A director of pvt ltd co has made payment of rs. approx 1 lac to labour for construction of building in cash on behalf of co.
Whether in books of company it will be treated as loan from director?
Will section 269SS be applicable?
Yes, 269SS will attract in this case.Receipt and repayment of loan in cash due to immediate business necessity would amount to reasonable cause for not levying penalty under sections 271D and 271E.
If assessee is able to satisfy that the reason for immediate necessity is genuine and he had no malafide intention as to evasion of undisclosed income, he may not be penalised under Sec271D due to reasonable cause.
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