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2015 (6) TMI 1252 - AT - Income TaxPenalty u/s.271D & 271E - loans in violation of the provision of Section 269SS - HELD THAT:- We found that in the instant case there was already credit in the account of Mr. Rahul G. Shah, which was not paid in cash but was credited in the name of his wife. Such credit either in the account of Rahul G. Shah was never doubted insofar as there was already credit existing in the books of account of assessee, or crediting this amount in the name of his wife by debiting account of Rahul G. Shah was doubted as non-genuine. The amount of Director’s remuneration credited to the account of Mr. Rahul G. Shah does not amount to any loan by assessee company to R.G.Shah, therefore, the AO was not justified in treating such credit of Director’s remuneration in his account as loan transaction and thereby imposing penalty u/s.271D - No justification for imposition of penalty by assuming that amount crediting in the name of assessee’s wife by debiting assessee’s loan account, which was already there in the books of account amounts to any contravention of provisions of Section 269SS so as to impose penalty u/s.271D&271E. Debiting assessee’s account was treated by the AO as repayment of loan and crediting his wife’s account was treated by the AO as receipt of loan. Period of limitation - We found that penalty proceedings u/s.274 r.w.s.271D & 271E, were initiated on 2-8-2007. As per Section 275(1)(c), penalty could be imposed only before end of the financial year or within the six months in which the penalty proceedings were initiated. As the later period expired on 31-3-2008, the penalty could have been imposed by that date only. Thus, the penalty imposed in 11-9-2012 was barred by limitation
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