Smt.B.Madhavi, Hyderabad V. Joint Commissioner of Income Tax, Central Circle-1, Hyderabad

ITA 365/HYD/2014

• Counselvise Citation: 36522514 RSA 2014
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Search and seizure; Reasonable cause; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 365/HYD/2014 ASSESSMENT YEAR: 2010-11 SMT. B. MADHAVI, HYDERABAD PAN ABEP 6039M JT. COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE 1, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI V. SIVA KUMAR REVENUE BY SHRI RAJAT MITRA DATE OF HEARING 04-12-2014 DATE OF PRONOUNCEMENT 12-12-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 9/12/2013 OF LD. CIT(A)-I, HYDERABAD CONFIRMING THE PENALTY IMPOSED U/S 271D OF THE ACT, FOR THE ASSESSMENT YEAR 2010- 11. 2. BRIEFLY THE FACTS ARE, ASSESSEE AN INDIVIDUAL IS A DOCTOR BY PROFESSION. ASSESSEE HAS SET UP A NURSING HOME IN T HE NAME AND STYLE OF MAMATHA HOSPITAL. FOR THE AY UNDER DISPUTE , ASSESSEE FILED HER RETURN OF INCOME ON 02/12/2010 DECLARING TOTAL INCOME OF RS. 66,98,640. A SEARCH AND SEIZURE OPERATION WAS CONDU CTED IN CASE OF PRATIMA EDUCATIONAL SOCIETY AS WELL AS TRUSTEES AN D ALL RELATED PERSONS ON 10/09/2009. ASSESSEE BEING ONE OF THE RE LATED PERSONS WITHIN THE GROUP AND SINCE CERTAIN INCRIMINATING MA TERIAL BELONGING TO ASSESSEE WERE ALLEGEDLY FOUND AND SEIZED FROM THE O FFICE OF PRATIMA EDUCATIONAL SOCIETY, A NOTICE U/S 153C OF THE ACT W AS ISSUED TO 2 ITA NO. 365/HYD/2014 SMT. B. MADHAVI ASSESSEE CALLING UPON HER TO SUBMIT HER RETURNS OF INCOME FOR AY 2004-05 TO 2009-10. IN COURSE OF THE ASSESSMENT PRO CEEDING FOR THE IMPUGNED AY, AO FOUND THAT ASSESSEE HAD OBTAINED UN SECURED LOAN FROM ONE SHRI B. SRINIVASA RAO, I.E. A SUM OF RS. 5 LAKH WAS RECEIVED ON 03/12/2009 AND ANOTHER SUM OF RS. 5 LAKHS WAS RE CEIVED ON 04/03/10. SINCE THE ENTIRE LOAN OF RS. 10 LAKH WAS RECEIVED IN CASH, AO WAS OF THE VIEW THAT PROVISIONS OF SECTION 269SS HAVE BEEN VIOLATED THEREBY ATTRACTING PENAL PROVISIONS OF SEC TION 271D. ACCORDINGLY, AO REFERRED THE ISSUE TO THE ADDL. CIT , CENTRAL, RANGE 1, HYDERABAD FOR INITIATION OF PROCEEDING AND PENAL TY U/S 271D. AS A CONSEQUENCE THEREOF, NOTICE WAS ISSUED TO ASSESSEE DIRECTING HER TO SHOW CAUSE AS TO WHY PENALTY U/S 271D SHALL NOT BE IMPOSED FOR VIOLATING PROVISIONS OF SECTION 269SS. 3. IN COURSE OF PROCEEDING, ASSESSEE SUBMITTED THAT BEING THE PROPRIETRIX OF THE NURSING HOME, ASSESSEE WAS MANA GING THE HOSPITAL SINGLE HANDEDLY WHICH CALLS FOR DEVOTING FULL TIME AND, THUS, OUT OF PRESSURE SHE WAS NOT ABLE TO ORGANIZE THE CASH PAY MENTS ON HER OWN TO CIVIL