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2017 (11) TMI 1358 - HC - Income TaxDisallowing the adjustment in the amount of penalty imposed u/s 271D - Held that:- Section 271-D of the Act are in the nature of compliance provisions that seek to impose penalty for non-compliance of the statutory scheme contained in Section 269 SS being that no loan in excess of ₹ 20,000/- be taken from any person, through cash mode. A plain reading of Section 269SS indicates that the bar has been created against taking loans in cash, in excess of ₹ 20,000/-. In fact the legislature clearly appears to contemplate that loan in excess of ₹ 20,000/- should be taken only through banking channel and not through cash mode. There is no room for allowing the benefit of the loan taken up to ₹ 20,000/ on the reasoning adopted by the CIT (Appeals). The bar operates in three contingencies. First, if the total loan amount, by way of a single transaction exceeds ₹ 20,000/-. Second, it operates where unpaid amount of an earlier loan exceeds ₹ 20,000/-. Third, it operates where the aggregate amount of first and second contingencies taken together exceeds ₹ 20,000/-. At any rate, it is not the case of the assessee that the loan had been taken by it in parts such that one part of the cash loan was for ₹ 20,000/- and the other in excess thereof. In fact the aggregate amount of loan taken by the assessee from Vikas Motor Finance Company was ₹ 1,00,000/- and that from Singh Traders was in excess of ₹ 70,000/-. Thus, the bar created by Section 269SS of the Act is clearly attracted. Reliance has been placed by learned counsel for the assessee on the judgment in the case of Commissioner of Income Tax Vs. Ajanta Dyeing and Printing Mills reported in (2003 (1) TMI 31 - RAJASTHAN High Court) as made an interpretation in favour of the assessee and granted adjustment of Rs, 20,000/-. However, with due respect, we disagree with the view taken by the Rajasthan High Court inasmuch as the language of the Act is clear and unambiguous. It does not contemplate granting of any such adjustment or benefit to the assessee to the extent of ₹ 20,000/- in respect of loan taken in cash is exceeds of ₹ 20,000/-. In fact the language only suggests, in case the aggregate amount of loan exceeds ₹ 20,000/- or where loan may have been taken in parts, or where fresh loan and outstanding loan taken together exceed ₹ 20,000/-, no penalty would be leviable, to any extent, if the loan in excess of ₹ 20,000/- is taken through banking channel. However, otherwise, penalty is mandatory and no adjustment in penalty is contemplated. - Decided against the assessee
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