Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 212 - HC - Income TaxPenalty under Section 271-D - firm had accepted payments from the partners, during the relevant year corresponding to the Assessment Years, in cash - Held that:- The answer to the issue which arises for our consideration has its contours in realm of the Partnership Law as well as the Act.The transactions between the partner and the firm do not partake the character of a loan or deposit and therefore, there is no applicability of the provisions of Section 269-SS of the Act. There is no separate legal entity for the partnership firm and the partner is entitled to use the funds of the firm. The transaction was bona fide and not aimed to avoid any tax liability. Creditworthiness of the partners and genuineness of the transactions coupled with the relationship between the “two persons” and two different legal interpretations put forward could constitute a reasonable cause in a given case for not invoking Section 271-D and 271-E of the Act. Section 273B of the Act would come to the aid and help of the respondent-assessee. See Commissioner of Income Tax, Madras Vs. R.M.Chidambaram Pillai & Ors [1976 (11) TMI 2 - SUPREME Court] and Commissioner of Income Tax Vs. V.Sivakumar. [2013 (3) TMI 265 - MADRAS HIGH COURT] - Decided in favour of assessee.
|