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2014 (1) TMI 1683 - AT - Income TaxPenalty under s. 271D - whether the assessee has contravened the provisions of s. 269SS - whether the money has been received in current account - Held that:- If transaction was bona fide and default was of technical nature, then the penalty should not be justified. In the case before us. there is no default because the share application money or deposit in the current account cannot be included in the definition of deposit but in any case even if it is assumed otherwise then the defect is only of technical nature and there was a bona fide belief on the part of the assessee that this is not in contravention of provisions of the Act, therefore, it is of technical nature and does not call for levy of penalty. In any case, a reasonable cause was also explained that assessee company was constructing a hotel for which bank loans were not sanctioned and, therefore, directors had to contribute the money towards construction of the hotel. The payment was generally required for labour payments and other cash items, therefore, it is a reasonable cause for accepting the cash from directors and relatives and even on this basis also penalty is not leviable. We set aside the order of learned CIT(A) and delete the penalties levied under s. 271D in all the years - Decided in favour of assessee.
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