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2015 (2) TMI 362 - HC - Income TaxPenalty under section 271E - loan or deposit - cash payment versus book adjustments in violation of section 269T - Held that:- Assessing Officer did not indicate the method of payment. It was simply mentioned that everything was done in cash. The very fact that from the same agencies, amounts were said to have been received and repaid, as reflected in the books, discloses that it was nothing but book adjustment. Further, he did not give any specific finding that the so-called receipts are in the form of loan or deposit or the repayment was made thereof. All the three orders passed by the Assessing Officer are silent about the payment made to Smt. Sarada Mohan. The Appellate Commissioner as well as the Tribunal proceeded on the same lines. They did not bestow any attention as to whether one of the sister concerns can take deposit, or loan, from another, without reflecting the same in the books of account Making book adjustment of the funds, by a firm vis-a-vis its sister concern, can by no means be said to be the one taken in clear violation or contravention of the said provisions. It is only when an assessee has taken a decision to mobilise loans or deposits and in the process it has received amounts exceeding ₹ 20,000, otherwise than through cash that the contravention can be said to have been taken place. Similarly, section 269T can be said to have been violated if only the repayment to a depositor or a loanee exceeding a sum of ₹ 10,000 was made otherwise than through crossed cheque or demand draft. In the instant case, the Assessing Officer did not identify the loanee or depositor and has simply invoked the provisions in relation to an internal financial adjustment among the firms. - Decided in favour of assessee.
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