Regarding loan, not, it will be the borrower in the whose such as for instance or even for whose demands cash is state-of-the-art

• It can’t connect with transactions ranging from a shared relationship and its own professionals due to the fact is felt like in the Muslim Urban Co-medical Credit People Ltd. v. JCIT [(2005) 278 ITR (AT) 246 (Pune)].
• It absolutely was held inapplicable so you’re able to a purchase between a firm and you https://perfectloans24.com/installment-loans-nj/ can their people because was canvassed, however it is discovered to be must pick the difficulty because reasons happened to be or even appropriate within the CIT v. Lokhpat Motion picture Exchange (Cinema) [(2008) 304 ITR 172 (Raj.)].
• Truth be told there cannot be a couple lawfully different activities since the between a company and you can lovers as is baram Pillai [(1977) 106 ITR 292 (SC)]

Typically, regardless if not at all times, when it comes to a deposit, it’s the depositor who is the prime mover while in the situation of that loan, it is the debtor that is the top mover

`Loan’ and you can `Deposit’ aren’t the same within the definition however it is true that in both happening from mortgage along with the scenario off deposit, there was a relationship regarding borrower and you will creditor involving the activities offering money and also the events acquiring currency. In the example of put, the brand new beginning of money can often be during the example of the latest giver and is for the advantage of the person who placed the bucks.The main benefit usually getting earnings interesting regarding a celebration whom commonly allows dumps.

Particular funds are places and some dumps tends to be money however, all fund are not deposits and you can the other way around

This new deposit is also to possess safe keeping otherwise just like the a good coverage to your overall performance out-of a duty done of the depositors. Credit is primarily towards the advantageous asset of the new debtor as the person that lends the bucks can also stand-to gain and therefore from the earning appeal towards number borrowed.

In the eventuality of Kans Raj & Sons v. ITO [(2005) 92 TTJ 931 (Asr.)]it actually was kept you to definitely ‘Loan’ and you may `deposit’ commonly identical within the meaning and cannot end up being inter-altered. In which the assessee, rather than stating the entire ins and outs of the brand new put and you will instead of giving any specifics as to the reasons he was taking those dumps and you may why those depositors was basically and then make men and women deposits on assessee and just how the individuals dumps was to be returned / paid of the assessee for the depositors, had called those people deposits about character away from current accounts:

Stored one to unless of course the fresh new assessee had given/offered the complete info on AO in the course of research otherwise at the time of punishment legal proceeding, when you find yourself providing their reason, it was difficult to hold that those depositors was in fact that have one latest membership into assessee or the deposits on assessee-corporation produced by the fresh depositors just weren’t protected inside the definition of loan or put just like the considering during the section 269SS. And this, the amount of places by depositors towards assessee was in fact dumps inside the concept of point 269SS therefore the assessee had broken new specifications from point 269SS.

And make book improvement regarding financing by assessee firm which have aunt concern instead of and also make commission of cash, cannot said to be solution otherwise contravention off area 269SS and you will area 269T – Gururaj Micro Roller Flour Mills v. Addl. CIT [(2015) 370 ITR 50 (AP &Telangana)]

• Object of section 269SS is always to stop transaction into the currency; this is not designed to apply at instances when a loans or an accountability appears because of publication records –CIT v. Global Township Tactics Ltd. [(2014) 367 ITR 433 (Delhi)] Ambit from point 269SS is in fact simply for purchase related to welcome of cash rather than meant to connect with cases where an obligations otherwise a liability arises on account of book records. The assessee showed PACL just like the a good sundry creditor in its courses. PACL bought countries on the behalf of the latest assessee. PACL generated costs so you’re able to property customers compliment of demand drafts. This new AO figured purchase unveiled by the assessee amounted to a loan on the assessee and this zero money had enacted through bank accounts of your own assessee for acquisition of countries. Stored that there are zero violation of area 269SS and you will punishment procedures was to feel quashed.