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No Penalty If Cash above Rs 20000 received from Brother and Father due to Business Exigencies

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that if cash was received from brother and father of the assessee to meet business exigencies, such transactions cannot be treated as the violation of section 269SS of the Income Tax Act, 1961. 

The bench comprising Rajpal Yadav (JM) and N K Billaiya (AM) clarified that in such cases, the penalty under sections 271D and 271E of the Income Tax Act cannot be levied. In the instant case, the assessee, Girishkumar Popatlal Patel received Rs. 1.55 lacs from brother and father in cash and repaid the same in cash. The assessee contended that he is in the business of retailed trade and therefore whenever there is an urgent need for money, the same is taken from the brother and the father. 

The counsel appeared on behalf of the assessee contended that the legislative intent in prohibiting the acceptance and repayment of money in cash over and above Rs. 20,000/- is to check the unaccounted money and not to hit the genuine business need.

Article referred: http://www.taxscan.in/penalty-cash-business-exigencies-income-tax-tribunal/21550/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29

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