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2013 (8) TMI 36 - ITAT MUMBAIPenalty u/s 271D - violation of the provisions of section 269SS as loan was taken otherwise than by A/c Payee cheque or A/c Payee Bank Draft - Held that:- There was a reasonable cause with the assessee company in requesting its sister concern to immediately make payment to old supplier with whom litigation was going on and also to the supplier of machinery. Thus satisfied that the provisions of section 273B have come to the rescue of the assessee in the present circumstances, thus with the existence of such reasonable cause, there can stand no penalty u/s 271D. In favour of assessee. Penalty u/s 271E - assessee made cash re-payment totaling Rs. 3,70,306/- thus violation of the provisions of sections 269T - Held that:- M/s Devang Industry Inc. paid Rs. 1,00,000/- to M/s Prajvi Industrial Supplies and Rs. 4,00,000/- to M/s Ravi Industrial Corporation on behalf of the assessee due to financial crunch on the assessee. In order to repay the said loan, the assessee made certain re-payments in cash over the period form 02.04.2005 to 21.08.2005 which totaled Rs.3.70 lacs. Force in the submissions of the assessee that the sister concern was mounting pressure on the assessee to immediately repay the amount in cash, even if it was to be in small installments. Apart from that, it is further noticed that the assets of the company were attached on 11th August 2006 and such attachment was lifted only on 18.03.2006. All the amounts in question were paid to the sister concern during the period of attachment. These facts and circumstances do go to show that there was a reasonable cause within the meaning of section 273B for making such re-payments otherwise than by way of A/c Payee Cheques or A/c Payee Bank Drafts. Thus penalty u/s 271E was wrongly sustained. In favour of assessee.
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