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2013 (1) TMI 210 - ITAT DELHIPenalty u/s 271E - contravention of the provisions of mode of repayment of certain loans or deposits (Section 269T) - Held that:- The director of assessee company Mr. Varun Sarup Agarwal issued a cheque on 1.2.2007 on behalf of the assessee company for payment of rent and assessee company opened its account after issuance of this cheque. The amount of Rs. 2 lakh was deposited in the bank account of Mr. Varun Sarup Agarwal with a bona fide intention to prevent dishonoring of the cheque issued to the landlord of the assessee company and the remaining amount was returned back to the assessee company’s bank account. In the facts and circumstances of the case, it is doubtful whether the amount received by director with an intention to deposit it to the bank account with a bona fide belief that this would save the prestige of the company can be characterized as a loan or a deposit within the meaning of Section 269T The assessee company was perhaps justified in believing that it is entitled to rely on the position which was in its favour. Thus, it may be stated that the assessee company gave Rs. 2 lakh to its director with a bona fide belief that an urgency to ensure honoring of the cheque issued to the landlord constitutes a reasonable cause u/s 273B where no penalty shall be imposable on the assessee for any failure referred to in the said provisions inter alia Section 269T. Evaluating the impugned transaction as depicted in CIT Versus Idhayam Publications Limited [2006 (1) TMI 97 - MADRAS HIGH COURT] in the present case the ledger account of Shri Varun Sarup Agarwal with the assessee company reveals that there was a current account between the assessee company and its director and no interest was being charged for the transactions and the same could not be termed either as a loan or a deposit with the assessee company. Accordingly, the penalty levied was not based on justified and reasonable grounds - in favour of assessee.
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