INCOME TAX ACT, 1961

Section 271D

Penalty under section 271D - Contravention of section 269SS - Imposition of -

AO alleged that assessee had received loans from sundry creditors in contravention of provisions of section 269SS and was called upon to appear and explain as to why penalty under section 271D should not be levied. Assessee contended that amounts were received by way of cash loans from friends who were farmers. CIT(A) called from a remand report during which assessee produced the confirmations from the so-called friends of having made such cash loans and that such amounts were utilized by him for making purchases of machinery/raw materials in gray market. Held: Assessee did not bring on record the financial position, the details of purchase orders required to be executed within time and most significantly did not co-relate the purchases made from such cash loans. Tribunal recorded that assessee had not given the dates on which he accepted the loans and dates of purchase of raw material in the gray market. Assessee relied all along on mere oral assertions of urgent requirement of funds without producing any material to establish such assertion. Therefore, penalty under section 271D was rightly imposed.

Followed:CIT v. M/S. Calcutta Knitwears (2014) 362 ITR 673 (SC) : 2014 TaxPub(DT) 1547 (SC) Asst. Director of Inspection (Investigation) & Kumari Ab Shanthi & Chamundi Granites (P) Ltd. v. DCIT & Anr. (2002) 255 ITR 258 (SC) : 2002 TaxPub(DT) 1375 (SC)Relied:CIT v. Smt. Dimpal Yadav (2015) 61 taxmann.com 219 (Allahabad) : 2015 TaxPub(DT) 3493 (All-HC) Omec Engineers v. CIT (2007) 294 ITR 599 (Jharkhand) : 2007 TaxPub(DT) 1505 (Jhar-HC) CIT v. Saini Medical Store (2005) 276 ITR 79 (P&H) : 2005 TaxPub(DT) 1444 (P&H-HC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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