Regarding 269 SS/ST

This query is : Resolved

A J Sankar (Querist)
Follow

21 August 2010 Dear members,

Presently i am doing tax audit.
My client has group companies, ie two partnership firms and two companies.

It was observed that there are transactions like Advance from customers for more that Rs. 20000 in cash against sales. Also some times MD and other companies relating to comapny(s) give and take cash more than Rs.20000 for adjustments ie (as cash is less in one company to make payments) etc.. And repayments thereof. Do these transactions attact sec 269 ss/st.
What are the possibilities of attracting the same in case of group firms/companies.

Also state whether contract payments (among companies) attract 40 A (2)?

Reply please

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

21 August 2010 First of all it is advance being received from customers whereas section 269SS & 269T covers loan or deposit so it is neither. Secondly it is in the nature of business transaction and not loan.

Amount is being received from customers so section 40A(3) will not be attracted in the hands of the cleint thought there may be disallowance in the hands of the customers.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now