Loan repayment by partnership firm to partners via journal entries not falling u/ss 269SS/269T.

The Income Tax Appellate Tribunal (ITAT) ruled that a partnership firm repaying loans to its partners through journal entries is not subject to sections 269SS and 269T of the Income Tax Act, as the firm is not distinct from its partners. Such transactions are exempt under section 273B, which protects against penalties under section 271E if there is a reasonable cause for not using prescribed modes for loan transactions. The journal entries were made in good faith, based on legal precedents, without intent to evade taxes. The appeal by the assessee was therefore allowed. .....

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