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2017 (9) TMI 637 - AT - Income TaxPenalty u/s 271D - loans received from directors and their close relatives in cash - proof of taking cash loans in urgent and extreme situation and without proving mens rea - Held that:- From perusal of the record, it transpires that the assessee is a private limited company engaged in the business of builders. It is not in dispute that during the year under consideration, the assessee had taken loan of ₹ 5,76,000/- from five persons. All these persons are either director of the company or close relatives of the director of the company. They are filing their income tax return regularly and assessed to tax. It is very pertinent to note that the Assessing Officer has invoked the provisions of Section 269SS of the Act treating the amount as cash loans received from many persons. The loans were taken in cash in extreme and urgent situation. It was due to accounts were used to fund shortage of part payment to honour the cheques issued to Rajasthan Financial Corporation’s installments. Therefore, considering the various case laws on this issue, no penalty should be imposed on the assessee for contravention of Section 271D of the Act - Decided in favour of assessee.
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