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Applicability of sec 269ss

1215 views 2 replies

Sukanta Sikdar

CA Job

43 Points Posted on 09 April 2013

Warm greetings to all the members,

A Public Limited Company is engaged in Online Trading of Gold, wherein any customer may come and book a certain quantity of gold for certain period, and accordingly the price for the booked quantity of gold would be determined, which would be the rate applicable on the booking date.

The Customer would be required to pay the booking amount in several installments as per the terms of tenure chosen by him/her. After the tenure, the scheme would get matured and the customer would receive the booked quantity of gold irrespective of the price availing in the market on the maturity date of scheme.

My question is whether the product booking advance collected from customers as installment in cash, would be liable for applicablity of Sec 269ss of Income Tax Act?

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Posted on 09 April 2013

Any amount collected in the ordinary course of business will not attract the provision of sections 269SS. Yours is case in whihc the clinet deposits some advance whic is for the purpose of your business so it will shown as an advnce under Current Assets and not under Loans.

Guest

Section 269SS/T cover cases pertaining to loans and deposits not advance taken in ordinary course of business, so Section 269SS can not be invoked in your case.