Facts
a)
Assessee, a private
limited company, received share application money of Rs. 5 lakh in cash from
its directors.
b)
Assessing Officer (AO)
imposed penalty on it under Section 271D for violating the provisions of
Section 269SS since the amount had been received in cash exceeding the limit of
Rs. 20,000.
c)
Assessee contended
that amount was received to meet business exigency warranting immediate discharge
of certain liability. Therefore, such genuine transactions would not attract
penalty under section 271D as envisaged in section 273B.
d)
Commissioner
(Appeals) confirmed the order of the AO. Aggrieved assessee filed the instant
appeal before the tribunal.
The tribunal held in favour
of assessee as under-
1)
Section 273B
provides that no penalty shall be imposed on assessee for any failure referred
to in section 269SS, if he proves that there was reasonable cause for failure
to take a 'loan' or 'deposit' otherwise than by account-payee cheque or
account-payee bank draft.
2)
It was observed by the
ITAT that cash flow position of assessee had been crippled due to losses.
Therefore, cash was received from directors to meet business exigency. Further,
the revenue had not doubted the sources of deposits made by the directors of
the company.
3)
Assessee had proved
without any shadow of doubt that the transaction was genuine and there was a
reasonable cause for accepting cash from directors. Therefore, there was no
reason to sustain the penalty levied under section 271D- [2016] 67 taxmann.com
374 (Chandigarh - Trib.) Commissioner
(Appeals) confirmed the order of the AO. Aggrieved assessee filed the instant
appeal before the tribunal.
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