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Provision of section 269t

manik (ca in practice) (420 Points)

25 May 2011

the company had taken a unsecured loan of2500000 from two individual but during current year they have been issued shares of the company to set off loan at face value. does this attract provision of section 269t or not? suggest

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10 Replies

CA NITUL MEHTA (KPMG-Senior Consultant-International Tax ) (236 Points)
Replied 25 May 2011

IN MY OPINION AS THERE IS NO TRANSSACTION IN CASH AND ISSUING SHARES IS AS GOOD AS REPAYING LONAS TAKEN . YES IF THE LOANS ARE TAKEN IN CASH IT WILL HIT 269SS IN THE YEAR OF TAKING THE LOAN

BUT HERE I DONT THINK SO IT WILL ATTRACT 269T

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valji (Accounts manager-MBA) (2150 Points)
Replied 25 May 2011

i am agree with mr nimit if loan is given under cash then attact 269 t

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 25 May 2011

agree with mr. NIMIT

Kumar Babu.G (Chartered Accountant) (1597 Points)
Replied 26 May 2011

In this case debt is converted into shares means there is no repayment of debt.Sec 269T will apply only in case od repayment not in case of conversion.Moreover the section was enacted in order to avoid cash transactions.So i firmly opine that in this case Sec 269T is not applicable.

Pavan Bharadwaj (Practicing Chartered Accountant) (353 Points)
Replied 26 May 2011

Sec 269ss will be applicable if the loan is taken in cash. 269t will not applicable as repayment is in other than cash.

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CA SAHIL MITTAL (JOB) (240 Points)
Replied 26 May 2011

No, section 269T wont be attracted

Pawan Kr. Tomar (CA) (169 Points)
Replied 26 May 2011

269T will be applicable if there is repayment of loan. In this case loan is only converted but repaid so 269T would not applicable.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 26 May 2011

Agreed wit wat Kumar sir says.

Anvesh Desai (Chartered Accountant) (156 Points)
Replied 26 May 2011

none of the sections would be applicable as no cash element is involved....

Kashif (Accountant-CA Finalist) (105 Points)
Replied 26 May 2011

Originally posted by : Kumar Babu.G
	In this case debt is converted into shares means there is no repayment of debt.Sec 269T will apply only in case od repayment not in case of conversion.Moreover the section was enacted in order to avoid cash transactions.So i firmly opine that in this case Sec 269T is not applicable.