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2020 (1) TMI 1048 - AT - Income TaxPenalty u/s 271D - Cash loan taken from the Partner of the Partnership Firm - Violation of provisions of section 269SS - HELD THAT:- Loan transaction between the firm and partner does come within the purview of section 269SS of the Act, as they cannot be treated as different entities. Secondly, it is submitted that due to business exigencies arising out of immediate payment to be made to a creditor, the assessee was compelled to avail the cash loan from one of the partners. Availing of cash loan from one of the partners was for making payment to creditors. The ledger account copies of two creditors placed in the paper book support assessee's claim. Judicial precedents cited before us have also laid down the ratio that cash loan received from partner would not attract the provisions of section 269SS and section 271D of the Act since a "Firm" and "Partner" are not to be considered as different entities. Assessee with a bona fide belief that the provisions of section 269SS are not applicable has availed the cash loan from the partner. Further, Section 273B which also covers section 271D makes it clear that if the failure to comply to the relevant provision is due to reasonable cause, no penalty should be imposed. We are of the considered opinion that the assessee has made out a case of reasonable cause for availing cash loan from the partner, therefore, the assessee would be protected by the provisions of section 273B of the Act. Thus, we do not find any justifiable reason to sustain the imposition of penalty under section 271D - Penalty imposed is hereby deleted - Decided in favour of assessee.
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