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2012 (7) TMI 940 - HC - Income TaxLevy of penalty under Section 271D - Held that:- There is hardly any material available on record to show any justification for receipt of cash over and above ₹ 20,000/- during the course of the year. The assessee admits that they are in the line of business of construction where day in and day out cash payments are made to labourers and to suppliers. Even herein, the justification for making payment in cash must necessarily satisfy Rule 6 DD of the Income Tax Rules, as it existed then. The assessee had not shown any acceptable or unavoidable circumstances or impracticability or difficulty in receiving money otherwise than in cash. Even accepting the reasoning of the assessee that the reasonable cause that the assessee may show could be appreciated on the lines shown in Rule 6 DD, we fail to find any reasonable cause shown in the letter, which was in a very general form. Except for mere statement that the work undertaken by the assessee at outside the State was for the first time and there was necessity for meeting the requirements to labour and other suppliers demanding cash, we do not find any details placed before the Authorities concerned to accept the case of the assessee that there was a reasonable cause shown in receiving an amount of ₹ 6,51,000/- in cash from Mr. M.T. Nair. Thus the Assessing Authority rightly pointed out that the explanation was not convincing, hence, the case of the assessee was rejected. As the Commissioner of Income Tax (Appeals) as well as the Tribunal confirming such a finding, we do not think that there are grounds in the appeal which persuade us to take a different view. In the circumstances, we have no hesitation in rejecting the tax case. It is stated in the letter that the assessee received ₹ 6,51,000/- from Mr. M.T. Nair during the year and a sum of ₹ 91,389/- was repaid to him. There was an opening balance of ₹ 45,475/- due to him in his account. Thus the conduct of the assessee treating the transaction as loan transaction and so too the letter dated 24.9.1997 belies the claim of the assessee made through the affidavit of Mr. M.T. Nair that the transaction be treated as a gift, we agree with the Tribunal that the changed stand is only an after thought and does not merit any consideration including the remand.
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