CONTRACT WORKERS, WHO NEEDED TO BE PAID ON WEEKLY BASIS AND SOME ON A DAILY BASIS ALSO WHEREAS HOSPITAL PAYMENT S WILL BE GENERALLY MONTHLY. IT WAS FURTHER SUBMITTED THAT RU NNING OF A NURSING HOME IS LABOUR INTENSIVE AND STRESSFUL. DURING THE RELEVANT PREVIOUS YEAR IN THE OFF SEASON MONTHS OF DECEMBER AND MARCH , SOME REPAIRS AND RENEWALS WERE UNDERTAKEN TO THE NURSING HOME BU ILDING. IN ORDER TO MAKE PAYMENTS TO LABOURERS, ON TWO OCCASIONS, AS SESSEE HAD TO INCUR CASH LOAN OF RS. 10 LAKHS I.E. RS. 5 LAKH EAC H ON TWO OCCASIONS TO MAKE LABOUR PAYMENTS FROM SHRI B. SRINIVASA RAO, WHO HAPPENS TO BE ASSESSEES HUSBANDS OWN BROTHER AND WHOSE FAMIL Y STAY VERY NEARBY TO HER HOUSE. IT WAS THUS SUBMITTED THAT ONL Y FOR MEETING BUSINESS EXIGENCY AND DUE TO URGENT NEED CASH LOAN WAS TAKEN. IT WAS SUBMITTED THAT LABOURERS DOING REPAIR AND MAINT ENANCE WORK DEMAND THEIR PAYMENTS ONCE THEIR WORK IS COMPLETED AND THEY WILL USUALLY NOT WAIT FOR PAYMENT. IT WAS SUBMITTED THA T ON COMPLETION OF 3 ITA NO. 365/HYD/2014 SMT. B. MADHAVI WORK, SETTLEMENT OF PAYMENT IN THESE TYPES OF WORKS LIKE PAINTING ETC. USUALLY TAKES PLACE TILL LATE EVENING AND BY THE T IME THEY COMPLETE THEIR WORK, THE STAFF IN THE ACCOUNTS DEPARTMENT WI LL LEAVE. THEREFORE, CONSIDERING THE FACT THAT NO CASH WAS AVAILABLE ON THOSE DATES, ASSESSEE HAD TO TAKE CASH LOANS FROM SHRI B. SRINIV ASA RAO FOR PAYING THEM TO THE LABOURERS. IT WAS SUBMITTED THAT TDS AS APPLICABLE ON PAYMENTS WAS MADE AND REMITTED TO THE CENTRAL GO VT. ACCOUNT. FURTHER, ASSESSEE SUBMITTED THAT SHRI B. SRINIVASA RAO MANAGES SOME CONTRACTS AND IS INTO BUSINESS FOR QUITE SOME TIME AND HE IS ALSO ASSESSED TO INCOME-TAX, THEREFORE, THERE CANNO T BE ANY DOUBT WITH REGARD TO THE LOAN TRANSACTIONS BETWEEN TWO AS SESSEES OF THE INCOME TAX DEPARTMENT. EXPLAINING THE NECESSITY FOR AVAILING CASH LOAN, IT WAS SUBMITTED THAT AS IT IS NOT POSSIBLE F OR ANY BUSINESS PERSON TO PREDICT THE EXACT REQUIREMENT OF MONEY FO R DISCHARGING ITS OBLIGATIONS CONNECTED TO THE BUSINESS, SOME TIMES IT IS NOT POSSIBLE TO KEEP THE EXACT AMOUNT OF CASH ON HAND. THERE MAY NOT ALSO BE TIME TO ANTICIPATE EXACT DATE ON WHICH IT WILL BE REQUIRED TO DISCHARGE SUCH OBLIGATION. THEREFORE, THE ENTIRE FACTS AND CI RCUMSTANCES OF THE CASE HAVE TO BE CONSIDERED AND ULTIMATELY A JUDICIO US VIEW HAS TO BE TAKEN. IT WAS SUBMITTED THAT LOAN WAS TAKEN BECAUSE SUFFICIENT MONEY OR CASH BALANCE WAS NOT AVAILABLE WITH ASSESSEE AT THAT POINT OF TIME AS LABOURERS WERE TO BE PAID URGENTLY ON THOSE DAY S AND LABOURERS WILL NOT ACCEPT CHEQUES. THUS, IT WAS SUBMITTED THA T AS THERE WAS A REASONABLE CAUSE FOR AVAILING CASH LOAN PENALTY SHO ULD NOT BE IMPOSED. IN SUPPORT OF SUCH PLEA, ASSESSEE ALSO REL IED UPON CERTAIN DECISIONS OF THE TRIBUNAL. 