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2018 (11) TMI 1418 - AT - Income TaxLevy of penalty u/s.271D - assessee has not been able to substantiate its claim for receiving amounts in cash - Held that:- When the language of the provision is crystal clear, the object of the purpose of the enactment of the said provision would no more have any say in the matter. A plain reading of Sec.271D establishes that it is a mandatory provision and a person contravening the provisions of Sec.269SS in any manner cannot escape from the payment of the penalty of equivalent amount so received as loan or deposit by him, unless exceptional and reasonable cause is proved. It is a well settled principle of interpretation that the taxing statutes have to be construed strictly and that when the language is clear and unambiguous it has to be construed in the literal sense bereft of any equitable or social reasons or any hardship likely to be suffered. Thus, as the assessee has not been able to substantiate its claim for receiving amounts in cash from Dr.A.M.Arun in violation of provisions of Sec.269SS, the penalty levied u/s.271D as levied by the Addl. Commissioner and as confirmed by the CIT(A) stands confirmed. The decision in the case of M/s.Idhayam Publications Ltd. [2006 (1) TMI 97 - MADRAS HIGH COURT] has no application on the facts of the present case and the principles laid down by the Hon’ble Jurisdictional High Court in the case of Shri P.Muthukaruppan [2015 (7) TMI 848 - MADRAS HIGH COURT] and Nandhi Dhall Mills [2015 (3) TMI 19 - MADRAS HIGH COURT] have been rightly applied by the Addl. Commissioner and the Ld.CIT(A). Levy of penalty u/s 271E - Held that:- The assesses herein has been used as the custodian of the unaccounted cash of J. Dinakaran by depositing it in the bank accounts of the assesses herein by their shareholder and director Dr.A. M. Arun. The assessee have not been able to give any explanation to substantiate with evidence for the repayment of the deposits to Dr.A.M.Arun in cash. As and when J. Dinakaran required the cash the cash seems to have been withdrawn by Dr. A. M. Arun from the bank accounts of the assesses herein and paid to J. Dinakaran. The question that has been raised that the moneys given by the shareholder and Director to the Private Ltd. Company is not a loan or deposit because no interest has been charged, would not hold well in so far as the balance sheet of the assessee clearly shows that Dr.A.M.Arun is an unsecured creditor. The assessee is also not able to give a term to the moneys deposited and withdrawn in the bank account of the assessee companies by Dr.A.M.Arun other than the term “deposit”. A deposit need not be interest bearing. So also a loan. A deposit is putting money into the account of the assessee and that is exactly what has been done by Dr.A.M.Arun in the case of the assesses herein and that deposit has been returned/withdrawn by Dr.A.M.Arun. Penalty u/s.271E as levied by the Addl. Commissioner and as confirmed by the Ld.CIT(A) is on a right foot and does not call for any interference. - Decided against assessee.
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