2026 (3) TMI 706

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....er of the learned Assessing Officer is erroneous both on facts and in law. * That the penalty under Section 271D is not maintainable as the appellant accepted loans in cash from agriculturists who have agricultural income only and are covered under the exception as per proviso to Section 269SS. * That sufficient evidence was filed establishing the identity and agricultural income source of the lenders, which was not duly considered. * That the penalty levied is contrary to settled judicial principles laid down in the following decisions: * CIT v. Panchsheel Owners Associations (2017) 395 ITR 380 (Guj. HC) Penalty deleted where cash loan was genuine and reasonable cause for acceptance proved. * Na....

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..... 9 lakhs taken by the assessee in violation of sec.269SS of the Act. However, we find from the assessment order passed u/sec.147 r.w.s.143(3) that the Assessing Officer has not accepted the source of cash deposit in the bank account as cash loan of Rs. 9 lakhs claimed by the assessee and made the addition on account of the cash deposit of Rs. 8,00,888/- in the bank account of the assessee in Para nos.4.6.2 as under: "4.6.2. It is seen from the records available that the assessee has made time deposits amounting to Rs. 8,00,888/-in Andhra Bank during F.Y. 2014-15 relevant to the A.Y. 2015-16. In this regard the assessee was requested during the E-assessment proceedings to furnish the information/documents/explanation regarding the ....

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....aimed to have been taken by the assessee. However, the Assessing Officer has rejected this claim of the assessee as not substantiated and accordingly, addition of Rs. 8,00,888/- was made on account of unexplained investment u/sec.69 of the Act. Despite the rejection of the claim of the loan of Rs. 9 lakhs in cash, the Assessing Officer also recorded the satisfaction for initiation of the penalty proceedings u/sec.271D of the Act, which in our view is contradictory as on one hand the Assessing Officer has not accepted the loan of Rs. 9 lakhs as claimed by the assessee and on the other hand, the Assessing Officer has initiated the penalty u/sec.271D of the Act for the said loan taken in cash by treating the same as violation of sec.269SS of t....