DCIT CEN CIR 8(4), MUMBAI vs. RAJ DOSHI EXPORTS P.LTD, MUMBAI

ORDER

PER N.K. PRADHAN, AM

filed by the Revenue reads as under:- On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the penalty of Rs.55,00,000/- levied u/s 271D of the Income Tax Act, 1961 holding that the provision of section 269SS are not applicable without appreciating the facts that during the course of assessment proceedings as well as penalty proceedings, the assessee was given an opportunity but he failed to explain the notings on Hundies/promissory notes and no reasonable cause is explained for accepting loan by cash.

3. Briefly stated, the facts of the case are that a search and seizure action u/s 132 was carried out in the business premises of the assessee M/s Raj Doshi Exports Pvt. Ltd. on 26.05.2011. The Assessing Officer (AO) noted that during the course of search one loose paper file was seized (Annexure A-1 to the panchnama). As per page No. 16 to 22 of this loose paper file, the assessee had accepted loans of Rs.55,00,000/- by Hundies during the FY 2011-12 relevant to the AY 2012-13. As the same was in contravention to provision of section 269SS, the Additional CIT, Central Range -10, Mumbai levied a penalty of Rs.55,00,000/- u/s 271D of the Act.

4. Aggrieved by the penalty order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) found that (i) the hundis were not filled up properly, therefore they have little evidentiary value, (ii) the hundis were found in the premises of the assessee, therefore, had any loan been actually given to the assessee, the creditor would have definitely insisted on the hundi being handed over to him (creditor) by the assessee and in