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TMI Blog2017 (10) TMI 1211X X X X Extracts X X X X X X X X Extracts X X X X ..... is personal account with Canara Bank and deposited the money in assessee’s account to complete with the day to day commitments as it is for the business expediency and also reasonable cause for the assessee to accept money in cash. We find that when the cheque issued by the assessee-company is dishonoured on the ground of exceeding the overdraft limits, it is a minimum necessity to carry out the activity of the assessee and therefore Sri Chennupati Jaganmohan Rao, who is one of the Directors of the company withdrew the cash from his personal account and deposited the same in the company’s account. Therefore, under those facts and circumstances of the case, loan taken from Sri Chennupati Jaganmohan Rao for the purpose of honour the commitmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted before the Additional Commissioner that assessee-company has accepted a loan of ₹ 12 lakhs from Sri Chennupati Jaganmohan Rao, who is one of the Directors of the assessee-company under inevitable circumstances due to exceeding of overdraft limit with State Bank of India (SBI). However, the Additional Commissioner has not agreed with the explanation given by the assessee and levied penalty under section 271D of the Act by observing that Sri Chennupati Jaganmohan Rao is the Director of the assessee-company. The day to day affairs of the company are managed by none other than Sri Chennupati Jaganmohan Rao. As such, Sri Chennupati Jaganmohan Rao is well aware of the financial strength and affairs of the company. The plea of excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount with Canara Bank, Governorpet, Vijayawada. Copy of the Canara Bank account of the director is enclosed herewith. Out of the sum received a sum of ₹ 11,50,000/- was deposited into the appellant's bank account on the same day, after keeping ₹ 50,000/- in cash for other purposes. From the above it is clear that appellant tried to honour the Law by receiving the account payee cheque and deposited the same into the bank. On coming to know its dishonor due to technical reason to meet the immediate requirements it borrowed the amount in cash to mitigate the business exigencies. The amount borrowed was a genuine transaction being withdrawal of amount from the director's bank account on 23.11.2011 itself and used for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried the matter in appeal before the Tribunal. 6. Learned Departmental Representative supported the order passed by the Assessing Officer, whereas Authorized Representative for the assessee relied on the order of the ld. CIT(A). 7. The assessee is a private limited company having account with SBI with overdraft facility. The cheque issued by the assessee-company was not honoured by the SBI due to exceeding limit of overdraft facility provided by the bank. One of the Directors Sri Chennupati Jaganmohan Rao has withdrawn the cash from his personal account with Canara bank and the same is deposited in SBI account to honour the business commitments of the assessee-company. These facts are not disputed by the Department. The only objection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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