TMI Blog2022 (7) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... - MADRAS HIGH COURT] was not satisfied with the explanation offered by the Assessee for not complying with the provisions of Section 269 SS of the Act. It was specifically observed that the Assessee had not shown any reasonable cause for taking cash loan . However, in the present case, as noted by the CIT(A), the Assessee did offer a reasonable explanation for taking cash loan and the circumstances in which it was required. In Commissioner of Income Tax v. Deccan Designs (India)(P) Ltd. ( 2010 (7) TMI 818 - MADRAS HIGH COURT] where an Assessee accepted cash loans from a sister concern mainly for the purpose of disbursement of salaries to its employees, it was held that the penalty under Section 271D was uncalled for. In Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the Assessee had accepted the loans of 1.5crores in cash from M/s Laxmi Nrushingha Construction and Rs.20lakhs in cash from M/s S.S. Parida during the AY in question in violation of the provision of Section 269 SS of the Act. 3. The reason given by the Assessee in response to the show cause notice issued by the Additional CIT for imposition of penalty was that both the entities from whom the cash loan was taken were partnership firms in which the Directors of the Assessee had controlling stake and other partners of the firms were family members and relatives of the Directors of the Assessee-Company. It was submitted by the Assessee that the cash was needed since urgent payments had to be made to the labourers and items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the CIT (A) allowed the Assessee s appeal and deleted the penalty imposed. 7. The ITAT has in the impugned order concurred with the CIT (A) after referring to the decisions of the Jharkhand High Court in Engineers v. CIT 294 ITR 599 ; and of the Punjab and Haryana High Court in CIT v. Saini Medical Store [2005] 277 ITR 420 and CIT v. Sunil Kumar Goel, 315 ITR 163 . Since the genuineness of the loan transactions were not in doubt and the explanation offered by the Assessee was reasonable, the ITAT declined to interfere with the order of the CIT(A). 8. Mr. T.K. Satapathy, learned Senior Standing Counsel for the Revenue, refers to the decision of the Madras High Court in P. Baskar v. CIT [2012] 340 ITR 560 to urge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of disbursement of salaries to its employees, it was held that the penalty under Section 271D was uncalled for. In Commissioner of Income Tax v. Maheswari Nirman Udyog (supra), it was found that loans had been taken by the Assessee from a sister concern in cash to make payments to the labourers at site. This was held to be a reasonable explanation which was accepted by the CIT (A) and the ITAT and therefore, did not warrant any interference in appeal. 11. In the circumstances of the present case, the Court is satisfied that no error has been committed either by the CIT (A) or the ITAT in deleting the penalty imposed on the Assessee. 12. No substantial question of law arises for consideration in this appeal. The appeal is accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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