TMI Blog2014 (10) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... ney lending business, he lends money in cash and receives back in cash. He does not lend or receive back in cheque or draft. The assessee took loan in cash from a private money lender. Once in the trap of private money lender, the assessee was forced to follow his diktat. The assessee even if willing to re-pay the loan amount through banking channel was forced to pay in cash due to the terms imposed by the money lender. The assessee re-paid the loan amount in instalments of ₹ 2.00 Lakhs each in the period spread over in the AYs.2008-09 & 2009-10. Once in debt, assessee had no option but to accept the terms imposed by the money lender, Mr.A.Kannan for re-payment of loan amount. In these circumstances, we are of considered opinion that the assessee was constrained to re-pay loan amount as per the whims and fancies of Mr.A.Kannan by violating the provisions of section 269T. In the facts of the case, we are satisfied that the re-payment of loan amount in cash was out of compelling reasons. The penalty levied u/s.271E is deleted, the impugned orders are set aside and the appeals of the assessee are allowed. - I.T.A. Nos. 419, 420 & 421/Mds/2014 - - - Dated:- 27-10-2014 - Dr. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr.A.Kannan, as advance for sale of his property. The Sale of land could not be finalized, therefore, the assessee had to return the advance. The advance amount was returned by the assessee to Mr.Kannan in various cash installments, as the assessee had invested the amount of advance elsewhere. Not satisfied with the explanation furnished by the assessee for accepting loan in cash and re-payment of the same in cash, the Assessing Officer levied penalty u/s.271D r.w.s.269SS and u/s.271E r.w.s.269T vide separate orders. Aggrieved by the penalty orders for the respective AYs, the assessee challenged the same before the CIT(Appeals). The CIT(Appeals) vide impugned orders upheld the findings of Assessing Officer and confirmed the penalties levied u/s.271D 271E for the impugned AYs. Now, the assessee has come in second appeal before the Tribunal assailing the action of CIT(Appeals) in confirming the penalty orders. 4. Shri B.K.Moorthy, appearing on behalf of the assessee submitted that cash transactions were undertaken on account of business expediency. The ld.AR of the assessee submitted that the assessee was constrained to take cash loan from Mr.A.Kannan in order to pay sale tax de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riyar Nagar, Pondicherry and had repaid the same in cash. Penalties u/s.271D and 271E for the impugned AYs therein were levied. In the first appeal, the CIT(Appeals) confirmed the penalties. On appeal before the Tribunal, the co-ordinate bench of the Tribunal vide order dt.29-05-2014, dismissed the appeals of the assessee and confirmed the penalty. To buttress his arguments, the ld.DR further placed reliance on the following decisions: i. Assistant Director of Inspection Vs. Kum. A.B.Shanthi reported as 255 ITR 258 (SC); ii. P. Baskar Vs. CIT reported as 340 ITR 560 (Madras); iii. Dhanji R. Zalte Vs. ACIT reported as 265 ITR 204 (Bombay); iv. Thenamal Chhajjer Vs. JCIT reported as 98 ITD 210 (Chennai); and v. Khizaria Leathers Vs. DCIT reported as 99 TTJ 616 (Chennai). To counter the argument of the assessee, that the Assessing Officer had not given adequate opportunity to rebut the materials collected against for levy of penalty, the ld.DR placed reliance on the judgment of the Hon'ble Calcutta High Court in the case of Hindustan Tobacco Co. Vs. CIT reported as 211 Taxman 111 (Cal). 6. We have heard the submissions made by the representatives of both the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since he had invested the advance, he could not immediately refund the same. He agreed to refund the same in instalments . Before the Tribunal, the assessee again changed his stance and cited altogether different reason for taking ₹ 20.00 Lakhs in cash from Mr.A.Kannan. The ld.AR has contended that the assessee is a partner in a firm and there was a sales tax demand of more than ₹ 40.00 Lakhs. The demand notice was issued by Commercial Tax Officer-II, Puducherry dt.03-07-2007 and the payment was to be made within thirty days. The assessee could not arrange funds from the bank for discharging said liability. Therefore, the assessee decided to sell his property at Rainbow Nagar, Puducherry to meet the demand. Mr.A.Kannan, agreed for the same and advanced a sum of ₹ 20.00 Lakhs in cash on 19-07-2007 and the assessee handed over the Xerox copies of the title documents of the property. With this ₹ 20.00 Lakhs, the assessee was able to meet the sale tax demand of more than ₹ 40.00 Lakhs on 27-07-2007. The assessee has placed on record a photo copy of the Notice of Final Annual assessment and Demand dt.03-07-2007 and the statement of bank account from I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals)- VI on 24-09-2012. The case was fixed for hearing on 14-08-2013 i.e., almost one year after the filing of the appeal. Opportunity of hearing was given to the assessee on 14-08-2013 26-08-2013. Even at that time, the assessee did not bother to file documents before the CIT(Appeals). The assessee has been taking consistently inconsistent stand before different authorities. The assessee is trying to weave a cover up stories to cloth his follies. The explanations put forth are after thought which the assessee is trying to fit in by hit and trial. Therefore, it is difficult to believe on the stand taken by the assessee before the Tribunal. Be that as it may, it is an un-denying fact that the assessee has taken cash loan of ₹ 20.00 Lakhs in violation of provisions of section 269SS. Here it would be relevant to mention that whether the loan was taken for personal purpose or for the firm the provisions of section 269SS have equal applicability. The assessee has not been able to furnish explanation worth relying to set aside the penalty. In these circumstances, we are constrained to uphold the order of CIT(Appeals) confirming levy of penalty u/s.271D. 9. Now, we advent to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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