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2018 (10) TMI 1023 - ITAT VISAKHAPATNAMPenalty u/s 271D - assessee had received the loans in cash in contravention to the provisions of section 269SS - Held that:- In the instant case, the assessee had accepted the loans which were directly paid in the bank account on 28.02.2011 and the cheque issued to M/s Rallis India Ltd. was cleared on 04.03.2011 for an amount of ₹ 22,94,453/-. The AO/JCIT has not given any finding with regard to the availability of sufficient balances in the bank account to meet the cheques issued to Rallis India Ltd., during the intervening period from 28.02.2011 to 04.03.2011. The above observation establishes that the assessee had accepted the loans, otherwise than by account payee cheque to meet the dues payable to Rallis India Ltd. on 28.02.2011 due to business exigencies. Therefore, there is no reason to suspect the business exigency and pressing need of the assessee as explained by the assessee during the course of assessment proceedings. Therefore, we are of the considered opinion that the assessee had accepted the loan on 28.02.2011 due to business exigencies. The AO has neither doubted the genuineness of the transaction nor disputed the source of the creditors. Therefore, we hold that there is sufficient and reasonable case for accepting the loans of ₹ 10,00,000/- otherwise than by crossed cheque. Hence we hold that the assessee’s case is covered u/s 273B for not imposing penalty u/s 271D of the Act. Accordingly, the order of the lower authorities is set aside and the appeal of the assessee is allowed. Levy of penalty u/s 271E - assessee had made the payment for medical treatment of his father in cash - eligibility of exemption u/s 40A(3)r.w. Rule 6D - reasonable cause to make the payment - Held that:- The amounts were used for the purpose of meeting the medical emergency expenses. There is no reason to disbelieve the submission of the assessee when the person was hospitalized and undergoing the treatment. The contention of the AO that the amount should have been paid by way of cheque on the same day or by way of bank draft on the next day is farfetched and unacceptable. The medical emergency has to be attended keeping in view of the prevailing circumstances. The sources for meeting the medical expenses and post medical expenses have to considered on humane grounds and as per the requirements of the patients to save the lives. Therefore, we hold that there is sufficient and reasonable cause for repayment of the loan otherwise than by crossed cheque and the case is covered by exceptions provided u/s 273B of the Act for not levying penalty u/s 271E the act. - decided in favour of assessee
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