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2019 (6) TMI 669 - AT - Income TaxLevy of penalty u/s 271D - violation of the provisions of section 269SS - acceptance of cash loans - non application of mind by JCIT - HELD THAT:- JCIT has not applied his mind while imposing the penalty and did not come to a conclusion whether the explanation offered by the assessee was acceptable or not. On such wrong impressions and surmises the penalty is not leviable. The ld.CIT(A) cannot improve the satisfaction reached by the JCIT for levying penalty applying his mind. In the instant case, JCIT has levied the penalty on incorrect assumption and without application of mind hence, the same is unsustainable. assessee had taken the cash loans for purchase of car from the close relatives i.e. sons-in-law of the Managing Partner through their spouses who are partners and all of them are assessed to income tax and submitted the confirmations. It was stated by the assessee that the amounts were received as capital contribution and due to inadvertent mistake of the accountant the same was recorded as loans. This aspect neither examined by the JCIT nor the Ld.CIT(A) by making cross verification. No penalty is leviable without application of mind by the levying authority. JCIT has not considered the explanation of the assessee before levy of penalty and levied the penalty under mistaken impression and presumptions. Therefore, we hold that the JCIT has not made out case for levy of penalty under section 271D - Decided in favour of assessee.
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