269 st - receipts / payments 2 lakhs and above

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2018 one of my tax auditee assessee brought in capital of Rs.1,80,000/- and Rs 1,90,000/- on two different dates,
has he voilated sec 269 ST ? will it be considered as in respect of single transaction ?

And he also drawn monthly around Rs.20,000/- and in year amounting to Rs.2,40,000/-
is it necessary to report in Form 3CD of clause 31(bc) ?

Expert : Anonymous

Expert : Anonymous (Expert)

04 September 2018 Capital contributions are not covered by provisions of Section 269ST. Once loan transactions are covered in the said clause. Hence I believe that reporting in Clause 31 might not be required to the extent of Capital.

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2018 sec 269ST SPEAKS about receipt otherwise than by ac payee cheques or dds or ECS. does additional capital brought in exceeding 2 lakhs and above voilates 269ST?

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CA Ankit R Momaya

CA Ankit R Momaya (Expert)
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04 September 2018 Is the assessee a firm or proprietorship concern ?

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Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2018 assessee is proprietorship concern.thanks in adavace

CA Ankit R Momaya

CA Ankit R Momaya (Expert)
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04 September 2018 As far as proprietorship business is concerned, it is well settled fact that both the owner and the business are not distinct persons and they are not separate legal entities. They are one and the same.

By reading the provisions of Sec 269ST, it can be made out that there has to be there has to be 2 distinct persons, one to give the amount and another to received the payment. i.e. X gives money to Y.

As far as proprietorship is concerned, X is giving money to X only. Hence I believe that Sec 269ST is not trigerred in the above case. Even otherwise if we think logically, an individual cannot recieve any money from himself. ! This is my personal view.

As this section is introduced w.e.f 1-4-2017, we have to wait for judgement's, clarifications in the above matter.

Hope this clarifies your query. And consequently reporting under Clause 31 is not required.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2018 thank you.your logic is excellent. of course we have to wait for judgements and i hope they will be infavour of assessee.