No escape from penalty even if cash received in excess of Rs. 20,000 was deposited on same day in bank a/c

Loading

No escape from penalty even if cash received in excess of Rs. 20,000 was deposited on same day in bank a/c

[2019] 103 taxmann.com 26 (Madras)
IT: Where director of assessee-company obtained cash in excess of Rs. 20,000 as loan from a financier and same was deposited by him in cash in bank account of company, merely because director took cash loans from financier, and deposited it in current account of assessee-company on very same day and assessee utilized it to pay salaries, rent and EMI commitments could never be a ground to be taken as a mitigating factor to escape from rigour of levy of penalty under section 271D
Section 269SS, read with sections 271D and 273B of the Income-tax Act, 1961 – Loans/deposits, mode of taking (Penalty u/s 271D) – Assessment year 2015-16 – Whether to be entitled to benefit under section 273B, onus is on person claiming such benefit to show that he could not get a loan by account payee cheque or demand draft and cause shown by him should be genuine and bona fide – Held, yes – Director of assessee-company obtained loan/cash exceeding Rs. 20,000 from financier JD – Loans so obtained were deposited by him in cash in bank account of assessee-company – In response to notice issued by Assessing Officer regarding violation of provisions of section 269SS, assessee explained that amount so received by director was deposited in company’s bank account on very same day and same was utilized to pay salaries, rents and EMI commitments, thus, there was reasonable cause for having availed loan transactions – Assessing Officer having rejected assessee’s explanation, passed penalty order under section 271D – Whether merely because director deposited cash obtained by it from JD in current account of assessee-company on very same day and assessee utilized it to pay salaries, rent and EMI commitments could never be a ground to be taken as a mitigating factor to escape from rigour of levy of penalty under section 271D – Held, yes
Vasan Healthcare (P.) Ltd.

Menu