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2019 (2) TMI 1138 - ITAT KOLKATAPenalty u/s 271E - reasonable cause for the repayment of loan in cash by the assessee in violation of section 269T - HELD THAT:- As explained by the assessee during the course of appellate proceedings before the CIT(A), the delay in repayment of loan to SREI was due to weak financial position and this was the reason why the assessee could not repay the loan as per the agreed schedule. Had the assessee was in a position to repay the amount of loan in equal monthly instalments as per the agreed schedule, SREI could not have insisted for cash payment and the question of default u/s 269T would not have arisen. The weak financial position of the assessee resulted in default and delay in repayment of loan by the assessee and since this position was duly supported by the fact that the matter was referred to arbitral Tribunal, we are of the view that the insistence of repayment of loan in cash by SREI was natural corollary and the same constituted a reasonable cause for the repayment of loan in cash by the assessee in violation of section 269T. Keeping in view all these facts and circumstances of the case, we are of the view that it is not a fit case to impose penalty u/s 271E and cancelling the said penalty imposed by the AO and confirmed by the CIT(A), we allow this appeal of the assessee.
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