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3.1 In view of the above, the AO initiated the penalty proceedings u/s 271D of the Act, vide show cause notice dated 16/04/2013. The assessee in compliance to such notice failed to submit any reply before the AO. Therefore, the AO held that the unsecured cash loan received by the assessee is in contravention to the provisions of section 269SS of the Act. Accordingly the AO levied the penalty of Rs. 14,80,000/- under the provision of section 271D of the Act.

3.2. Aggrieved assessee preferred an appeal to the Ld. CIT (A). The assessee before the Ld. CIT (A) submitted that the he has taken cash from his close relatives for the purpose of purchasing the residential property which were duly recorded in books of accounts. The assessee also claimed that their (loan parties) primary source of income is from agricultural activity. Assessee further claimed that if such loans would not have been taken, he would not have been able to purchase such residential property.

Being aggrieved by the order of the Ld. CIT (A) assessee is in appeal before us.

4. The Ld. AR before us filed a paper book running from pages 1 to 66 and submitted that there is no doubt on the genuineness of the loan taken from the relatives.

4.1. The Ld. AR further submitted that the provision of section 269SS was brought under the statue intending to deter the assessee of justifying unaccounted cash found during search/survey. As such the object of the provision of section 269SS was to discourage the assessee to justify their unaccounted money by taking Shailesh Gopalbhai Akbari vs. ACIT Asst.Year - 2010-11 cash entries from different persons. In the case on hand, the genuineness of the transaction was not doubted by the authorities below. Therefore, the penalty cannot be levied u/s 271D of the Act.

Unaccounted income is also brought into the books of account in the form of such loans and deposits, and taxpayers are also able to get confirmatory letter from such persons in support of their explanation.

32.1 With a view to countering this device, which means taxpayers to explain away unaccounted cash or unaccounted deposits, the Finance Act has inserted a new s. 269SS in the IT Act debarring person from taking to accepting, after 30th June, 1984 from any other persons any loan or deposit otherwise than by an account payee cheque or account payee bank draft if the amount of such loan or deposit or the aggregate amount of such loan and deposit is Rs.10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or the aggregate amount of such loan and deposit is Rs.10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), and the amount or the aggregate amount remaining unpaid is Rs.10,000 or more. The prohibition will also apply in cases where the amount of such loan or deposit, together with the aggregate amount remaining unpaid on the date of which such loan or deposit is proposed to be taken is Rs.10,000 or more.'' 6.2 From the above we note that the provision of section 269SS was brought under the statue to discourage the assessee to justify their unaccounted money. However, in the case on hand, there is no allegation that the assessee has introduced unaccounted money in his business. Thus, keeping in view the object of the provision of section 269SS of the Act the cash transaction which is genuine cannot be brought under the net of tax under the provision of section 269SS of the Act.

"6. The expression "any other person" appearing in section 269SS has been interpreted by the two Benches of the Tribunal in two different ways. One view is that the said expression excludes all those persons who are closely connected with the assessee and the other view is to the opposite effect. Both views are possible views. It is well-settled that there are two possible views, the view favourable to the assessee will have to be accepted [Refer CIT v. Madho Pd. Jatia [1976] 105 ITR 179 (SC)]. Therefore, the transactions between closely related persons such as father and son must be held to fall outside the scope of section 269SS."