2015 (11) TMI 804 - HC - Income Tax

Penalty u/s 271D - whether there was ‘reasonable cause’ to accept the said loan in cash, or some bonafide reason due to which the assessee did not obtain the loan in accordance with section 269SS? - ITAT delted the penalty - Held that:- The assessee is a wholesale dealer of fast food goods, manufactured or marketed by various agencies and companies of national repute/Multi National Companies. For clearance of certain cheques, which stood issued in advance, as per market procedure, money had to be arranged to avoid prosecution under various statutes. It was also to save the reputation and goodwill. The cheques were deposited by the drawee as per his convenience. It stands established that after deposit of the amount, so borrowed in cash, the cheques issued in favour of the drawee stood cleared. Instead of availing the Cash Credit limit, for which the assessee was required to pay interest, he chose to borrow the amount from his near relation and deposit it in his account. There is nothing illegal or unusual about the same. Hence, findings of fact, cannot be said to be perverse or not borne out from the record. Statement made by the assessee cannot be said to be incorrect, for the authorities below, concurrently found the same to be plausible and correct - Decided in favour of assessee.