Sh. Prem Singh Saini vs. Addl. CIT

Parties Involved

Facts Summary

The assessee, Sh. Prem Singh Saini, received a total of Rs. 8,47,900/- from 10 different persons in cash. These persons used the assessee's bank account to prepare demand drafts for applying for liquor licenses. Since the applications were not accepted, the demand drafts were encashed, and the money was returned to the respective persons in cash. The Additional Commissioner of Income Tax levied penalties under sections 271D and 271E of the Income Tax Act for accepting the deposits in cash, which contravened section 269SS of the Act. The assessee appealed against this penalty order, arguing that the money was not a loan or deposit but was received in trust for the purpose of making demand drafts. The CIT(A) upheld the penalty, finding the assessee's explanation unsatisfactory.…

Legal Issues

• 1. Whether the penalty levied under section 271D of the Income Tax Act is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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