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2017 (5) TMI 207 - ITAT HYDERABAD

2017 (5) TMI 207 - ITAT HYDERABAD - TMI - Penalty proceedings u/s. 271D - assessee had received loans from various individual- Directors in cash in excess of the limits prescribed u/s. 269SS - Held that:- The company has accepted amounts from the directors and the explanations from the directors was considered in the assessment proceedings and accepted. There is truth in the contention of the assessee that on the same explanation given in the assessment proceeding, the penalty proceedings cannot .....

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nses of the office as the company is having financial difficulties. Further substantial amount was deposit in Bank Account directly. Explanation given was accepted in assessment proceedings, so the same can be considered as reasonable for accepting cash for the purpose of section 271D read with section 273B. - Thus it is of the view that the assessee has shown reasonable cause within the meaning of section 273B, therefore, the penalty order is to be set aside. - Decided in favour of assessee .....

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67,516/- under normal provisions and book profits at ₹ 66,878/- u/s. 115JB of the Income Tax Act [Act]. The scrutiny assessment u/s. 143(3) of the Act was completed on 25-03-2015 by making an addition of ₹ 56,180/- towards disallowance u/s. 40(a)(ia) of the Act. During the course of assessment proceedings, the Assessing Officer (AO) observed that assessee had received loans from various individual- Directors in cash in excess of the limits prescribed u/s. 269SS. However, to verify th .....

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paid to a creditor based on the court orders of the XIV Addl.GMM at Mayo Hall, Bangalore in CC No.26367/2011. The aforesaid amount of ₹ 11,25,000/- was directed deposited into the bank account of the company with Andhra Bank, Bangalore and a demand draf t was taken and paid to the creditor as per the directions' of the court. Thus it cannot be said the transaction is in the nature of a cash transaction contravening the provisions of section 269SS of the I.T.Act, 1961. Similarly an amo .....

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s of section 269SS of the Act, given the nature of transactions and the circumstances of the case when particularly the transactions are between the company inter-se and the directors as stated above. The AO failed to appreciate that the directors of the company have running current account with the company. On account of the fact that the financial status of the company was weak and the company was running in losses, the directors have brought in cash to tide over the temporary crisis created o .....

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ot; in terms of Sec. 269SS does not denote the director of the company. It denotes a person or persons who are not very intimately or closely connected to the appellant company. The financial position of the company was weak and the monies were brought in emergency situations to meet expenditure in the nature of salaries and other office expenses like paying for electricity bill, provident fund, telephones, conveyance etc. During the assessment proceedings, the AO had occasion to examine the boo .....

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rs vs. ACIT, ITAT Coachin Bench 74, Taxman page 290(Mag.), ITAT, Hyderabad in the case of Industrial Enterprises vs. DCIT, 73 ITO 252(Hyd.), ITAT Ahmedabad Bench in the case of Shrepak Enterprises vs. DCIT, etc . 4. Ld.CIT(A) after examining the facts, confirmed the penalty order by stating as under: 6. I have carefully considered the penalty order and submissions of the appellant. On perusal of the submissions it is found that the appellant has filed the same submissions which were filed before .....

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nds and hence I am in agreement with the Assessing Officer and the penalty levied confirmed. 5. Aggrieved by the order of Ld.CIT(A), assessee filed an appeal before the Hon'ble ITAT raising the following grounds: 1. The order of the Commissioner of Income-tax (Appeals)-4, Hyderabad CIT(A) in conf irming the levy of penalty imposed U/s.271-D at ₹ 18,95,024 is wholly unsustainable both on facts and in law. 2. The learned CIT (A) failed to note that the appellant was prevented by reasonab .....

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loans taken were utilized for business exigencies which fact was not disputed by either the Addl. CIT, Range-16, Hyderabad or the CIT(A) and therefore erred in sustaining the levy of penalty . 5. I have considered the rival contentions and perused the material available on record. As seen from the facts of the case, the company has accepted amounts from the directors and the explanations from the directors was considered in the assessment proceedings and accepted. There is truth in the contentio .....

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