Transfer of loan to spouse through journal entry won’t be deemed repayment of loan in violation of sec. 269T
Court : IN THE ITAT DELHI BENCH 'B'
Brief :
Section 269T, read with sections 271E and 275 of the Income-tax Act, 1961 - Deposits - Mode of
repayment of (Conditions precedent/Limitation for levying penalty) - Whether period of limitation for levying
penalty under section 271E is to be counted from date of initiation of penalty proceedings by Assessing Officer and not from date of issue of notice by Joint Commissioner - Held, yes - Whether section 269T would come into play only when there is actual repayment of loan; merely because loan is assigned by assessee to his wife by way of journal entry, it cannot be said that there is a repayment of loan otherwise than by accounted payee cheque or account payee bank draft, so as to penalise assessee under section 271E - Held, yes [Paras 8 and 9] [In favour of assessee]
Citation :
Brief :
Section 269T, read with sections 271E and 275 of the Income-tax Act, 1961 - Deposits - Mode of
repayment of (Conditions precedent/Limitation for levying penalty) - Whether period of limitation for levying
penalty under section 271E is to be counted from date of initiation of penalty proceedings by Assessing Officer and not from date of issue of notice by Joint Commissioner - Held, yes - Whether section 269T would come into play only when there is actual repayment of loan; merely because loan is assigned by assessee to his wife by way of journal entry, it cannot be said that there is a repayment of loan otherwise than by accounted payee cheque or account payee bank draft, so as to penalise assessee under section 271E - Held, yes [Paras 8 and 9] [In favour of assessee]
Citation :
Income-tax Officer
v.
Dinesh Jain
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