TMI Blog2011 (2) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee against the Revenue s appeal in ITA No. 1172/Mds/2010. ITA No. 2024/Mds/2010 is an appeal filed by the Revenue against the order of the learned CIT(Appeals)-I, Madurai cancelling the penalty levied u/s. 271E of the Income Tax Act, 1961 in ITA No. 43A/08-09 dated 26-04-2010 for the assessment year 2004-05. 2. Shri P.B. Sekaran, learned CIT-DR represented on behalf of the Revenue and Shri T. Vasudevan, Advocate represented on behalf of the assessee. 3. ITA 1172/Mds/2010: It was submitted by the learned DR that in the course of assessment proceedings in the case of the assessee who was an individual it was noticed that the assessee had borrowed cash loans exceeding the limits prescribed in sec. 269SS from various parties. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manding that the assessee reduce the overdraft amounts. Consequently, the assessee was compelled to take cash and deposit into the bank account. It was the submission that in some cases where the monies had been taken in cash the same were also used for settling the account of one of the trade creditors being M/s. Rasi Sales Corporation as they were demanding immediate payment and the assessee s overdraft facility was also running at its maximum. It was the further submission that on account of this financial adjustment that had to be done, i.e. for keeping the overdraft facility in controllable level as also for paying off the trade creditor, M/s.Rasi Sales Corporation, the assessee had borrowed the monies from Shri Jayaraj, B. Mala and B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly shows that the assessee had taken the loans for the purpose of settling the bank overdrafts or the trade creditor, M/s. Rasi Sales Corporation as also for settling the earlier cash loans taken. These explanations which have been given by the assessee before the Assessing Officer have not been disputed by the Assessing Officer. How these business exigencies as stated by the assessee do not constitute business exigencies have not been shown by the Assessing Officer. The difficulties of a businessman are known to the businessman only. The fact that the provisions of section 269SS and 269T have been brought into the statute for the purpose of controlling the inflow and outflow of black money has to be kept in mind. This is not a case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... call for any interference. In the circumstances, the appeal of the Revenue in ITA No. 1172/Mds/2010 stands dismissed. 6. C.O. No. 84/Mds/2010: The cross objection filed by the assessee is in support of the order of the learned CIT(A) and as we have already upheld the order of the learned CIT(A), the cross objection filed by the assessee stands dismissed. 7. ITA No. 2024/Mds/2010: In this appeal the Revenue has challenged the action of the learned CIT(A) in cancelling the penalty levied under section 271E of the Income Tax Act, 1961 on account of the repayment of the loans in cash taken by the assessee in cash. The learned DR and the learned authorised representative re-iterated their submissions as made in regard to ITA No. 1172/Mds/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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