AO observed that assessee had deposited cash on various dates totalling Rs 7.5 lakhs. As assessee was unable to provide information on the source of cash, AO made addition u/s 68 for unexplained cash credit. Before CIT(A) source of cash was explained and CIT(A) deleted addition. Further , AO imposed penalty u/s 271D, as assessee had contravened s 269SS by taking loan exceeding Rs 20,000. CIT(A) and ITAT upheld the penalty. -501639
1. AO observed that the assessee has deposited cash on various dates aggregating to Rs.7,50,000.
2. Assessee was unable to provide any information for the source of the cash.
3. AO made addition u/s 68 for unexplained cash credit.
4. In the course of appellate proceedings before CIT(A), source of cash was explained and CIT(A) deleted addition.
5. AO imposed penalty u/s 271D, as the assessee had contravened s 269SS by taking loan exceeding Rs.20,000, otherwise than by account payee cheque or draft.
6. CIT(A) upheld the penalty.
On appeal, the ITAT held as under:
7. As the assessee has made contravention of the provisions of Section 269SS of the Act for accepting the loan exceeding Rs.20,000/-, otherwise than by an account payee cheque or account payee bank draft, proceedings u/s 271D need to be initiated.
8. We are, therefore, of the view that the order u/s 271D is not time-barred and is valid.