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Shri Bhupendrakumar Bhai lalbhai Patel, Prop. Of M/s Silphochem Indus. Versus Jt. CIT, Range-6, Ahmedabad

2010 (7) TMI 1117 - ITAT AHMEDABAD

ITA No.2121/Ahd/2010 - Dated:- 7-7-2010 - Shri D.C.Agrawal, Accountant Member For the Assessee :- Shri G. S. Patel , AR For the Revenue : - Shri P. R. Ghosh, DR ORDER Per D. C. Agrawal, Accountant Member. This is an appeal filed by the assessee against confirming penalty of ₹ 23,000/- under section 271D. 2. The facts of the case are that during the course of assessment proceedings the AO verified Annexure A-3, to the Audit Report indicating the deposits as exceeding the limit satisfied in .....

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0.6.2005 the outstanding balance was noticed at ₹ 1,93,942/-. There was a telephonic information to the assessee that further cheques may not be honoured as assessee is approaching the O/D limit. Accordingly a sum of ₹ 23,000/- was borrowed from Mrs. M. K. Trivedi and was deposited in the bank so as to reduce the debit balance. In response to penalty notice the assessee furnished following reply to the AO:- From Bhupendrakumar Bhailalbhai Patel, Prop. Of M/s Sulphochem Indus., 268/1 .....

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positor Mrs. M. K. Trivedi (through her husband) personally went to bank and deposited ₹ 23000/- to co-operate me in my bad financial position. In view of these facts I respectfully submit that the deposit was made for bad necessity and there was no intension to ignore the law. This was only the transaction and hence I request you to consider my bonafides and drop the penalty proceedings. Thanking you, Yours faithfully, Bhupendrabhai B. Patel The AO was, however, not satisfied and levied t .....

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deposit of ₹ 23,000/- in cash on 8.7.2005 and violated the provisions of section 269SS of the IT Act, 1961. Therefore, the assessee is liable for penalty u/s 271D for accepting loan/deposit above ₹ 20,000/- other than by account payee cheque from Mrs. M.K. Troivedi. The assessee is therefore liable to pay penalty u/s 271D of the I.T.Act, 1961, minium and maximum penalty leviable of the I.T. Act, 1961 which comes to ₹ 23,000/-. 4. After considering the facts of the case, a penal .....

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ave heard the parties and carefully perused the material on record. In my considered view the assessee has furnished an explanation which has not been found false or incorrect. This is one of the plausible explanations for depositing money in cash. His OD limit stated by the bank was approaching fast and there was an apprehension of cheques being dishonoured and accordingly immediately cash was deposited by borrowing from Mrs. M. K. Trivedi. The authorities below have not made any addition in re .....

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