Penalty under section 271D fails where cash is not proved to be a loan or deposit under section 269SS.

Cash received as earnest money was held not to fall within the mischief of section 269SS because it was explained as temporary parking of sale proceeds by an agriculturist father without an operating bank account, and that explanation was not rebutted by the Revenue. On those facts, the receipt was not established as a loan or deposit, so the foundation for penalty under section 271D failed and the penalty was deleted.

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Issues: Whether penalty under section 271D of the Income-tax Act, 1961 was leviable for receipt of cash amount allegedly in violation of section 269SS of the Income-tax Act, 1961.

Analysis: The assessee explained that the cash amount represented earnest money received by the father on sale of land, that the father was an agriculturist without an operating bank account, and that the amount was parked in the assessee's account only temporarily for safety and security before being returned after a short period. This explanation was not rebutted by the Revenue. On these facts, the receipt was not established to be a loan or deposit within the mischief of section 269SS, and the foundation for penalty under section 271D did not survive.

Conclusion: The penalty under section 271D was not leviable and was deleted in favour of the assessee.

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