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2014 (7) TMI 522 - AT - Income TaxAcceptance of loan in Cash - violation of section 269SS - Penalty u/s 271D of the Act – Purpose of loan – Business or not - The claim of the assessee is that he has accepted loans from various persons by way of cash and returned the same to the persons from whom the loans were availed - Held that:- On verification of the bank accounts of the assessee with South Indian Bank and Dhanalashmi Bank, the AO found that those persons have given loans to the assessee for clearing the account payee cheques issued by the assessee through their bank account - there existed no reasonable cause for accepting loans/deposits or aggregate of such loans/deposits of ₹ 20,000 or more from various persons otherwise than crossed cheques and drafts and as such committed contravention of the provisions of s. 269SS, therefore, the penalty under s. 271D is attracted in this case and has rightly been imposed by the AO and CIT(A) was not factually or legally correct in directing to delete the same – thus, the order of the AO is restored – Decided in favour of Revenue.
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