JUDGMENT 1. This appeal is by the Revenue challenging the order passed by the Tribunal which held that the amount received by the assessee by way of cash in excess of Rs.20,000 is neither a loan nor deposit and therefore section 269SS is not attracted. The assessee is doing job work from M/s. Namasthe Exports Ltd. In fact it is a sister concern. The entire goods manufactured by the assessee is sold to M/s. Namasthe Exports Ltd. and it is not sold to any other person. The assessee is running under loss. The total value of the transactions between the assessee and Namasthe Exports Ltd. is around Rs.94758,272. However the assessee has received a sum of Rs.8,15,600 in excess of amounts due to them. The said amount has been received in cash. It is that amount which is described by the Revenue as a loan and it is contrary to section 269SS of the Act and they have initiated proceedings and levied penalty. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Appeals who upheld the order of the assessing authority and dismissed the appeal. In appeal before the Tribunal it has accepted the case of the assessee that the said cash transaction did not fall within the definition of loan or deposit as stipulated in section 269SS of the Act, it was an amount paid in advance for the job work done to facilitate the assessee to survive in the business and therefore the Tribunal held that the said amount did not represent the loan or deposit and section 269SS is not attracted and therefore the penalty imposed was set aside. Aggrieved by the said order, the Revenue is in appeal. 2. The learned counsel appearing for the Revenue assailing the impugned order contended that in the arguments before the Commissioner of Income-tax (Appeals) it is admitted that it is only a technical error or a mere breach and therefore there is a clear admission. A breach could happen only when the assessee has acted contrary to section 269SS and therefore the finding of the assessing authority that the said amount represents a loan is valid and legal and the Tribunal was in error in interfering with the said order. 3. Per contra, the learned counsel for the assessee supported the impugned order. 4. A breach could happen only when the assessee has acted contrary to section 269SS and therefore the finding of the assessing authority that the said amount represents a loan is valid and legal and the Tribunal was in error in interfering with the said order. 3. Per contra, the learned counsel for the assessee supported the impugned order. 4. The scope and effect of section 269SS as also section 276GB have been elaborated in the following paragraph of the Departmental Circular No. 387, dt. 6-7-1984 as under : Unaccounted cash found in the course of searches carried out by the Income-tax Department is often explained by tax payers as representing loans taken from or deposits made by various persons. Unaccounted income, is also brought into the books of account in the form of such loans and deposits, and tax payers are also able to get confirmatory letters from such persons in support of their explanation. In the instant case, the status of the parties is not in dispute. The assessee is a manufacturer who has supplied the goods manufactured to M/s. Namasthe Exports Ltd. The material on record discloses that the assessee has no other customer except M/s. Namasthe Exports Ltd. The total turnover between the parties is Rs.94,58,272, out of which Rs.68,15,600 represents the cash component. The said amount is not paid in one instalment, it has been paid in several instalments which are less than Rs.20,000. It is also on record that the assessee is running under loss. To keep the establishment going, in order to meet the small commitments when they had no funds they have acquired funds from this M/s. Namasthe Exports Ltd. 5. From the material on record there is nothing to indicate that the said amount paid is a loan. No inference of loan can be drawn from such excess payment of the loans paid by M/s. Namasthe Exports Ltd. which is reflected in their accounts and correspondingly it is entered in the accounts maintained by the assessee. In fact, the purpose for which the said amount was received is also clear from the material on record and therefore there is nothing to indicate that this amount is paid as loan or deposit. In fact, the purpose for which the said amount was received is also clear from the material on record and therefore there is nothing to indicate that this amount is paid as loan or deposit. In the absence of such material on record keeping in mind the relationship between the parties the nature of transaction coupled with the fact that the assessee is undergoing a financial difficulty, if M/s. Namasthe Exports Ltd., has extended the benefit to its sister concerned to tide over the situation, it cannot be construed as a loan as held by the assessing authority. Therefore the Tribunal was justified in setting aside the impugned order as well as the setting aside the penalty imposed for the alleged contravention of section 269SS of the Act. We do not seen any merit in this appeal. The substantial question of law framed in this appeal is answered in favour of the assessee and against the Revenue.