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2018 (11) TMI 649 - HC - Income TaxPenalty imposed u/s 271D r.w.s. 269SS - Held that:- To attract provisions of Section 269SS, the amount paid in cash must be either loan or deposit. In the present case the assessee and M/s Saamag Construction Ltd. had entered into a joint venture and payments were made by M/s Saamag Construction Ltd. in terms of the MoU. These payments were not to be refunded. Essential attributes of a loan or deposit, is the right to claim payment and obligation to re-pay. This was missing. On completion of project, the net profit was to be distributed between the assessee and M/s Saamag Construction Ltd. It is a well settled principle applicable to income tax that entry in the books of account on description and treatment is not decisive as to the nature of the transaction as held in Kedarnath Jute Mfg. Co. Ltd. Vs. CIT [1971 (8) TMI 10 - SUPREME COURT]. Clearly Section 269SS does not apply to every transaction. Therefore Section 269ST of the Act was enacted by Finance Act, 2017 w.e.f. 01.04.2017. This section postulates that no person shall receive an amount of ₹ 2,00,000/- or more in aggregate in cash from any person in respect of a single transaction or in respect of transactions relating to one event or occasion, otherwise than by way of account payee cheque, account payee bank draft or by way of electronic clearing system through a bank account. The said Section 269ST of the Act is not applicable to the present assessment year.
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