Question ID : 669

Penalty U/s 271 D read with sec. 269 SS

Here is Compnay A(Manufacturer of picides.)
Distributer B
Dealer C

this case the dealer C Issued Cheques , drafts favor of Company A and send these cheques and DDs to company A and tid the distributer B,

Distributed B corporated all the entereis his books of accounts by book transfer and issued sale bills to dealer C only for am amonut of 10% of the amount of remitance to A.
Bance 90% of the amount remited by C to A still lyg the books of B shown as unscured loan.

Q. Wheather the amount lyg as unsecured loan the books of B (Which was sent to A by C directly) are viotion of Sec. 269 SS and can the penalty be imposed U,s 271 D .
can these enteries by book transfer be treated as cash transitions.
Sec 269 SS that No person shall take or accept any loan or deposit other than by an account payee cheque or a,c payee bank DD.
Kdly wrtie and case w. '

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