4. ADDL. CIT, AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE IN THE LIGHT OF FACTS AND MATERIALS ON RECORD, WAS NOT CON VINCED WITH THE CAUSE SHOWN BY ASSESSEE FOR AVAILING CASH LOAN. ADD L. CIT OBSERVED THAT THE GENUINENESS OF THE TRANSACTION AND THE IDE NTIFICATION OF THE PARTIES WILL HAVE NOTHING TO DO WITH THE CONTRAVENT ION U/S 269SS FOR WHICH PENALTY IS LEVIABLE. HE OBSERVED THAT THE AMB IT OF SECTION 4 ITA NO. 365/HYD/2014 SMT. B. MADHAVI 269SS IS WIDE ENOUGH TO COVER GENUINE TRANSACTIONS WHERE PARTIES ARE IDENTIFIABLE SO LONG AS THERE IS NO REASONABLE CAUSE FOR ACCEPTING CASH LOAN. IT WAS OBSERVED BY ADDL. CIT THAT WHEN T HERE IS SPECIFIC PROVISION FOR NOT ACCEPTING FROM ANY OTHER PERSON A NY LOAN OR DEPOSIT OTHERWISE THAN BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUT PAYEE BANK DRAFT IF THE AMOUNT OF SUCH LOAN OR DEPOSIT OR AGGREGATE LOAN OF SUCH LOAN OR DEPOSIT EXCEEDS TO RS. 20,000, PROVISI ON HAS TO BE INTERPRETED STRICTLY UNLESS EXCEPTIONS PROVIDED TOW ARDS PAYMENTS TO CERTAIN PERSONS AS PER FIRST AND SECOND PROVISO TO SECTION 269SS APPLY. THUS, GENUINE AND BONAFIDE TRANSACTIONS ARE NOT TAKEN OUT OF SWEEP OF SECTION 269SS. IN SUPPORT OF SUCH VIEW, HE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF ATTAR SINGH GURMUKH VS. ITO, 191 ITR 667 (SC). IT WAS OBSERVED BY ADDL. CIT, WHEN THE PURPOSE FOR INTRODUCING SECTION 269SS IS TO PENALIZ E AN ASSESSEE FOR A TECHNICAL OFFICE, EVEN IN A CASE WHERE PARTIES AR E IDENTIFIABLE SO LONG AS THE CASH LOAN/DEPOSIT DOES NOT SATISFY THE EXCEPTIONS PROVIDED IN THE SECTION, PENALTY IS IMPOSABLE FOR T ECHNICAL OFFENCE OF ACCEPTING THE DEPOSIT IN CASH. HE OBSERVED THAT IF ASSESSEES CONTENTION IS ACCEPTED, THE SECTION ITSELF WOULD BE RENDERED NUGATORY OR OTIOSE BECAUSE SECTION 269SS/271D SEEKS TO LEVY PENALTY MAINLY ON TECHNICAL OFFENCE. HE CONCLUDED THAT AS LANGUAGE OF SECTION 269SS IS UNAMBIGUOUS, ASSESSEES EXPLANATION THAT GENUINE TRANSACTION CANNOT BE CONSIDERED FOR IMPOSITION OF PENALTY, IS NOT ACCEPTABLE. SO FAR AS NECESSITY/REASONABLENESS OF ACCEPTING THE CA SH LOAN, ADDL. CIT ALSO FOUND THE EXPLANATION OF ASSESSEE TO BE UNACCE PTABLE. ADDL. CIT NOTED THAT THE ACCOUNT BOOKS MAINTAINED BY ASSESSEE DURING THE RELEVANT PERIOD INDICATED THAT ASSESSEE WAS HAVING CASH BALANCE OF RS. 5,16,837.81 ON 03/12/2009, WHEN SHE AVAILED FIR ST CASH LOAN OF RS. 5 LAKHS. SIMILARLY, THE CLOSING BALANCE ON 03/1 2/2012 WAS RS. 