IT SECTION 2(22)e

[shamji bhanushali]

Sir,

my client is partnership firm and there are 7 partners in the firm. they have one another p.ltd company. and directors are common except two partners. they are doing same business . separately.. during the year 2012-13 p.ltd Company has given Loans or Advances to partnership firm and charge interest to partnership firm. Now Assessing Officer observed and add amount of Loan account i.e. Closing balance of Loan account as per partnership balance sheet at the time of assessment subject to Section 2(22)e . can you advise us or give any judgment pronounce by High court or suprim courte related with the same section clerification.

THANK YOU

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AI Summary

Clarification sought on Section 2(22)(e) after loans to partnership firm with common directors in private company. A partnership firm with seven partners, who also have a private limited company with common directors except for two partners, received loans or advances from the company during the 2012-13 fiscal year. The company charged interest on these loans. The Assessing Officer noted this and added the loan account's closing balance to the partnership's balance sheet during assessment under Section 2(22)(e) of the Income Tax Act. The inquiry seeks advice or relevant judgments from higher courts for clarification on this section.