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ITO, Ward-5 (2) , New Delhi Versus Smt. Kavita Behal

2015 (11) TMI 1370 - ITAT DELHI

Penalty u/s. 271D and 271E - numerous cash deposits and repayment was made in cash - CIT(A) deleted the penalty - Held that:- 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. Find considerable cogency in t .....

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he 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 creditors and as a result, the assessee has undergone a financial crisis, hence, Ld. CIT(A) .....

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elevant to assessment years 2009-10. Since the issues involved in both the appeals are identical, hence, these appeals are being consolidated by this common order for the sake of convenience, by dealing with ITA No. 6528/Del/2013. 2. The following grounds have been raised in ITA No. 6528/Del/2013 (AY 2009-10) :- 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty u/s. 271D of the I.T. Act, 1961 of ₹ 27,01,600/-. 2. That the ord .....

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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 th .....

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cause notice for penalty u/s 271D and passed an ex-parte order dated 27.09.2012 u/s 271D of the Act imposing the penalty of ₹ 27,01,600/-. 5. Against the above penalty order, the Assessee appealed before the Ld. CIT(A), who vide impugned order dated 6.9.2013 has allowed the appeal of the assessee and delete the penalty in dispute. 6. Aggrieved with the Ld. CIT(A) s Order dated 6.9.2013, Revenue is in appeal before the Tribunal. 7. Ld. DR relied upon the order of the Assessing Officer and f .....

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lso relied upon the following cases laws and stated that the present case 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 Tr .....

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asthan High Court. (l) DCIT vs. Akhilesh Kumar Yadav [2012] 26 taxmann.com 264 (Agra Tribunal) (m) Bright Play Centre vs. Addl. CIT 2011-TIOL-712-ITATAHM (n) OMEC Engineers vs. CIT [2007] 294 ITR 599 (Jhar) (o) CIT vs. T. Perumal (Indl.) [2015] 370 ITR 313 (Mad.) (p) CIT vs. Speedways Rubber Pvt. Ltd. [2010] 326 ITR 31 (P&H). 9. I have heard both the parties and perused the relevant records, especially the orders of the revenue authorities as well as the case laws cited by both the parties. .....

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rovides that no penalty shall be imposable on a person or an assessee, as the case may be, for any failure referred to in the said provision if the assessee proves that there was a reasonable cause for such failure. In other words, penalty 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' .....

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easonable cause failed to comply with the provisions. While considering reasonableness one should keep in mind commercial expediency and object of the section for which it was inserted. It is to see whether the transaction is in accordance with commercial expediency. If I see the facts of the case under consideration in consolidated way, I noticed that the assessee has demonstrated the funds were arranged in cash on urgent requirement of the business which is in accordance with commercial expedi .....

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s passed without any adverse inference and the returned income was accepted without any additions or disallowances. From the facts of the case, we find that the assessee took small amounts of money from time to time and repaid back in small amounts was in accordance with commercial expediency of assessee's business as the demand of business of the assessee was such at that point of time. The bona fide transactions of the assessee carried out in accordance with commercial expediency and busin .....

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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 relationship between the parties the nature of transaction coupled with the fact that the assessee was undergoing a financial difficulty, if. I do not see any merit in this appeal. 8. I therefore, delete the penalty of ₹ 27,01,600/- levied by the AO u/s. 27lD of the Act. 1 .....

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