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2020 (3) TMI 787 - AT - Income TaxPenalty u/s 271E - violation of the provision of section 269T - assessee has repaid the loans and advances received from various creditors otherwise than by crossed cheque - sufficient and reasonable cause for repayment of the loan to the directors and shareholders - HELD THAT:- In the instant case, there is no dispute that the transactions are between mutually / closely associated with the persons i.e. company, directors and shareholders of the company. The amount was repaid otherwise than by crossed cheque. The transactions are genuine which were duly reflected in the books of accounts. The interest paid was also allowed by the AO in the assessment made u/s 143(3) of the Act. In the case relied upon by the Revenue, penalty was imposed u/s 271D of the Act. In the instant case, the assessee has demonstrated that transactions were genuine with relevant documents. It is a mere technical violation and there is no loss to the revenue. Hence, we are of the view that facts of the present case are distinguishable from the facts of the case relied upon by the revenue. Therefore, we hold that there is sufficient and reasonable cause for repayment of the loan to the directors and shareholders i.e. E.Rajeev, E.Padmapriya, E.Lakshmi and E.V.Sudhakar and hence we set aside the order of the Ld.CIT(A) and cancel the penalty levied by the Addl.CIT. Accordingly, appeal of the assessee on this ground is allowed. Repayment of deposit to A.V.V.Subrahmanyeswara Swamy and 62 persons - AO made the addition though the assessee stated that the deposits were repaid through account payee demand draft, since the assessee failed to produce the copies of demand drafts or counterfoils of the demand drafts - CIT(A) allowed relief to the extent of ₹ 20,000/- on each deposit, thus allowed ₹ 12,60,000/- and the balance penalty was confirmed - HELD THAT:- Addl.CIT has levied the penalty for non-producing the evidence for payment through demand drafts. In the instant case, the assessment was completed u/s 143(3) and the AO has completed the assessment after verification of the books of accounts and we find no adverse comment with regard to payment of loan through DDs. The assessee also furnished the demand draft number in the account copy. Therefore, we do not see any reason to disbelieve the submission of the assessee that the repayment was made through demand drafts as furnished in the account copies, hence, we hold that there is no case for levy of penalty u/s 271E with respect to the payments made to the depositors in the case of Sri A.V.V.Subrahmanyeswara Swamy & Others and accordingly, we set aside the order of the Ld.CIT(A) and delete the penalty. - Decided in favour of assessee.
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