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2014 (12) TMI 923 - AT - Income TaxConfirmation of penalty u/s 271D – Violation of section 269SS - Assessee obtained unsecured loan in cash - Since the entire loan was received in cash, AO was of the view that provisions of section 269SS have been violated thereby attracting penal provisions of section 271D - Held that:- Assessee has obtained cash loan and there cannot be any doubt with regard to the fact that assessee has violated the provisions of section 269SS of the Act, thereby attracting penal provisions contained u/s 271D – assessee contended that obtaining of cash loans is for a reasonable cause because on the dates when cash loans were availed, assessee was not having sufficient cash balance to discharge its liability on account of labour payment, which is urgent and immediate in nature – section 269SS clearly states that when any person obtains a loan above ₹ 20,000 from another person not by way of crossed-cheque or demand draft, then, there will be a violation of the provisions of section 269SS - when the provision does not make any distinction whether a transaction is genuine or not, it cannot be read into the statutory provision. Assessee’s claim that in absence of sufficient funds, assessee had availed cash loan of ₹ 5 lakh, is not acceptable - so far as the other loan of ₹ 5 lakh, it is to be noted that the closing cash balance as on 04/03/10 was ₹ 1,66,597, therefore, assessee’s explanation that availing of cash loan of ₹ 5 lakh for the purpose of meeting business exigency on account of payments to be made to labourers etc., is acceptable - there was sufficient cash balance on 03/12/09 to meet the business exigency, and there was no need to avail cash loan on 03/12/09 – assessee has failed to reasonably explain availing of cash loan to the extent of ₹ 5 lakh on 03/12/09 - penalty to the extent of ₹ 5 lakh for availing cash loan of ₹ 5 lakh on 03/12/09 has to be sustained – Decided partly in favour of assessee.
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