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2015 (9) TMI 1102 - ITAT DELHI

2015 (9) TMI 1102 - ITAT DELHI - TMI - Penalty u/s 271E - violating the provisions of section 269SS and Section 269T - Held that:- On a consideration of the entire factual matrix and the judicial precedent thereon in the facts of the present case, we are of the view that there was bonafide belief on the part of the assessee that the transaction with the Directors and the shareholders for meeting urgent cash requirements for running the business would not result in any violations. Considering the .....

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essee. - ITA No. 293 & 294/Del/2012 - Dated:- 10-6-2015 - Diva Singh, JM And T. S. Kapoor, AM, JJ. For the Appellant : Shri R S Adlakha, Adv For the Respondent : Smt. Parwinder Kaur, Sr. DR ORDER Per Diva Singh, JM. Both these appeals filed by the assessee pertaining to 2006-07 assessment year are being decided by a common order. The assessee by the present appeals assails the correctness of the separate orders dated 25.10.2011 of the CIT(A)-XIII, New Delhi wherein the penalty orders imposed by .....

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g facts:- "Loans Taken in cash-violation of section 269SS of Income Tax Act, 1961:- Date Name of the Person Amount 29.06.2005 Divas Jain 25,000/- 31.10.2005 -do- 10,000/- 08.03.2006 Gokul Chand Jain 1,00,000/- 31.10.2005 -do- 20,000/- 15.05.2005 Madhu Jain 20,000/- 29.03.2006 -do- 1,00,000/- 14.04.2005 Sweta Jain 40,000/- Total 3,05,000/- Loans repaid in cash-violation of section 269T of Income Tax Act, 1961:- Date Name of the Person Amount 08.03.2006 Gokul Chand Jain 25,000/- 18.03.2006 -d .....

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ted that they were whole time Directors; and addressing the loans from Smt. Madhu Jain it was stated that she was also a Director. Smt. Sweta Jain, it was stated is a shareholder. The loan amounts were stated to be out of the amounts withdrawn from the respective bank accounts of each of the persons as per the Annexures attached. The amounts were stated to be deposited in the company bank a/c with Nanital Bank A/c No.-10035, Noida amounting to Rs. One lac and the remaining amount of ₹ 2.05 .....

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rse of assessment. 4. Transactions made between the company and directors/shareholders were under exceptional circumstances to accommodate the emergency needs of the company for a very short and temporary period. 5. The assessee company is managed by the members of the same family. 6. The assessee had no intention to conceal any particulars of those transactions." 4. Not convinced with the explanation offered the penalty of ₹ 3,05,000/- was imposed. The assessee challenged the said or .....

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ordingly in these circumstances, it was pleaded that in the face of the genuine hardships faced in meeting the financial needs, the amount was received in cash and it is not a case of tax evasion. The technical violation in these circumstances it was submitted would constitute a reasonable case in terms of section 273B of the Act. 6. Still aggrieved, the assessee is in appeal before the Tribunal. 7. The Ld. AR, Sh.R.S.Adlakha re-iterated the submissions advanced before the AO and the CIT(A). It .....

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ss needs of the assessee company, cash was received from them and subsequently also paid to them. The assessee being ignorant of the legal consequences considering the fact that all persons were known, tax paying assessees from the same family made payment and were repaid in cash in a bonafide belief for business exigencies on account of ignorance of the provisions of law as they had tried to keep the family business running. In these circumstances, it was his submission that keeping in mind tha .....

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ention to pages 17 & 17A in the case of Sweta Jain and 18 of the ledger account it was submitted it shows that it was a running account, similar ledger entries it was submitted have been passed in the case of other Directors also available in the Paper Book filed. Copies of the return of these persons it was submitted have also been filed for the year under consideration and are part of the Annexures before the AO. In these circumstances relying upon the following decisions it was submitted .....

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