Applicability of section 269ss

This query is : Resolved

NAVNEET KUMAR JAIN (Querist)
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24 January 2013 Dear All

Please clarify payment of loan to third party by account payee cheque on borrower request is valid compliance of section 269 ss I will will appreciate if someone can refer some case law on the matter

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 January 2013 In this case the amount has been transferred by account payee cheque from the lender to the recipient.
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The recipient credits account of the borrower in spite of crediting the sum to the lender through book entry.
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Similarly the lender is also debiting to the Borrower only- this again is a book entry.
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There is no violation of Section 269SS and 269 T.
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Please go through the article-

http://taxworry.com/is-transfer-of-loan-or-deposit-by-book-entreis-liable-to-penalty-us-269ss-or-269t/#axzz2Ixctf9nB