TaxTMI 
TaxTMI 
2015 (7) TMI 196
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntial premises of Rudranee Group of Aurangabad. During the said search operation, it was noticed that Shri Kachrulal Nathmal Mutha of Jalna had given cash loan of Rs. 25 lakhs to Rudranee Construction Company of Rudranee group of Aurangabad. Consequential survey action u/s.133A of the I.T. Act was conducted on 02-02-2006 at businesscum- residential premises of Shri Kachrulal Nathmal Mutha who was engaged in unauthorised money lending. As per the modus operandi, Shri Kachrulal Nathmal Mutha was to give cash loan in Hundies and keep the signed dated/ undated cheques from the borrowers as security. The cheques would be returned when the Hundies were cancelled. From the impounded Hundies, it was noticed that the assessee Shri Madanlal Singalkar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roached Shri K.N. Mutha with the proposal of loan and has handed over a cheques & hundies of Rs. 6,00,000/- as security to Shri K.N. Mutha, however, the said loan proposal did not materialized. However, the said cheques and hundies remained with Shri K.N. Mutha. The contention of the appellant that he has given duly signed hundies & cheques of Rs. 6,00,000/- to Shri K.N. Mutha without obtaining cash loan of Rs. 6,00,000/- and the same has been remained with Shri K.N. Mutha appears to be improbable and hence cannot be accepted. The appellant has also raised another contention that as either appellant or Shri K.N. Mutha has not made any entry of loan received or loan advanced in their books of accounts, respectively, the provisions o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of S. 269SS of the Act and confirmed by CIT(A) is illegal and without jurisdiction since no violation of S. 269SS has been proved by the Revenue. The penalty be quashed. 2) On the facts and circumstances of the case and in law the Ld. Addl. CIT failed to discharge the burden that was on him as per S. 292C of the Act to prove that any deposit was accepted by the appellant in cash of Rs. 6,00,000/-. The penalty levied being illegal be quashed. 3) On the facts and circumstances of the case and in law and since no assessment order was passed by the A.O. in this case no satisfaction of the A.O. is available regarding violation of the provisions of S. 269SS of the Act to attract penal provisions of S. 271- D of the Act. The p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s no violation of the provisions of section 269SS for which penalty provisions are attracted. He submitted that the assessee had categorically stated that he has not taken any cash loan from Shri Kachrulal Nathmal Mutha nor the same has been recorded in his books of account. Similarly, no such cash loan given to the assessee was recorded in the books of Shri Kachrulal Nathmal Mutha. The penalty has been levied merely on the basis of presumptions and surmises. Further, the assessee in the meantime is no more and has expired. He accordingly submitted that in absence of any direct evidence that the assessee has accepted cash loan from Shri Kachrulal Nathmal Mutha, no penalty u/s.271D is leviable since there is no violation of the provisions of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mal Mutha or in the books of the assessee was also rejected by the CIT(A). 7.1 In our opinion, for imposing penalty u/s.271D there must be some direct evidence to substantiate that the assessee has infact accepted cash loan in violation of the provisions of section 269SS. In the instant case, there is no direct evidence brought on record by the Revenue. The assessee was categorically denying of any such cash loan from Shri Kachrulal Nathmal Mutha. There is nothing on record to suggest that any such statement has been recorded from either of the persons so as to prove that such cash loan has been given or taken. The entire process is on the basis of surmises and presumptions. It is also a fact that the assessee is no more and has expired.....