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TMI Blog2017 (1) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... year under consideration, the assessee was found to have received cash loans of Rs. 90,000/-, Rs. 90,000/- and Rs. 1,00,000/- from Shri Dipak Chakraborty, Shri Mahadeb Das and Shri Janardan Pal respectively. Since the said loans were received by the assessee in contravention of the provisions of section 269SS of the Act, penalty proceedings under section 271D were initiated by the A.O. In reply to the show cause notice issued during the course of the said proceedings by the A.O., it was explained by the assessee that he was compelled to accept the cash loans of Rs. 2,80,000/- from the concerned three parties due to business exigencies. This explanation of the assessee was not found acceptable by the A.O. and he proceeded to impose a penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that he was in dire need of funds justifies his violation of the provisions of section 269SS. The appellant's explanation is very general in nature. He has not explained the business exigency which compelled him to accept the huge cash loans from the aforesaid three persons. The appellant has not cared to explain as to why loans could not be accepted by way of cheque when the clear provisions of section 269SS prohibit cash loans at a given point in time or aggregate of cash loans over a period of time where amounts or aggregate of such loans are Rs. 20,000/- or more. It is not as if the appellant or the lenders did not have access to banking facilities. Admittedly, the loans were accepted on various dates over a period of time. While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash. Relying on the decision of Hon'ble Allahabad High Court in case of CIT vs Smt. Dimpal Yadav and Akhilesh Kumar Yadav 379 ITR 177 and the decision of Hon'ble Madras High Court in the case of Director of Income Tax (Exemptions) vs Young Men Christian Association 227 Taxman 31, he contended that the case of the assessee is not a fit case to impose penalty under section 271D. 5. The learned DR, on the other hand, strongly relied on the impugned order of the Ld. CIT(A) in support of the revenue's case that the assessee having failed to establish any reasonable cause on evidence for accepting the loans in question in cash in contravention of section 269SS, he is liable for penalty under section 271D. He contended that the explanation offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited by the assessee in his bank account from time to time before issuing the cheques. As rightly contended by the learned DR, the relevant entries pointed out by the learned counsel for the assessee in this regard however are not sufficient to establish the business exigencies. Moreover, keeping in view the time gap between the relevant cash deposits and corresponding payments made by cheques, it appears that there was sufficient time available with the assessee to obtain the loans in question by cheques instead of cash. In our opinion, the assessee thus has failed to establish on evidence that the loans in question in cash were accepted by him in cash due to business exigencies and there were compelling circumstances to accept the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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