Section 269SS:Cash loan of above Rs. 20,000 taken to meet immediate requirement of business won’t attract penalty

[2015] 56 taxmann.com 439 (Gujarat)

HIGH COURT OF GUJARAT

Commissioner of Income-tax

v.

Shreenathji Corpn

Penalty under section 271D could not be levied when assessee sufficiently process that loan was taken in excess of Rs. 20,000 to meet urgent and immediate requirement of Business

Section 269SS, read with sections 273B and 271D, of the Income-tax Act, 1961 - Deposits - Mode of taking/accepting (Business need)- Assessee carries on business of construction of building and in course of such business large amount of labour charges and payments for raw material purchased from unorganized trading sectors and bricks etc. are required to be made after banking hours - If their demand for cash payment was not met they would cancel contract work and refused to complete work and would also prevent other contractors from undertaking work till their dues were settled - Whether since loan/deposits was taken in excess of Rs. 20,000 to meet urgent and immediate requirements of business, no penalty could be imposed - Held, yes [Para 5] [In favour of assessee]