Case Law Details
Bookmywish E Commerce Pvt. Ltd. Vs Addl. CIT (ITAT Ahmedabad)
Introduction: In the case of Bookmywish E Commerce Pvt. Ltd. vs. Addl. CIT, the company faces penalties under Section 271D of the Income Tax Act for accepting cash loans from directors. The dispute revolves around the alleged violation of Section 269SS. We delve into the details to understand the legal nuances and consequences.
Detailed Analysis: The Additional CIT imposed a penalty of Rs. 4 lakhs on Bookmywish E Commerce Pvt. Ltd. for accepting cash loans, violating Section 269SS. The loans in question were received in cash from directors Anish Nagpal and Amit Purswani, evident from the ledger accounts. The company argued that these transactions were part of the current account and not subject to penalties.
The appellate proceedings reveal that the company failed to convince authorities that it fell within the exempted list of Section 269SS. Legal references were made to cases like CIT vs. Idhyam Publications and CIT vs. Natwarlal Purshottamdas Parekh. However, the distinguishing factor was the cash nature of transactions in Bookmywish’s case.
Conclusion: Despite citing judicial precedents related to current accounts, the ITAT upheld the penalty, emphasizing the absence of debit transactions and the exclusively cash-based nature of transactions with directors. The company’s failure to demonstrate compliance with Section 269SS resulted in sustaining the penalty under Section 271D. The case underscores the importance of understanding legal nuances in financial transactions to avoid unintended consequences.
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