TMI Blog2015 (6) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany to R.G.Shah, therefore, the AO was not justified in treating such credit of Director s remuneration in his account as loan transaction and thereby imposing penalty u/s.271D - No justification for imposition of penalty by assuming that amount crediting in the name of assessee s wife by debiting assessee s loan account, which was already there in the books of account amounts to any contravention of provisions of Section 269SS so as to impose penalty u/s.271D 271E. Debiting assessee s account was treated by the AO as repayment of loan and crediting his wife s account was treated by the AO as receipt of loan. Period of limitation - We found that penalty proceedings u/s.274 r.w.s.271D 271E, were initiated on 2-8-2007. As per Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,25,000 31.03.2005 Total 15,25,000 In view of the above observation, the AO issued a notice u/s.274 to the assessee company. Thereafter the AO imposed penalty u/s.271D equal to the amount of loan taken. Similar penalty was levied u/s.271E. 3. By the impugned order, the CIT(A) confirmed the action of the AO for levy of penalty. 4. We have considered rival contentions and found that the assessee has received instructions from one of the Directors Mr. Rahul G. Shah to credit the account of his wife Smt. Lata G. Shah by Rs.12,00,000/- debiting his account with the same amount. Accordingly, the assessee has pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is wife. Such credit either in the account of Rahul G. Shah was never doubted insofar as there was already credit existing in the books of account of assessee, or crediting this amount in the name of his wife by debiting account of Rahul G. Shah was doubted as non-genuine. The amount of Director s remuneration credited to the account of Mr. Rahul G. Shah does not amount to any loan by assessee company to R.G.Shah, therefore, the AO was not justified in treating such credit of Director s remuneration in his account as loan transaction and thereby imposing penalty u/s.271D of the Act. Accordingly, we do not find any justification for imposition of penalty by assuming that amount crediting in the name of assessee s wife by debiting assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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