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2018 (10) TMI 52 - AT - Income TaxLevy of penalty u/s 271E r.w.s. 269T - reasonable cause - proper year for levy of said penalty qua the year of book entries - reasonable cause for such book entries and subsequent allotment of 9% Redeemable Preference Shares - method of repayment of loans - Held that:- The entries in the books of the assessee and the VSK are not in sync in this regard. Therefore, we find the reason given by the CIT(A) has merits. Therefore, we dismiss relevant arguments of Ld. Counsel for the assessee. Squiring up of loans by way of book entries constitutes violation The reason of lack of funds caused by the act of utilisation of it for the business purposes of the assessee, shall constitute reasonable cause in this case. Raising the funds by sale of lands or borrowing from other parties to repay to VSK is an unnecessary exercise when the funds so paid to VSK is destined to return to the assessee’s bank account. On this reasoning, the assessee’s decision in favour of squiring up of the loans account through passing of journal entries, shall constitute a reasonable cause on the facts of the present case. The same reasoning has the strength of the binding jurisdictional High Court judgment in the case of CIT Vs. Triumph International Finance (I) Ltd. [2012 (6) TMI 358 - BOMBAY HIGH COURT]. In this case, the amount was to come back to that assessee towards the sale price of the shares. Therefore, on the ground of reasonable case, as envisaged in the provisions of section 273B of the Act, we are of the opinion that the levy of penalty is not sustainable. - Decided in favour of assessee.
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