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2011 (3) TMI 1347 - ITAT, HYDERABADPenalty - Provision of section 269SS - Cash loans - The DR, submitted that the assessee held huge cash in hand at Rs. 8,08,760 and borrowing of the cash loans without any hesitation exceeding Rs. 20,000 is gross violation of section 269SS of the Act - held that:- The words in Explanation (iii) below section 269SS except saying that "loan" or "deposit" means loan or deposit of money. The terms 'loan' or 'deposit' are not mutually exclusive. There are number of common features between the two. A loan is repayable the moment it is incurred, while it is not so with deposit. In a deposit, unlike a loan, there is no immediate obligation to repay. Normally a deposit is for a fixed tenure. The amount taken by the assessee in the present case is for a short period. It has to be considered as temporary advance and one has to see whether there was any stipulation as to the period or any stipulation for payment of interest. If it is a temporary advance, such temporary advances are outside the purview of section 269SS of the Act. To sum up, the Assessing Officer has to see whether the cash loan was borrowed by the assessee on account of shortage of cash balance in a particular place where the cash loan was taken. Further he has to see whether cash loan was taken for a short period without any stipulation regarding repayment period or interest. Even otherwise penalty under section 271D cannot be levied in any case if there is a reasonable cause for accepting the cash loans. Therefore, if there is only technical lapse for which no penalty could be levied. With these observations, we set aside the issue to the file of the Assessing Officer for fresh consideration.
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