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TMI Blog2007 (1) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... - assessee has acted bona fide and his plea that inter se transactions between the partners and the firm are not governed by the provisions of Section 269 SS and 269T was reasonable explanation – penalty not justified - 32 and 61 of 2002 - - - Dated:- 23-1-2007 - RAJESH BALIA and CHATRA RAM JAT JJ. Sangeet Lodha for the appellant. Anjay Kothari for the respondent. JUDGMENT Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f deposit otherwise then by way of cheque or bank draft inviting the provisions of Section 266 SS and 267 T and considering these payments and repayments were in violation of Sections 269 SS and 269 T imposed penalty under Sections 271 D and 271 E respectively for receiving the deposit in cash and payment in cash. 4. The assessee had claimed that in view of the fact that partners and firm are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in CIT, Madras Vs. R.M. Chidambaram Pillai [1977] 106 I.T.R. 292 wherein the Supreme Court has said that there cannot be a contract of service, in strict law, between a firm and one of its partners so as to consider the salary paid to the partner as income from salary held that for the purpose of Sections 269 SS and 269 T also the firm and partners cannot be considered to be separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er se transactions, the issue about separate entities apart, it cannot be doubted that the assessee has acted bona fide and his plea that inter se transactions between the partners and the firm are not governed by the provisions of Section 269 SS and 269 T was bona fide and reasonable ground existed on which they had not adhered to the requirement of conducting the transaction through bank only. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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