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TMI Blog2018 (9) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... ny is engaged in the business of development of real estate. During the assessment proceedings for the impugned assessment year, the Assessing Officer noticing that in the relevant previous year the assessee has received in cash Rs. 1,00,000 towards share capital and Rs. 3,60,500 towards loan observed that the assessee has violated the provisions of section 269SS of the Income Tax Act, 1961 (for short "the Act"). Accordingly, he recommended initiation of penalty proceedings under section 271D of the Act. In response to the show cause notice, though, the assessee submitted that the default in accepting the cash loan in violation of section 269SS of the Act is for a reasonable cause, however, the Assessing Officer rejecting the explanation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bank account placed at Page-18 of the paper book. He also drew our attention to the copy of the sale deed. Thus, it was submitted that the default committed by the assessee by availing the cash loan was due to reasonable cause, hence, no penalty should be imposed. 5. The learned Departmental Representative strongly relying upon the observations of the learned Commissioner (Appeals) submitted that the assessee having violated the provisions of section 269SS of the Act, imposition of penalty is justified. 6. We have considered rival submissions and perused materials on record. There is no dispute to the fact that the assessee has availed cash loan of Rs. 3,60,340, from two of its directors. Hence, there is violation of the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed that the cash loan of Rs. 3,50,000 was deposited in bank account on 5th October 2010 and on the very same day, the said amount was transferred from the bank account to the Sub-registrar and some other Government Agency towards payment of stamp duty. This fact is also corroborated from the endorsement made in the sale deed executed by the assessee, a copy of which is at Page-19 of the paper book. Thus, prima-facie, it appears that for payment of stamp duty the assessee was compelled to avail the cash loan from the directors looking at the urgency of the matter. Thus, in our considered opinion, there is a reasonable cause for the default or failure on the part of the assessee to comply to the provisions of section 269SS of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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