If assessee show that there was reasonable cause for taking money in cash, and amount did not also represent unaccounted money either of assessee or of persons from whom they were taken, normally it is sufficient to hold that penalty under section 271D is not justified

IN THE ITAT HYDERABAD BENCH ‘A’

Andhra Bombay Carriers v. Additional Commissioner of Income-tax

IT APPEAL NO. 425 (HYD.) of 2009

[ASSESSMENT YEAR 2003-04]

MARCH 31, 2011

 ORDER

Chandra Poojari, Accountant Member.- This appeal by the assessee is directed against the order of the CIT(A), Vijayawada, dated 3 1-12-2008 and pertains to assessment year 2003-04.

2. The grievance of the assessee in this appeal is with regard to confirmation of penalty of Rs. 31,56,490 by the CIT(A).

3. Brief facts of the case are that the assessee is a partnership firm and engaged in the business of transport. This partnership firm filed its return of income for assessment year 2003-04 on 25-11-2003 admitting total income at Rs. 1,34,700. The assessee also filed, along with this return, the audited Profit and Loss A/c., Balance Sheet and Tax Audit Report under section 44AB of the Income-tax Act, 1961 since the total turnover was of Rs. 10,29,35,775. The Assessing Officer completed the assessment under section 143(3) on 27-3-2006 assessing the total income at Rs. 9,80,150. During the year, assessee took temporary loans amounting to Rs. 39,28,236 and assessee was asked to file their postal addresses of the lenders. The required information was filed in respect of 82 persons covering loans amounting to Rs. 31,56,490. The Assessing Officer held balance temporary loans amounting to Rs. 7,7 1,746 as unexplained. The Assessing Officer also initiated penalty proceedings for violation of section 269SS of the Act.