Into the CIT versus. R.Yards. Chidambaram Pillai 106 ITR 292(SC),it has been stored one to relationship is only a collaborative away from independent persons and not a legal member of in itself. Ergo, there cannot be a binding agreement off service during the strict legislation anywhere between a company and one of their couples.
The brand new provisions out-of Section 269SS of your own Operate doesn’t drawn simply having transfer of total a loan membership in the the type of book admission
For this reason, counting on the aforementioned principle, certain courts has stored that when out of a partnership agency, there’s absolutely no independent title from partner and you can corporation and you will, thus, where someone got loan inside the bucks out of business, there is no admission away from area 269SS to invoke penal specifications of section 271D. CIT versus V. Sivaku] thirty two taxmann 62 (Madras), CIT vsLokhpat Motion picture Replace (Cinema) 304 ITR 172 (Raj.), Shrepak Organizations compared to DCIT 64 ITD 300 (Ahd.- Trib.)
Resource sum within the cash out-of somebody about union enterprise doesn’t attract arrangements out of Point 269SS even if the amount was returned to your low-approval of Regulators to own composition regarding relationship agency
An ordinary reading of one’s Part 269SS of your Operate indicates which relates to a good transactionwhere a deposit or financing are approved of the a keen assessee, otherwise than simply by the a free account payeecheque or a merchant account payee write. The brand new ambit of the Section is simply for purchases connected with invited of money that will be maybe not designed to apply at cases where an obligations or a responsibility appears because of guide entries. The only real object on the point will be to avoid purchases inside money.
That is and additionally obviously direct away from term (iii) of reason in order to Part 269SS of the Act which defines loan otherwise deposit so you’re able to indicate “loan otherwise put of cash”. New responsibility recorded in the guides away from account by way of journal records,we.age. crediting brand new account from a celebration to whom funds is payable or debiting the fresh new account out-of aparty out-of which monies are receivable regarding instructions from profile, is beyond your ambit of the provision away from Area 269SS of your own Operate, since passageway including entries does notinvolve desired of any loan otherwise deposit of cash Administrator of money-income tax, (Central) IV vsAdinath Builders (P.) Ltd 102 taxmann 57 (SC) HC stored one bill of any improve or mortgage by way away from log entries is during infraction from section 269SS. CIT Compared to. Worldwide Township Strategies Ltd. payday loans Maitland bad credit, 367 ITR 433 (Delhi). Contrary see has been pulled from the Large Courtroom off Bombay within the CIT against Achievement International Financing (I) Ltd. 345 ITR 270 (Bombay) by which kept that payment from mortgage/deposit because of the simply debiting account due to record records contravenes arrangements out-of Part 269T.
- CIT against Noida Cost Connection Co. Ltd. (2003) 262 ITR 260 (Del) Where transaction is through an account payee cheque, zero fee to your membership is established in cash by assessee otherwise for the its behalf, no mortgage could have been acknowledged of the assessee from inside the bucks, and also the percentage regarding Rs. cuatro.85 crore is made courtesy IL&FS, and this keeps over 30% of paid-up funding of one’s assessee of the journal records of the crediting the brand new membership off IL&FS, new Hon’ble Delhi High Courtroom observed one to specifications away from area 269SS commonly lured. None this new assessee neither IL&FS had generated one commission for the dollars.
- DCIT versus Forging Ltd. twenty-five taxmann 156 (Delhi-ITAT) Facts: This new attention having belongings is paid down to help you producers because of a realtor in addition to agent’s membership are credited because of diary entries. The quantity is paid in cash from the agent to your farmers. Kept, The term loan otherwise deposits already been discussed to indicate loan otherwise put of money. The fresh assessee has never acknowledged people deposit regarding compliment of cash in bucks. This has credited new account away from ‘D‘ as a consequence of journal entries in respect of purchase believe paid off toward its account by ‘D‘ using ‘J‘. Hence the new point isn’t appropriate.