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2012 (9) TMI 525 - HC - Income TaxPenalty u/s 271D - whether transactions effected through journal entries would amount to acceptance of any loan or deposit otherwise than by account payee cheque or account payee bank draft within the meaning of Section 269SS to attract levy of penalty under Section 271D of the Income Tax Act, 1961 - Held that:- Receiving loans / deposits through journal entries would be in violation of Section 269SS but the transactions in question were undertaken not with a view to receive loans / deposits in contravention of Section 269SS but with a view to extinguish the mutual liability of paying / receiving the amounts by the assessee and its sister concern to the customers. In the absence of any material on record to suggest that the transactions in question were not reasonable or bonafide no reason to interfere with the order of the Tribunal in deleting the penalty of ₹ 22.99 crores. Deletion of penalty of ₹ 2.10 crores a specific finding of fact recorded by the Tribunal is that the loan was received by the assessee by way of a cheque. The above finding is based on the documents produced before the Tribunal. Nothing is brought on record even in this appeal to suggest that the loan was received otherwise than account payee cheque. Accordingly, deletion of the penalty of ₹ 2.10 crores cannot be faulted - appeal decided in favour of assessee.
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