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2020 (4) TMI 737 - AT - Income TaxPenalty u/s. 271D and u/s. 271E - default u/s 269SS and 269T - acceptance and repayment of loans or deposits in cash - Co-operative Societies to be treated as credit societies as alternative to Bank - bonafide belief - HELD THAT:- Assessee has accepted and repaid deposit of loans above ₹ 20,000/- otherwise then by the account payee cheque or account payee draft on a bonafide belief that provisions of section 269SS and 269T are not applicable in its case. AO had also accepted that deposits made by the assessee are genuine and the breach of provisions of section 269SS and 269T was occurred due to bonafide belief. Even no addition was made on account of these impugned deposits in the Return of Income and thus the veracity of the creditors was not doubted by the Revenue. In case, if the veracity was doubted, then the additions would have been made u/s.68 of the Act. It is an undisputed facts that these credit societies function in villages/taluks etc., for farmers or related persons, as an alternative to banks and if the deposits were taken/repaid only in cheques, then it may loose all relevance. Even the Chartered Accountant who audited the books of accounts was not showing these as being in contravention of the Act in the relevant columns of Audit Report. Under bonafide belief assessee could accept and repaid loan or deposits in cash as is done by the Co-operative Banks, the assessee had accepted and repaid loans or deposits in cash. Provision of section 269SS are not applicable in the present case. - Decided against revenue.
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