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2016 (12) TMI 1875 - ITAT KOLKATAPenalty u/s.271E - violation of Section 269T - assessee has repaid a loan in cash - assessee explained that he is a partner in the said firm and it is a payment between partner and his firm and pleaded that Section 269T is not applicable - HELD THAT:- As decision in the case of CIT vs Lokhpat Film Exchange (cinema) [2007 (1) TMI 165 - RAJASTHAN HIGH COURT] held under the general provision relating to Partnership Act that partnership firm is not a juristic person and for inter relationship different remedies are provided to enforce the rights arising out of their inter se transactions, the issue about separate entities apart, it cannot be doubted that the assessee has acted bona fide and his plea that inter se transactions between the partners and the firm are not governed by the provisions of ss. 269SS. We find that the CIT-A found examined and satisfied that the assesse is a partner in a firm i.e M/s.C.M.Roy & Sons and the AO also during the course of assessment proceedings on perusal of the ledger account in respect of advance receipt and payment found that the Assessee credited as advance from customers with an endorsement “To advance memo no- to- from customers” and also found the entire sale to M/s.C.M.Roy & Sons. The assessee takes advances from its customers and makes payment to its firm time to time for meeting the business needs. We hold that the money received or paid in the above circumstances specially between the partners and its firm can be treated in the nature of advance and not loan or deposit as contemplated in sec.269SS of the Act and that the payments between the partnership firm and its partner and vice versa are payment to self. As discussed above the advances received by the assessee were from proper source and there is no doubt the genuineness of the transactions. In such circumstances, the penalty imposed u/s.271E of the Act is not maintainable - we cancel the penalty levied by the A.O. u/sec.271E - Decided against revenue.
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