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2014 (10) TMI 1058 - ITAT COCHINLevy of penalty u/s. 271D - Cash Loans taken - whether the assessee has accepted cash loans from various parties in contravention of the provisions of sec. 269SS so as to invite the rigour of the penal provision of S.271D ? - HELD THAT:- From the records available before us, we are not able to decide the issue as to whether the assessee has taken cash loan as stated by the department, or there are only journal entries as claimed by the assessee, since material to that effect have not been furnished before us. We therefore, deem it just and proper to remit the matter to the file of the Assessing Officer, to verify the fact as to whether the assessee has actually received cash loan from five parties or there were mere journal entries to that effect. If ultimately, it is found that no cash loan was actually received by the assessee in the course of the transactions from five parties to the tune of Rs. 10,85,010/- and there were only journal entries to that effect, then no penalty can be levied under Sec.271D - AO shall accordingly redecide the issue of applicability of the penal provisions of Sec.271D to the facts of the present case, in accordance with law, keeping in view our aforesaid direction, and after giving reasonable opportunity of hearing to the assessee. Levy of Penalty on payments other than account payee cheques - CIT(A) has given categorical finding after examining the bank certificates furnished before the Assessing officer, that transactions of M/s. Madura Capital Market Services Pvt. Ltd. and Mr. Vishal M. Kapadia were not be account payee cheques. Also for M/s. Padinjarathala Securities Ltd. only part of the transaction was by account payee cheque. Being so, the CIT(A) justified the levy of penalty of 20% of the amount of and confirmed the levy of penalty . Regarding the deposits relating to transactions amounting to Rs. 25.50 crores - Admittedly, the CIT(A) has not called for remand report from the Assessing officer in order to verify the correctness of the bank certificate. The CIT(A) should have called for remand report from the Assessing officer so as to physically examine the copies of Cheque Nos. 191212, 191106, 191121 and 191181. Without examining the copy of cheques physically, she deleted the penalty which is not proper. In our opinion, it is just and proper to remit the entire issue to the file of the Assessing officer to conduct necessary enquiry and the assessee has to produce necessary evidence in support of its claim and if the assessee fails to produce the necessary evidence, the Assessing officer is at liberty to take adverse inference and decide accordingly. Levy of penalty u/s. 271E - Amounts paid as commission by way of book entries and repayment of loan by book entries - HELD THAT:- It is just and proper to remit the entire issue to the file of the Assessing officer to conduct necessary enquiry and the assessee has to produce necessary evidence in support of its claim and if the assessee fails to produce the necessary evidence, the Assessing officer is at liberty to take adverse inference and decide accordingly.
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