Friday, November 18, 2011

Penalty under s 271D

Where transactions are in the nature of the current account with sister concerns without any conditions or stipulation as to the period of repayment, rate of interest, manner of repayment, etc, so as to treat the said transactions as loans or deposits, a penalty imposed under s 271D is unsustainable as held by AhdTrib in Bright Play Centre v ACIT — In favour of: The assessee.

Where transactions are not in the nature of loans or deposits, the provisions of s 269SS are not attracted and no penalty can be imposed under s 271D.

Decided on: 5 August 2011.

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