The income tax Appellate Tribunal (ITAT), Delhi bench ruled that the penalty under sections 271D and 271E of the Income Tax Act, 1961 would not be responsible for receipt of cash loans via family members to meet business needs.
The taxpayer is involved as a transporter and does not maintain the regular books of account. The assessment which has been made estimations, remembering the transportation receipts that the taxpayer earns which indeed consists of some impugned entries towards cash receipts through the loan.
The taxpayer mentioned that the cash has been obtained through the method of a temporary loan from family members to arrive at the needs of the business.
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The Tribunal bench engaged with Shri Saktijit Dey, Judicial Member & Shri Pradip Kumar Kedia an accountant member sees that the business needs do not been refused by the revenue.
In the tribunal, the turnover receipts mentioned by the taxpayer at Rs 39,61,195 were enhanced to Rs.1,33,67,162 for the purpose of estimating the income relied on these impounded records. Thus, the imposition of the penalty separately for these receipts by the method of loan is not clarified.
The taxpayer has shown that the money was obtained from the family members to meet the need of the business. This statement is plausible said Tribunal.
Answering him the tribunal sees that the revocation of sections 269SS and 269T for receipt/repayment of cash attributable to business exigencies is a mere technical or venial breach.
The taxpayer has mentioned the existence of a reasonable cause in accepting or repayment of the cash to meet the quicker business needs. Mitigating the condition exists to exonerate the taxpayer from the recourse of penalty under Sections 271D and 271E of the Act. We accordingly set aside the order of the CIT(A) and revoke the penalty imposed beneath Sections 271D and 271E of the Act by the competent authority, the Tribunal mentioned.
