2015 (2) TMI 1347

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.... the assessing officer, u/s. 271D of the I.T. Act, 1961 on account of contravention of provisions of section 269SS of the I.T.Act, 1961." 2. The assessee company is engaged in the business of manufacturing and trading of fertilizers. Fertilizers manufactured by the assessee are sold in Satara, Sanghli and Kolhapur Districts of Maharashtra to farmers and various farmers cooperative societies. The sales are done by salesman appointed by the company district wise. According to the submissions made by the assessee before the AO, for the purpose of running the business, the assessee company was accepting loans from various parties due to sudden requirement of the business, which include relatives of one of the salesman. In respect of assessme....

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....submitted that according to the exceptions laid down in the section, where the loan is accepted and repaid to agriculturist, who did not have bank account no penalty should be levied as the default would be mainly technical in the nature. Thus, it was pleaded before AO that no penalty should be levied. However, AO did not accept such submission of the assessee and levied the penalty. Ld. CIT(A) has also confirmed the same. Aggrieved by this, assessee filed aforementioned appeals. 3. Apart from reiterating the contentions raised before AO and Ld. CIT(A), Ld. AR of the assessee has placed reliance on the decision of Hon'ble Madras High Court in the case of CIT vs. Balaji Traders, 303 ITR 312 (Mad), in which it has been held that where mone....

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....of section 273B no penalty could be imposed. 4. On the other hand, Ld. DR relied upon the order passed by AO and Ld. CIT(A). 5. We have heard both the parties and their contentions have carefully been considered. In the present case, in assessment year 2003-04 cash loans were obtained and in A.Y 2004-05 they were repaid. According to the plea raised before AO as well as Ld. CIT(A), the persons who have advanced these loans to the assessee are relatives of a salesman who reside in a village and were having no bank account. Such contention of the assessee has not been discarded or disproved. It is also not mentioned in the penalty order that the aforementioned amount taken by the assessee in violation of section 269SS and repayment ther....