M/s Gamma Ltd. is an Indian company engaged in providing consultancy and business advisory services. During the previous year 2023-24, it received…

CA Final · Direct Tax Laws and International Taxation · PYQS · November 2024
M/s Gamma Ltd. is an Indian company engaged in providing consultancy and business advisory services. During the previous year 2023-24, it received the following loans in cash from various vendors due to some business exigency: 3,00,000 availed from Mr. Arun on 20.04.2023. 19,500 availed from Mr. Raj on 20.05.2023. 20,500 availed from Mr. Sunil on 20.06.2023 Further, the company made the following loan repayments during the year: 18,000 to Mr. Arun on 15.07.2023 in crossed cheque. 1,25,000 to Mr. Arun on 10.08.2023 through account payee cheque. 21,000 to Mr. Arun on 08.10.2023 through RTGS. 3,000 to Mr. Arun on 12.12.2023 through cash. M/s Gamma Ltd. also furnished the following particulars for assessment year 2024-25: S. No. Particulars of total income Amount (₹) 1 As per the return of income furnished under section 139(1) (10,00,000) 2 Determined under section 143(1)(a) (5,00,000) 3 Assessed under section 143(3) (1,00,000) 4 Reassessed under section 147 5,00,000 The total turnover of Gamma Ltd. for the P.Y. 2021-22 was 405 crores. Ignore the provisions of section 115BAA/115BAB. From the information given above, choose the most appropriate answer to the questions 4 to 7:-
(A) No penalty is leviable since the repayment otherwise than by way of prescribed modes is less than - 20,000
(B) Penalty of 21,000 under section 271E
(C) Penalty of 3,000 under section 271D
(D) Penalty of 24,000 under section 271E

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Penalty of 21,000 under section 271E

Topics: Double Taxation Relief, Assessment of Trusts and Institutions, Political Parties and Other Special Entities, Non-Resident Taxation

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