No Penalty U/s. 271D for receipt of Share application money in cash

The Assessing officer initiated proceedings for alleged violation of section 269SS of the Act in as much as the assessee accepted share application money being Rs. 20,000/- in cash. Thereafter, penalty was imposed. On appeal, CIT(A) upheld the stand of the assessee that the amount received was not loan or deposit and no interest was payable. It was further held that transaction was bonafide and default was of technical nature and in any case, the amount was received from public and not from directors or share holders. High Court upheld the view of CIT(A).