrieved by the order of Ld.CIT(A), assessee filed an appeal before the Hon'ble ITAT raising the following grounds: "1. The order of the Commissioner of Income-tax (Appeals)-4, Hyderabad CIT(A) in conf irming the levy of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 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 Rs. 80,024/- was paid to ICICI Bank for car instalments in small amounts, iii) an amount of Rs. 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. Assessee has relied on various case law not only before the CIT(A) but also before me. In the case of CIT Vs. Dimple Yadav in ITA No. 174 of 2015, the Hon'ble All ..... X X X X Extracts X X X X X X X X Extracts X X X X
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