5,36,675.81 WITHOUT TAKING INTO ACCOUNT THE CASH BO RROWAL OF RS. 5 LAKH FROM SHRI B. SRINIVASA RAO. HE FURTHER OBSERVE D THAT THE ENTRIES IN THE CASH BOOK IN THE SUBSEQUENT DATES ALSO SHOWE D THAT THERE WAS NO NEED TO BORROW CASH FROM SHRI B. SRINIVASA RAO A S CASH BALANCE 5 ITA NO. 365/HYD/2014 SMT. B. MADHAVI ON ALL SUBSEQUENT DATES WAS ABOVE RS. 5 LAKHS UP TO 03/12/2009. THEREFORE, ASSESSEES PLEA THAT CASH LOAN WAS AVAIL ED FOR BUSINESS EXIGENCY IS NOT BORN OUT FROM RECORD. ADDL. CIT FUR THER NOTED THAT WHEN BOTH ASSESSEE AND LENDER SHRI B. SRINIVASA RAO ARE HAVING BANK ACCOUNT AND BOTH RESIDING IN HYDERABAD, THERE IS NO NECESSITY OF BORROWING IN CASH ON ACCOUNT BUSINESS EXIGENCY. ADDL. CIT FINALLY CONCLUDED THAT PENALTY U/S 271D OF THE ACT IS LEVIA BLE FOR THE FOLLOWING REASONS: A) THERE IS NO DISPUTE THAT THE ASSESSEE HAD ACCE PTED THE LOAN. B) BOTH THE ASSESSEE AND THE LENDER HAVE THE BANK A CCOUNTS AND ALL OF THEM RESIDE IN THE METROPOLITAN CITY OF HYDERABAD WHERE A NUMBER OF BANKS AND ATMS EXIST. C) NO CAUSE WAS SHOWN AS TO WHY THE AMOUNT COULD NO T BE RECEIVED BY CROSSED CHEQUE OR CROSSED DEMAND DRAFT. D) THAT EVERY PERSON IS OBLIGED TO ACT NOT ONLY IN ACCORDANCE WITH LAW OF THE LAND BUT IN SUCH A MANNER THAT NO P ROVISIONS OF LAW ARE VIOLATED. E) THE ASSESSEE FAILED TO PRODUCE ADEQUATE EVIDENCE TO SHOW REASONABLE CAUSE FOR ACCEPTING THE SAID LOANS. ON THE BASIS OF SUCH CONCLUSION, ORDER WAS PASSED O N 29/06/12, IMPOSING PENALTY OF RS. 10 LAKHS U/S 271D. BEING AG GRIEVED OF THE PENALTY ORDER PASSED, ASSESSEE PREFERRED APPEAL BEF ORE LD. CIT(A). 5. BEFORE LD. CIT(A) ALSO ASSESSEE ADVANCED SIMILAR ARGUMENTS AS WAS ADVANCED IN COURSE OF PENALTY PROCEEDINGS. LD. CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF ASSESSEE A ND ULTIMATELY UPHELD THE ORDER IMPOSING PENALTY BY ACCEPTING THE REASONING OF AO. EVEN FACTUALLY, LD. CIT(A) FOUND THE CLAIM OF BUSIN ESS EXIGENCY NOT ACCEPTABLE. SHE NOTED THAT THE BANK ACCOUNT OF MAMA TA HOSPITAL, PROPRIETARY CONCERN OF ASSESSEE, WHEN EXAMINED ALON G WITH LEDGER ACCOUNT OF SHRI B. SRINIVASA RAO IT WAS FOUND THAT NEITHER AT THE ASSESSMENT STAGE NOR DURING THE APPEAL PROCEEDING, ASSESSEE HAS 6 ITA NO. 365/HYD/2014 SMT. B. MADHAVI FILED ANY CONFIRMATION LETTER FROM SHRI B. SRINIVAS A RAO, RATHER SHE HAS ONLY FILED DETAILS FROM HER BOOKS OF ACCOUNT, W HICH CAN BE CONSIDERED AS ONLY SELF-SERVING STATEMENT WITHOUT B EING CONFIRMED BY THE THIRD PARTY. SHE OBSERVED THAT BANK STATEMENT S HOWS ONLY THE TRANSFER OF THE AMOUNT OF RS. 5 LAKH IN THE SUBSEQU ENT YEAR AND NOT BY ANY CHEQUE OR DRAFT WHICH ONLY