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2016 (5) TMI 1168 - AT - Income TaxPenalty u/s 271D - violation of provisions of section 269SS - Held that:- We find that the assessee instead of merely responding by way of journal entry on 26.9.2006 in its books, had erroneously passed a receipt entry and a payment entry in its cash book. Hence the entire penalty proceedings had been triggered only based on mere book entries of the assessee and there is no categorical finding that the assessee indeed had received cash from the director when the assessee had actually denied the same. We also find that independent examination of the director was made by the Learned AO to ascertain the true facts, wherein the director had categorically stated on oath that he neither had any cash balance or paid any cash loan to the company. We also find that merely by passing one receipt entry in cash book and one payment entry in cash book for the same sum of ₹ 17,25,000/-,no additional source of cash had emanated to the assessee, which fact is quite evident from the relevant pages of the cash book itself, forming part of the paper book filed before us. We find that the closing cash balance as on 26.9.2006 was only ₹ 13,17,466.11 and it had not increased by ₹ 17,25,000/- as alleged by the Learned AO. We are convinced that there is no case for invoking the provisions of section 269SS of the Act and hence the penalty levied u/s 271D for violation of section 269SS of the Act thereon is quashed herewith - Decided in favour of assessee Penalty u/s 271E - violation of provisions of section 269T - Held that:- assessee was duly necessitated by force to make the payments in cash to its director for onward transmission to the buyers of agricultural lands. - assessee had duly adduced reasonable cause in terms of section 273B of the Act and hence no penalty could be levied u/s 271D of the Act. Further,t here is nothing on record that transactions made by the assessee is not genuine and the amount involved was unaccounted. - There is no case for invoking the provisions of section 269T of the Act and hence the penalty levied u/s 271E for violation of section 269T of the Act thereon is quashed herewith.- Decided in favour of assessee
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