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Application money

This query is : Resolved 
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(Querist)
21 November 2012 I just want to know that application money pending allotment in a private limited company can be returned in cash.
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CA CS Amit S. Kedia

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CA CS Amit S. Kedia (Expert)
21 November 2012 Yes..There is no violation of section 269SS and 269T
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CS Ankur Srivastava

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CS Ankur Srivastava (Expert)
22 November 2012 However, it should be returned by way of Account Payee Cheque or DD.
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CA CS Amit S. Kedia

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CA CS Amit S. Kedia (Expert)
27 November 2012 Dear Mr. Srivastav,
Even if it is paid or received in cash there is no violation of section 269SS or 269T. The money in cash by a company towards allotment of shares, was neither a loan nor a deposit and if it is not a "loan or deposit" then section 269T will not attract.
Citation-
1. Hon’ble Madras High Court in CIT Vs. Rugmini Ram Ragav Spinners Private Ltd. (2008), 304 ITR 417
2. Deputy CIT V/s. M/s Alpex Exports (P) Ltd-ITAT(DELHI)-28/08/2012
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