TaxTMI 
TaxTMI 
2018 (10) TMI 1023
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.... Tax Act (hereinafter called as 'Act'). During the assessment proceedings for the assessment year 2011-12, the Assessing Officer (AO) found that the assessee had received loan of Rs. 5,00,000/- each from Sri N.Siva Sankar and Smt P.Venkata Lakshmi on 28.01.2011 by cash. Since the assessee had received the loans in contravention to the provisions of section 269SS of the Act, the Jt.Commissioner of Income Tax initiated penalty u/s 271D of the Act and issued show cause notice to the assessee posting the case for hearing on 19.10.2015. In response, the assessee submitted it's explanation stating that it has not received the loans in cash but the creditors have deposited the loan amounts directly into the bank account by themselves on 28.02.2011 and a confirmation letter from the banker was also furnished by the AR evidencing the deposit in the bank account and argued that the assessee had accepted the loans in cash due to business exigencies and hence requested to drop the penalty proceedings. The assessee further submitted that the money was urgently needed for the purpose of business to meet the funds to honour the cheques and the loans were also taken from the sister and the nephew....
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.... 96 ITD 210 ii. ITO Vs. Sunil M.Kasliwal (ITAT, Pune-TM) 94 ITD 281 iii. Kasi Consultant Corporation Vs. DCIT(Mad) 311 ITR 419 iv. P.Baskar Vs. CIT(Mad) 340 ITR 560 3. The next contention of the assessee, that the loan was accepted due to business exigencies for payment of funds to M/s Rallis India Ltd., was also examined by the Ld.AO and observed that the assessee had accepted the loan of Rs. 10 lakhs from the creditors on 28.02.2011, whereas the cheque to M/s Rallis India Ltd. was cleared on 04.03.2011 for an amount of Rs. 22,94,453/-. Therefore, viewed that there was no business exigency and there was no reasonable cause in terms of section 273B of the Act, since sufficient time is available to the assessee to accept the loans otherwise than in cash. With regard to the assessee's contention that the transaction between the persons intimately connected was not accepted by the AO, since the transactions were between the firm and the creditors, but not between the partners and their relatives. Therefore, the AO observed that the case laws relied upon by the assessee in the facts and the circumstances of the case are distinguishable and does not help the assessee. Accordingly....
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....re issued and the to M/s Rallis India Ltd. and the payment was due. The cheques were cleared on 04.03.2011 after depositing the loans accepted and there were no funds available to the assessee to meet the cheques.. The AO was of the view that, since the cheque was cleared on 04.03.2011, there was no urgency to accept the loans on 28.02.2011 and held that there was no reasonable cause. The Ld.AR submitted before us that unless there is sufficient balance in the bank account, the assessee cannot honour the cheques. Once the cheque is issued to the creditor it is for the creditor to present the cheque for payment and the assessee is bound to honour the cheaque. Failing which the creditor may not extend the credit or may go on filing the cheque bounce case. In the instant case, the assessee had accepted the loans which were directly paid in the bank account on 28.02.2011 and the cheque issued to M/s Rallis India Ltd. was cleared on 04.03.2011 for an amount of Rs. 22,94,453/-. The AO/JCIT has not given any finding with regard to the availability of sufficient balances in the bank account to meet the cheques issued to Rallis India Ltd., during the intervening period from 28.02.2011 to 04....
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....as submitted the evidence for medical treatment undergone by Sri Jami Appa Rao. The JCIT observed that there was mismatch of dates of medical treatment and the payments as under "4. Mr Jami AppaRao, father of one of the partners was admitted in Sri RamanaMaharshi Hospital, Bhimavaram on 02.10.2010 and incurred an expenditure of Rs. 2,26,000/- and was also readmitted in the hospital on 15.10.2010 and incurred an expenditure of Rs. 1,20,300/-. Whereas the repayment made by the firm to Sri Jami AppaRao father of , one of the partners was on 20.10.2010 and the repayment to Sri Jami Durga Prasad nephew of the managing partner and son of Sri Jami AppaRao was made on 24.10.2010. As per the doctor certificates, Sri Jami AppaRao has already incurred expenditure of Rs. 2,28,000/- before 15.10.2010 and Rs. 1,20,300/- on or after 15.10.2010. There is no exigency for the assessee firm to repay the amount of Rs. 2,26,000/- to Sri Jami Durga Prasad on 24.10.2010 which happened to be Sunday. The amount can be paid by way of cheque on the same day or by way of bank draft on the next day. Further, the payment of Rs. 1,20,282/- was paid in a day other than Sunday in which banks are working." Accor....