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2015 (11) TMI 1370

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..... pled with the fact that the assessee was undergoing a financial difficulty. Also find that the case law relied upon by the Ld. DR is based on different facts i.e. there is no material to show the real exigency to take cash loan. However, in the case laws cited by the Ld. Counsel of the assessee there was definite sufficient cause to establish the real exigency of taking the cash loans. CIT(A) has rightly observed that assessee has demonstrated the funds were arranged in cash on urgent requirement of the business which is in accordance with commercial expediency of assessee’s business which was being closed during the year as the remaining stock of cloth was being sold to clear the outstanding of the business by paying the outstanding cre .....

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..... w, the Ld. CIT(A) has erred in deleting the penalty u/s. 271E of the I.T. Act, 1961 of ₹ 22,85,000/-. 2. That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. 3. That the appellant craves leave to add, alter, amend or forgo any ground(s) of the appeal raised above at the time of the hearing. 4. The brief facts of the case are that the assessee filed her return of income on 30.07.2009 declaring an income of ₹ 1,78,400/-. The case was fixed for scrutiny and the assessment was completed on 30.12.2011 at an income of ₹ 1,78,400/-. As per A.O. assessee is maintaining the bank accounts and in these accounts numerous cash deposits totaling to ₹ 27,01,600/- have been made by .....

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..... of the assessee is squarely covered by these case laws:- (a) Kamen Jaswantlal Shah vs. ITO {2012) 19 Taxmann.com 99 (Ahd.) - ITAT, Ahmedabad (b) CIT vs. Sree Krishna Promoters Builders [2011] 16 taxmann.com 138 (Kar.) High Court of Karnataka (c) CIT vs. Shivalik Loha Mills Ltd. 2007-TIOL-75-HCP H-IT (d) CIT vs. Bangalore Leather Leather Crafts Ltd. [2012] 19 taxmann.com 21 (Kar.) (e) CIT vs. Lakshmi Trust Co. [2008] 303 ITR 99 (Mad.) (f) CIT vs. Balaji Traders [2008] 167 Taxman 27 (Mad.) (g) Addl. CIT vs. BBL Foods Pvt. Ltd. 2008-TIOL-299- ITAT-HYD. (h) Rajendra Suryavanshi vs. ACIT [2012]taxmann.com 358 (Pune) ITAT, Pune Bench. (i) CIT vs. Cadbury India Ltd. [2011] 11 taxmann.c .....

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..... ty is not automatic under section 271D on mere violations of provisions of section 269SS.The words reasonable cause' have not been defined under the Act, but they could receive the same interpretation which is given to the expression 'sufficient cause'. Therefore, in the context of the penalty provisions, the words 'reasonable cause' would mean a cause which is beyond the control of the assessee. Reasonable cause' obviously means a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bonafides. Before imposition of penalty under these sections, the Assessing Officer must be satisfied, not arbitrarily but judiciously, that the assesse .....

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..... iency and business need amounts to reasonable cause and in the case of reasonable cause the penalty uls. 271D is not leviable. It is further strengthened from the fact that AO has accepted the returned income and has not disputed the fact that these transactions are recorded in books of Alc's. 7. From the material on record, there is nothing to indicate that the amount received and repayment is a loan or unaccounted for. It is entered in the accounts duly maintained by both. In fact, the purpose for which the said amount was received is also clear from the material on record and therefore there is nothing to indicate that this amount is paid as loan or deposit. In the absence of such material on record keeping in mind the relation .....

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..... ssessee there was definite sufficient cause to establish the real exigency of taking the cash loans. I also find that the Ld. CIT(A) has rightly observed that assessee has demonstrated the funds were arranged in cash on urgent requirement of the business which is in accordance with commercial expediency of assessee s business which was being closed during the year as the remaining stock of cloth was being sold to clear the outstanding of the business by paying the outstanding creditors and as a result, the assessee has undergone a financial crisis, hence, Ld. CIT(A) has rightly deleted the penalty in dispute. In view of above, I find no infirmity in the impugned order passed by the Ld. CIT(A), hence, I uphold the same by dismissing the appe .....

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