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1 - 6 of 6 (2.10 seconds)The Coinage Act, 2011
Section 269SS in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income Tax vs Lokhpat Film Exchange (Cinema) on 23 January, 2007
4.1 Therefore, when the transactions are treated as the
transactions of capital account and not loan transactions in the
hands of the firm M/s. Akshar Gems, then it is obvious that the
same transactions in the hands of the appellant could be of capital
account transactions only and there is no reason to treat the same
as repayment of loans and the decision of the Hon'ble Tribunal is
applicable to the appellant also. Even on merits, it is observed that
no separate accounts were maintained in respect of capital account
and loan account in the books of the firm as well as the appellant.
From a copy of capital account in M/s. Akshar Gems, it is observed
that there were transactions of movement of capital during the
year to and from the firm and also there were transactions of
interest on capital/ salary to partner and payment of income tax.
Thus, the transaction in the said account also gives a picture of
capital account transactions and therefore, the payment made by a
partner to a firm or repayment by the firm to a partner cannot take
the character of loan or deposit. On perusal of audited balance
-5-
sheet it was also observed that the debit balance of capital account
of the appellant was shown in Schedule "A" being Statement of
Partner's Capital Account and the same was reflected accordingly
in the balance sheet. Therefore, I am of the view that the
transactions between the appellant and M/s. Akshar Gems were
related to capital account transactions only and were not related to
loan account transactions* "The appellant had in his personal
balance sheet separately shown the loan transactions under (he
broad head "loans" and thus the intention of the appellant in
respect of the transactions with the firm was very clear to consider
the same as capital account transactions and he acted under a
bonafide belief that the transactions between the firm and partners
did not "attract the provisions of Sections 269SS and Section 269T.
The Hon'ble Rajasthan High Court in CIT V/s. Lokhpat Film
Exchange (Cinema) (Supra) held that the asscssee firm acting
under a bonafide belief that the transactions with partners did not
attract the provisions of Sections 269SS and 296T and such
bonafide belief constituted reasonable cause for deleting the
penalty U/s. 271D and Section 271E of the Act, The Hon'ble 1TAT
Ahmedabad in Shrepak Enterprise Vs. DCIT (supra) held that the
amount paid, by firm to partners and vice versa is payment to self
and does not partake the character of loan or deposit in general
law and no penalty provisions arc applicable.
Section 271D in The Income Tax Act, 1961 [Entire Act]
Section 271E in The Income Tax Act, 1961 [Entire Act]
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