TMI Blog1993 (3) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny of accounts, the Assessing Officer found that Rs. 10,080 and Rs. 21.960 was received by the assessee from Ashok Kumar and Rajesh Kumar respectively in cash which contravenes section 269SS, therefore, is liable for penalty under section 271D. He levied penalty of Rs. 32,040 under that section. The assessee filed appeal against this order before the Id. CIT (A). 3. Before the Id. CIT (A) the assessee submitted that intention of section 269SS was to curb bogus or dummy or unaccounted cash loans or deposits. In this case genuineness of the deposits is not in quandary, rather, it had been accepted by the Assessing Officer as genuine and the assessment order is ideograph of it. In earlier years and this year also bigger amounts had been tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty had been levied were in cash contravening section 269SS and hence the penalty was rightly levied. The Id. counsel for the assessee, on the other hand, argued that the intention of inserting section 269SS has been discussed in Board's Circular. It was pointed out that main purpose of this section was to damper devise to explain away unaccounted cash or unaccounted deposits. Here in this case in the assessment order there is no whisper about the unaccounted cash or unaccounted deposits and, therefore, the application of section 269SS is erroneous. The Id. counsel then argued that the assessee had an impression that deposits more than Rs. 20,000 of any particular year would attract section 269SS and for this misconception no penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of taking the deposit in cash. Hence, penalty should not have been levied for this transaction in cash. I have carefully perused the Circular of the Board referred to by the Id. counsel, but I am unable to catch myself with the interpretation. It is no doubt that section 269SS was inserted for some purpose. The purpose was to, as clearly stated in the Circular, damper the transaction in cash to introduce unaccounted deposits. It does not suggest that in genuine transactions section 269SS is not applicable. A posterior study of Circular foster other impression. This section enacted to enforce transactions of deposits or loan over certain limitation to be made through cheque media so that bogus transactions may be arrested. The difference i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of such loan and deposit : or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount of the aggregate amount remaining unpaid ; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b) is thousand rupees or more." I have considered the decisions relied upon by the Id. counsel for the assessee. I respectfully agree with the view taken by the Hon'ble High Court in Lakshmi Enterprises case that the imposition of penalty contravening section 269SS is discretionary and if it is misconceptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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