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2016 (4) TMI 378 - AT - Income TaxPenalty u/s 271D - whether there was a reasonable cause in accepting the deposits in contravention of provisions of section 269SS of the Act? - Held that:- The cash transactions of the assessee were with the directors and share holders of the company due to business expediency. Nobody has doubted the genuineness of the transactions. In my opinion, the assessee has proved throughout without any shadow of doubt that the transactions are genuine and there is a reasonable cause within the meaning of section 273B of the Act, which provides that no penalty shall be imposed on person or assessee as the case may be for any failure referred to in section 269SS of the Act, if he proves that there was reasonable cause for failure to take a 'loan' or 'deposit' otherwise than by account payee cheque or account payee bank draft, then the penalty should not be levied. Accordingly, do not see any reason to sustain the penalty levied u/s 271D of the Act. Consequently, the impugned penalty levied u/s 271D of the Act is cancelled. - Decided in favour of assessee
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