Bucks recognized and you may records made in cash book

During the CIT versus. Roentgen.Yards. Chidambaram Pillai 106 ITR 292(SC),it’s been held one to connection is just a collaborative out of independent individuals and not an appropriate person in in itself. Ergo, around can’t be a contract out of service during the rigid law ranging from a company and one of their partners.

New terms off Part 269SS of your own Act does not get attracted only for import from amount to that loan account inside the the type of book entryway

Therefore, depending on the aforementioned idea, some courts keeps kept that when out-of a collaboration agency, there is no independent identity away from mate and you can firm and you can, for this reason, in which somebody took financing when you look at the cash out-of organization, there clearly was zero ticket of point 269SS so as to invoke penal specifications from area 271D. CIT vs V. Sivaku] thirty two taxmann 62 (Madras), CIT vsLokhpat Flick Change (Cinema) 304 ITR 172 (Raj.), Shrepak Businesses versus DCIT 64 ITD three hundred (Ahd.- Trib.)

Investment contribution from inside the dollars away from somebody in the connection corporation will not focus arrangements of Point 269SS even if the number was came back towards non-approval of Authorities for composition from connection firm

A plain studying of your own Part 269SS of the Operate suggests which applies to an excellent transactionwhere a deposit otherwise financing was recognized by the an enthusiastic assessee, otherwise than by a merchant account payeecheque otherwise a free account payee draft. The latest ambit of your Area is clearly limited to purchases of acceptance of money in fact it is not designed to apply at instances when a financial obligation otherwise an accountability pops up on account of publication entries. Really the only object on the section would be to avoid purchases during the money.

This might be in addition to clearly explicit from term (iii) of the need in order to Part 269SS of Act and that represent financing or deposit in order to mean “loan or deposit of money”. The fresh accountability recorded on instructions regarding levels thanks to record records,i.age. crediting this new account off a celebration so you can who monies are payable otherwise debiting the latest membership away from aparty of who funds was receivable throughout the books away from account, is obviously outside of the ambit of provision from Part 269SS of your own Act, as passageway such as entries does notinvolve welcome of any financing otherwise deposit of cash Administrator of money-taxation, (Central) IV vsAdinath Builders (P.) Ltd 102 taxmann 57 (SC) HC held you to acknowledgment of any progress otherwise loan by way off diary records is in breach regarding part 269SS. CIT Vs. International Township Ideas Ltd., 367 ITR 433 (Delhi). Opposite look at could have been drawn of the Higher Courtroom out-of Bombay when you look at the CIT compared to Triumph Worldwide Financing (I) Ltd. 345 ITR 270 (Bombay) in which kept that payment out of mortgage/deposit by the just debiting account because of diary records contravenes provisions out of Section 269T.

• CIT versus Noida Cost Connection Co. Ltd. (2003) 262 ITR 260 (Del) Where in fact the purchase is by a merchant account payee cheque, zero commission to the membership is established into the cash by assessee or with the its part, zero loan might have been approved of the assessee from inside the dollars, as well as the fee out-of Rs. cuatro.85 payday cash advance Oxford Ohio crore has been made as a result of IL&FS, which keeps more 29% of your paid up financial support of one’s assessee of the journal records by the crediting the fresh account from IL&FS, the new Hon’ble Delhi Highest Legal observed one terms away from section 269SS aren’t drawn. None the new assessee nor IL&FS got made people commission from inside the bucks.
• DCIT compared to Forging Ltd. twenty five taxmann 156 (Delhi-ITAT) Facts: The new consideration for home is paid so you’re able to growers compliment of a real estate agent and agent’s membership is credited using journal entries. The quantity was paid in dollars from the agent towards farmers. Held, The phrase financing or deposits been defined to mean loan otherwise put of cash. This new assessee have not recognized one put regarding as a result of profit cash. It’s credited this new account away from ‘D‘ thanks to diary records in respect from pick idea paid back toward its account of the ‘D‘ as a consequence of ‘J‘. Hence new section isn’t appropriate.