Case Law Details
Amount paid by firm to partners or vice versa is payment to self and does not partake the character of loan or deposits in general law. Provisions of section 269SS are not applicable to such facts.
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 Section 269SS and 269T was bona fide and reasonable ground existed on which they had not adhered to the requirement of conducting the transaction through bank only. Therefore, on the facts found by the AO as well as the Tribunal, the assessee was otherwise not liable to be subjected to penalty.
HIGH COURT OF RAJASTHAN
Commissioner Of Income-Tax.
Vs.
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