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2021 (8) TMI 643 - AT - Income TaxPenalty u/s. 271D - violation of provisions of Section 269SS - assessee had accepted cash unsecured loans - assessee had raised unsecured loans from her husband and from her son and a small part of the loan was also raised from a friend - appellant could not prove that loans given were duly reflected in the books of account - HELD THAT:- Lenders to the assessee are individuals and they may not be maintaining books of accounts - they have filed confirmations of having advanced the moneys to the assessee and in the confirmations they have also confirmed that such loans were received back during the year itself. The assessee has reflected the receipt of such loans and repayment thereto in receipt and payment account a copy of receipt and payment account, therefore the first reason for rejecting the appeal of the assessee is not a valid reason. Assessee had not deposited such cash in the bank account - Case the assessee had deposited such cash in the bank account and through that bank account the payment was made whereas in the present case the assessee did not deposit the same in the bank account - in the present case, the purchase of property was done in cash which is apparent from the copy of purchase deed and whereas in that case the assessee had made payments through banking channels therefore this reason is also not sustainable as there is no point in first depositing the cash in the Bank account and then withdrawing it for making cash payment for purchase of property. Assessee could not establish reasonable cause for violating the provisions of Section 269SS of the Act - Assessee had borrowed funds in cash for conversion of leasehold right in to freehold rights and in the present case also the assessee had borrowed funds for purchase of an immovable property. Therefore, the third reason is also not sustainable. - Decided in favour of assessee.
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