Where partners of firm gives money to firm in need of business exigencies and received it back through capital account, both in cash; no penalty could be levied

IT: Where partners of firm gives money to firm in need of business exigencies and received it back through capital account, both in cash; no penalty could be levied
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[2014] 49 taxmann.com 490 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'C'
Deputy Commissioner of Income-tax
v.
Chetan M. Kakaria*
N.K. SAINI, ACCOUNTANT MEMBER
AND SANJAY GARG, JUDICIAL MEMBER
IT APPEAL NO. 4961 (MUM.) OF 2011
[ASSESSMENT YEAR 2006-07]
FEBRUARY  3, 2014
Section 269T, read with section 271E, of the Income-tax Act, 1961 - Deposits - Mode of repayment of certain (In case of firm) - Whether there is no independent legal entity of firm apart from rights and liability of partners constituting it and if any amount is given or taken from firm by partners that cannot be treated as giving or taking of a loan - Held, yes - Assessee being a partner gave money to partnership-firm in need of business exigencies - Later on amount was received back - Impugned amounts routed through capital account of assessee partner - Whether no disallowance could be made by revenue and no penalty could be levied - Held, yes [Para 9][In favour of assessee]