In CIT against. Roentgen.M. Chidambaram Pillai 106 ITR 292(SC),it has been stored you to definitely partnership is just a collective regarding independent persons rather than a legal person in alone. For this reason, here can’t be an agreement regarding service for the tight legislation between a strong and another of their people.
New specifications of Part 269SS of your Operate doesn’t lured just getting import out of amount to financing account from inside the the type of book entry
Therefore, counting on the above mentioned concept, various process of law possess kept that in case from a partnership organization, there’s absolutely no independent name out-of mate and you may corporation and you can, hence, in which somebody took loan within the cash regarding corporation, there is certainly zero violation of area 269SS so as to invoke penal terms away from section 271D. CIT versus V. Sivaku] thirty-two taxmann 62 (Madras), CIT vsLokhpat Film Exchange (Cinema) 304 ITR 172 (Raj.), Shrepak Businesses vs DCIT 64 ITD three hundred (Ahd.- Trib.)
Investment contribution in bucks of somebody in the union business does not desire conditions out of Section 269SS even if the count was returned towards low-acceptance from Regulators for structure off partnership organization
A plain training of the Point 269SS of one’s Act ways this applies to good transactionwhere in initial deposit or financing is accepted by the an assessee, if you don’t than just by the a free account payeecheque otherwise a merchant account payee write. The latest ambit of your Point is actually limited by purchases of enjoy of cash and is perhaps not meant to connect with instances when a debt otherwise an accountability pops up on account of book entries. The actual only real object for the section is always to avoid deals inside money.
This might be in addition to clearly explicit from clause (iii) of the reasons to Part 269SS of one’s Operate which describes mortgage otherwise put so you can imply “mortgage otherwise deposit of money”. The newest accountability registered about instructions out of account compliment of diary entries,we.elizabeth. crediting the brand new membership of a party so you’re able to whom monies is payable or debiting the membership regarding aparty out of just who monies was receivable regarding the books out-of membership, is in fact beyond your ambit of your supply off Area 269SS of Operate, because the passing such as entries really does notinvolve allowed of every mortgage or put of money Commissioner of money-taxation, (Central) IV vsAdinath Designers (P.) Ltd 102 taxmann 57 (SC) HC stored one bill of every get better otherwise loan by way out-of log records is in infraction from part 269SS. CIT Vs. Globally Township Strategies Ltd., 367 ITR 433 (Delhi). Reverse glance at might have been drawn by the Higher Judge out-of Bombay in CIT against Triumph Globally Loans (I) Ltd. 345 ITR 270 (Bombay) whereby kept you to definitely installment out of financing/deposit by only debiting account compliment of journal records contravenes conditions of Point 269T.
- CIT compared to Noida Toll Bridge Co. Ltd. (2003) 262 ITR 260 (Del) In which the deal is via a merchant account payee cheque, zero percentage toward account is done inside the bucks because of the assessee otherwise towards their account, zero loan might have been approved of the assessee within the cash, therefore the payment off Rs. 4.85 crore has been made courtesy IL&FS, and that keeps over 29% of the paid up investment of assessee by journal records because of the crediting the brand new account of IL&FS, new Hon’ble Delhi Large Court seen you to definitely provisions off https://perfectloans24.com/payday-loans-fl/margate/ part 269SS commonly drawn. Neither the brand new assessee neither IL&FS got produced any commission in cash.
- DCIT compared to Forging Ltd. twenty five taxmann 156 (Delhi-ITAT) Facts: Brand new believe getting belongings is actually paid back to farmers compliment of a representative in addition to agent’s membership try paid as a consequence of diary entries. Extent are paid in bucks from the broker towards farmers. Held, The term loan otherwise deposits started defined to help you mean financing otherwise deposit of cash. The new assessee has not yet recognized any deposit away from as a result of profit bucks. It has got credited the membership out-of ‘D‘ by way of record records in respect out of purchase idea paid back into the the behalf of the ‘D‘ compliment of ‘J‘. Thus this new area isn’t appropriate.