TMI Blog2010 (7) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 23,000/- in cash on 8.7.2005 and has accordingly violated provisions of section 269SS attracting the penalty under section 271D of the I.T. Act, 1961. This deposit in the bank account being O/D account in Standard Chartered Bank, Ahmedabad was made in cash on 8.7.2005. It was explained to the AO that assessee had a limit in the O/D account at ₹ 2,01,600/- upto ITA No.2121/Ahd/2010 Asst. Year :2006-07 31.7.2005. On 20.6.2005 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, further opportunity was allowed to the assessee for compliance at 11.00 a.m. of 21.10.2008 but no further reply was furnished. It appears that the assessee has nothing to say in his support. In view of the above facts, I am satisfied that the assessee has willfully and deliberately accepted 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/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is any contradiction in what is stated before him. Further genuineness of the transaction should have been verified and shown that it was in fact money of the assessee and not that of Mrs. Trivedi. Once having accepted the genuineness of the transaction, the explanation cannot be treated as unsatisfactory unless it is investigated and found to be false. If the events narrated in the explanation could have taken place then without contradicting the facts stated in the explanation, it cannot be rejected. If the law provides that penalty can be levied as explanation is not satisfactory then satisfaction of the AO on the explanation furnished by the assessee should be objective and not merely subjective rejecting out-rightly, even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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