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2018 (5) TMI 1635 - AT - Income TaxPenalty u/s 271D and 271E - assessee has obtained loan/deposits in cash and violated provisions of section 269SS - three directors who have advanced money to the assessee-company and have been repaid in cash. - Held that:- Transactions of availing loans and its user by the assessee have not been doubted. These are found to be genuine. Only allegation against the assessee is of venial and technical breach. No doubt breach is there, but the assessee has a plausible explanation. It has been in the business since 1980 in exporting dyes and intermediatries. Thus, in order to re-establish itself, it has availed certain cash loans which has been used for fulfillment of promises given for the purpose of BIFR. An identical situation has been evaluated by ITAT’s Third Member decision in the case of Mrs.Rupali R. Desai (2003 (7) TMI 647 - ITAT MUMBAI). As far as repayment of cash loans is concerned, identical circumstances are available with the assessee, therefore, we are of the view that the assessee has been able to demonstrate reasonable cause for not visiting the assessee with penalty under section 271D and 271E. We allow both the appeals of the assessee and delete penalty. - Decided in favour of assessee.
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