SUPPORTS THE ARGU MENT OF AO THAT WHEN BOTH ASSESSEE AND THE LENDER HAVE BANK ACCOUNT IN THE SAME BANK, THERE IS NO REASON TO ACCEPT THE LOAN OF RS. 5 LAKH IN CASH. SHE NOTED THAT EVEN ASSESSEE COULD NOT ESTABLISH THE FA CT THAT THE CASH LOAN CLAIMED TO HAVE BEEN RECEIVED TOWARDS MEETING REPAIRS AND RENEWALS OF THE HOSPITAL BUILDING HAS BEEN SPENT FO R THE INTENDED PURPOSE WITH ANY DOCUMENTARY EVIDENCE LIKE BILLS, V OUCHERS, OR CONFIRMATIONS FROM MASONS ETC. BY OBSERVING THAT TH E EXPLANATION SUBMITTED BY ASSESSEE IS VERY GENERAL IN NATURE AND HER ATTEMPT TO SHOW THAT THERE WAS A REASONABLE CAUSE IN ACCEPTING CASH LOAN IN VIOLATION OF THE PROVISIONS OF SECTION 269SS IS UNA CCEPTABLE IN ABSENCE OF ANY SUPPORTING EVIDENCE. LD. CIT(A) CONF IRMED PENALTY OF RS. 10 LAKHS LEVIED U/S 271D OF THE ACT. 6. LD. AR MORE OR LESS REITERATED THE SUBMISSIONS M ADE BEFORE THE DEPARTMENTAL AUTHORITIES. HE RELIED ON THE FOLLOWIN G DECISIONS: 1. RAJENDRA SURYAVANSHI VS. ACIT, 20 TAXMANN.COM 35 8 (PUNE) 2. CIT VS. PARMA NAND, 180 CTR 489 (DEL.) 3. CIT VS. BHAGVATI PRASAD BAJORIS(HUF) 263 ITR 487 (GAU.) 4. CIT VS. MANOJ LALWANI, 260 ITR 590 (RAJ.) 7. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS PASSED BY THE REVENUE AUTHORITIES. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. WE HAVE ALSO EXAMINED THE DECISIONS RELIED UPON BY LD. AR. UNDISPUTEDLY, ASSESSEE HAS OBTAINED CASH LOAN OF RS . 5 LAKHS EACH ON TWO OCCASIONS I.E. ON 03/12/09 AND 04/03/10. THE REFORE, THERE 7 ITA NO. 365/HYD/2014 SMT. B. MADHAVI CANNOT BE ANY DOUBT WITH REGARD TO THE FACT THAT AS SESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT , THEREBY ATTRACTING PENAL PROVISIONS CONTAINED U/S 271D. IT IS THE CLAI M OF ASSESSEE BEFORE THE DEPARTMENTAL AUTHORITIES THAT OBTAINING OF CASH LOANS IS FOR A REASONABLE CAUSE BECAUSE ON THE DATES WHEN CASH L OANS WERE AVAILED, ASSESSEE WAS NOT HAVING SUFFICIENT CASH BA LANCE TO DISCHARGE ITS LIABILITY ON ACCOUNT OF LABOUR PAYMENT, WHICH I S URGENT AND IMMEDIATE IN NATURE. IT HAS BEEN FURTHER CONTENDED BY ASSESSEE THAT AS AO HAS NOT DOUBTED GENUINENESS OF THE TRANSACTIO N, PENALTY SHOULD NOT HAVE BEEN IMPOSED. ON PLAIN READING OF P ROVISIONS CONTAINED U/S 269SS, IT IS CLEAR, THE ISSUE WHETHER THE TRANSACTION IS GENUINE OR NOT IS NOT AT ALL RELEVANT. THE LANGUAGE EMPLOYED IN THE SECTION IS PLAIN AND SIMPLE AND THERE IS NO AMBIGUI TY IN THE SAME. WHEN ANY PERSON OBTAINS A LOAN ABOVE RS. 20,000 FRO M ANOTHER PERSON NOT BY WAY OF CROSSED-CHEQUE OR DEMAND DRAFT , THEN, THERE WILL BE A VIOLATION OF THE PROVISIONS OF SECTION 269SS. WHEN THE PROVISION