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2016 (9) TMI 336 - HC - Income TaxPenalty under Section 271-D - receipt of unsecured loan in cash - Held that:- There is a direct nexus of the money having flown from R.P. Goyal in the books of account of the assessee, may be towards payment of constructional activities of the assessee but it does not alter the character of deposit. The company after having received such amount was duty bound to repay back to the creditor which in the instant case may be a Director or otherwise and it is not the case of the assessee that the amount which was received from R.P. Goyal would remain with the company and was not repayable. The assessee company was duty bound to repay the said loan when demanded by R.P. Goyal or when company had sufficient liquidity. The Tribunal has also come to a finding that there is no agreement in between the two i.e. company as well as R.P. Goyal, and since there is no agreement, it is neither loan nor deposit, the said finding of the Tribunal in our view is wholly perverse. The conduct or the entry and flowing of funds is sufficient to prove that the amount was admittedly received by cash in the account of assessee as having been received from R.P. Goyal and found credited as an “unsecured loan”, proves that it was in the nature of a loan and certainly such loan having been received by cash, falls within the ambit of Section 269-SS. We are not impressed by the argument raised by the learned counsel for the assessee that R.P. Goyal being a semi literate and educated upto only 9th class, & earlier engaged in Kirana; entered in the field of Cement Trading and Distributorship, promoted this company and became Chairman-cum-Managing Director of the company, was not aware of the provisions of law, in our view such an argument is worth rejection primarily since the instant appeals arose in a case of Limited Company and not R.P. Goyal. Provisions were brought into force from 1.4.1984 and such provisions were in force for almost 8 years and we cannot loose sight of the fact that over the years R.P. Goyal being in the business for years together, was not aware of the provisions of law although the presumption to know the law is to the contrary. Equally important is the fact that a Limited Company right from being formed is assisted by Chartered Accountant and Company Secretary, who are well qualified professionals & the justification tendered that R.P. Goyal being less literate, deserves no indulgence and it goes without saying that ignorance of law is no excuse. This finding of fact that the assessee as well as R.P. Goyal had common bank account in the same bank, remained unrebutted by the assessee as well, and if there is any direct nexus proved by the assessee that the amount as received from the Director was utilised towards payment to various labourers/contractors spent for constructional activities that does not improve the case of the assessee at all in these proceedings. - Decided against assessee
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