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2016 (5) TMI 1030 - AT - Income TaxPenalty passed u/s.271D and 271E - borrowing the money in cash - Held that:- For the asst. year 2008-09, the assessee borrowed ₹ 20 lakhs and deposited by the assessee in bank account No.32 with UCO Bank. Thereafter the amount was transferred to M/s. ICICI Bank account. Similarly for the asst. year 2009-10, the assessee borrowed ₹ 20 lakhs and deposited with UCO Bank and M/s. ICICI Bank. For the asst year 2010-11 also, the assessee borrowed ₹ 20 lakhs in cash and deposited by him in UCO Bank and M/s. SBI. For the asst. year 2001-12, the assessee borrowed ₹ 20 lakhs and ₹ 50 lakhs and deposited in the account of SBI. Though the assessee is having bank account, he borrowed the money in cash and later deposited the same in the bank accounts. The ld. AR pleaded that due to urgency and compulsion, money was repeatedly borrowed in cash. The assessee has not explained the nature of urgency or compulsion. The provisions of sec.273B of the Act comes to the rescue of the assessee, if the assessee show reasonable cause for borrowing the money in cash. This is the case, where the assessee is having bank account, repeatedly borrowing the money in cash with gross violation of the Act. The plea of the ld. AR is that the creditors are genuine and confirmed by the parties and there was no revenue loss to the Department. Had it been, the creditors are not genuine, the AO would have invoked the provisions of sec.68 of the Act. The question of revenue loss is not a reason to consider the levy of penalty u/s.271D of the Act. The provisions of sec.269SS of the Act is constitutionally valid in view of the judgment of ADIT v. Kum A.B.Shanthi (2002 (5) TMI 4 - SUPREME Court ). Further, business exigencies shall be supported by evidence. The assessee has not brought on record any material to show that due to business commitment, the assessee has borrowed money in cash. There was no sufficient balance on the date of borrowing of cash and he has not placed any evidence to establish that there was bank balance on the date of borrowing. Thus we are inclined to reverse the order of the CIT(Appeals) in deleting the penalty and confirming the penalty levied u/s.271D of the Act for all these assessment years. - Decided against assessee
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