TMI Blog2014 (12) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be read into the statutory provision. Assessee’s claim that in absence of sufficient funds, assessee had availed cash loan of ₹ 5 lakh, is not acceptable - so far as the other loan of ₹ 5 lakh, it is to be noted that the closing cash balance as on 04/03/10 was ₹ 1,66,597, therefore, assessee’s explanation that availing of cash loan of ₹ 5 lakh for the purpose of meeting business exigency on account of payments to be made to labourers etc., is acceptable - there was sufficient cash balance on 03/12/09 to meet the business exigency, and there was no need to avail cash loan on 03/12/09 – assessee has failed to reasonably explain availing of cash loan to the extent of ₹ 5 lakh on 03/12/09 - penalty to the extent of ₹ 5 lakh for availing cash loan of ₹ 5 lakh on 03/12/09 has to be sustained – Decided partly in favour of assessee. - ITA No. 365/Hyd/2014 - - - Dated:- 12-12-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Shri V. Siva Kumar For the Respondent : Shri Rajat Mitra ORDER Per Saktijit Dey, J. M. This appeal by the assessee is directed against order dated 9/12/2013 of ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakh each on two occasions to make labour payments from Shri B. Srinivasa Rao, who happens to be assessee s husband s own brother and whose family stay very nearby to her house. It was thus submitted that only for meeting business exigency and due to urgent need cash loan was taken. It was submitted that labourers doing repair and maintenance work demand their payments once their work is completed and they will usually not wait for payment. It was submitted that on completion of work, settlement of payment in these types of works like painting etc. usually takes place till late evening and by the time they complete their work, the staff in the accounts department will leave. Therefore, considering the fact that no cash was available on those dates, assessee had to take cash loans from Shri B. Srinivasa Rao for paying them to the labourers. It was submitted that TDS as applicable on payments was made and remitted to the Central Govt. account. Further, assessee submitted that Shri B. Srinivasa Rao manages some contracts and is into business for quite some time and he is also assessed to income-tax, therefore, there cannot be any doubt with regard to the loan transactions between two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identifiable so long as the cash loan/deposit does not satisfy the exceptions provided in the section, penalty is imposable for technical offence of accepting the deposit in cash. He observed that if assessee s contention is accepted, the section itself would be rendered nugatory or otiose because section 269SS/271D seeks to levy penalty mainly on technical offence. He concluded that as language of section 269SS is unambiguous, assessee s explanation that genuine transaction cannot be considered for imposition of penalty, is not acceptable. So far as necessity/reasonableness of accepting the cash loan, addl. CIT also found the explanation of assessee to be unacceptable. Addl. CIT noted that the account books maintained by assessee during the relevant period indicated that assessee was having cash balance of ₹ 5,16,837.81 on 03/12/2009, when she availed first cash loan of ₹ 5 lakhs. Similarly, the closing balance on 03/12/2012 was ₹ 5,36,675.81 without taking into account the cash borrowal of ₹ 5 lakh from Shri B. Srinivasa Rao. He further observed that the entries in the cash book in the subsequent dates also showed that there was no need to borrow cash from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no reason to accept the loan of ₹ 5 lakh in cash. She noted that even assessee could not establish the fact that the cash loan claimed to have been received towards meeting repairs and renewals of the hospital building has been spent for the intended purpose with any documentary evidence like bills, vouchers, or confirmations from masons etc. By observing that the explanation submitted by assessee is very general in nature and her attempt to show that there was a reasonable cause in accepting cash loan in violation of the provisions of section 269SS is unacceptable in absence of any supporting evidence. Ld. CIT(A) confirmed penalty of ₹ 10 lakhs levied u/s 271D of the Act. 6. Ld. AR more or less reiterated the submissions made before the departmental authorities. He relied on the following decisions: 1. Rajendra Suryavanshi Vs. ACIT, 20 Taxmann.com 358 (Pune) 2. CIT Vs. Parma Nand, 180 CTR 489 (Del.) 3. CIT Vs. Bhagvati Prasad Bajoris(HUF) 263 ITR 487 (Gau.) 4. CIT Vs. Manoj Lalwani, 260 ITR 590 (Raj.) 7. Ld. DR, on the other hand, relied on the orders passed by the revenue authorities. 8. We have considered the submissions of the parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed cash loan of ₹ 5 lakh, in our view is not acceptable. However, so far as the other loan of ₹ 5 lakh obtained on 04/03/10, on perusal of cash book extract of 04/03/10, it is to be noted that the closing cash balance as on 04/03/10 was ₹ 1,66,597, therefore, assessee s explanation that availing of cash loan of ₹ 5 lakh for the purpose of meeting business exigency on account of payments to be made to labourers etc., is acceptable. However, regard being had to the fact that there was sufficient cash balance on 03/12/09 to meet the business exigency, if any, in our view, there was no need to avail cash loan on 03/12/09. Therefore, assessee, according to us, has failed to reasonably explain availing of cash loan to the extent of ₹ 5 lakh on 03/12/09. Accordingly, we are of the view that penalty to the extent of ₹ 5 lakh for availing cash loan of ₹ 5 lakh on 03/12/09 has to be sustained. In the aforesaid facts and circumstances, we direct AO to reduce penalty imposed u/s 271D to a sum of ₹ 5,00,000. 10. In the result, assessee s appeal is partly allowed. Pronounced in the open court on 12/12/2014. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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