DOES NOT MAKE ANY DISTINCTION WHETHER A TRANSACTION IS GENUI NE OR NOT, IT CANNOT BE READ INTO THE STATUTORY PROVISION . MOREOVER, IF THE TRANSACTION WOULD NOT HAVE BEEN GENUINE IN THE OPIN ION OF AO, THEN, THE ENTIRE LOAN WOULD HAVE BEEN ADDED BY AO. ONLY B ECAUSE HE ACCEPTED THE TRANSACTION TO BE GENUINE, THE PROVISI ONS OF SECTION 269SS IS ATTRACTED. IN THE AFORESAID VIEW OF THE MA TTER, WE CANNOT ACCEPT ASSESSEES PLEA THAT SINCE THE TRANSACTION I S GENUINE, PENALTY CANNOT BE IMPOSED U/S 271D. 9. NOW COMING TO THE EXPLANATION OF ASSESSEE THAT T HERE IS A REASONABLE CAUSE IN ACCEPTING CASH LOANS ON THE CON CERNED DATES, IT IS TO BE NOTED THAT AO IN THE PENALTY ORDER HAS CLE ARLY MENTIONED THAT ON 03/12/09, WHEN ASSESSEE AVAILED CASH LOAN OF RS. 5 LAKHS FROM SHRI B. SRINIVASA RAO, THERE WAS A CASH BALANCE OF RS. 5,16,837.89 IN THE CASH BOOK OF ASSESSEE. ON PERUSAL OF CASH BOOK EXTRACT OF 03/12/09, SUBMITTED BY ASSESSEE, SUCH FINDING OF AO IS FOUND TO BE CORRECT THEREFORE, ASSESSEES CLAIM THAT IN ABSENCE OF SUFFICIENT 8 ITA NO. 365/HYD/2014 SMT. B. MADHAVI FUNDS, ASSESSEE HAD AVAILED CASH LOAN OF RS. 5 LAKH , IN OUR VIEW IS NOT ACCEPTABLE. HOWEVER, SO FAR AS THE OTHER LOAN O F RS. 5 LAKH OBTAINED ON 04/03/10, ON PERUSAL OF CASH BOOK EXTRA CT OF 04/03/10, IT IS TO BE NOTED THAT THE CLOSING CASH BALANCE AS ON 04/03/10 WAS RS. 1,66,597, THEREFORE, ASSESSEES EXPLANATION THAT AV AILING OF CASH LOAN OF RS. 5 LAKH FOR THE PURPOSE OF MEETING BUSINESS E XIGENCY ON ACCOUNT OF PAYMENTS TO BE MADE TO LABOURERS ETC., IS ACCEPTABLE. HOWEVER, REGARD BEING HAD TO THE FACT THAT THERE W AS SUFFICIENT CASH BALANCE ON 03/12/09 TO MEET THE BUSINESS EXIGENCY, IF ANY, IN OUR VIEW, THERE WAS NO NEED TO AVAIL CASH LOAN ON 03/12 /09. THEREFORE, ASSESSEE, ACCORDING TO US, HAS FAILED TO REASONABLY EXPLAIN AVAILING OF CASH LOAN TO THE EXTENT OF RS. 5 LAKH ON 03/12/0 9. ACCORDINGLY, WE ARE OF THE VIEW THAT PENALTY TO THE EXTENT OF RS. 5 LAKH FOR AVAILING CASH LOAN OF RS. 5 LAKH ON 03/12/09 HAS TO BE SUSTA INED. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE DIRECT AO TO REDUCE PENALTY IMPOSED U/S 271D TO A SUM OF RS. 5,00,000. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. PRONOUNCED IN THE OPEN COURT ON 12/12/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 12 TH DECEMBER, 2014 KV COPY TO:- 1) SMT. B. MADHAVI, PLOT NO. 27, MAMATHA HOSPITAL, BHAGYANAGAR COLONY, KUKATPALLY, HYDERABAD 2) JCIT, CENTRAL CIRCLE 1, AAYAKAR BHAVAN, BASHEE RBAGH, HYDERABAD 500 004 3) CIT(A)-I, HYDERABAD 4) CIT(CENTRAL) 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.