269ss & 271d

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CA Tousif Ahmed (Querist)
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17 December 2013 whether penalty can be levied on hand loan taken in cash for purchase of immovable property? if possible reply with reference to case laws. Its urgent please reply

CA Tousif Ahmed

CA Tousif Ahmed (Expert)
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20 December 2013 Pleasr reply if anybody knows about similar issue

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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14 July 2024 In India, taking a loan in cash for the purchase of immovable property can have implications under the Income Tax Act, primarily under Sections 269SS and 271D. Here’s a brief overview:

### Section 269SS - Mode of Taking or Accepting Certain Loans and Deposits

- **Provision:** Section 269SS prohibits the acceptance of loans or deposits exceeding Rs. 20,000 in cash. If such loans or deposits are accepted in contravention of this provision, penalties can be imposed.

### Section 271D - Penalty for Contravention of Section 269SS

- **Penalty:** Section 271D provides for a penalty equal to the amount of loan or deposit accepted in cash in contravention of Section 269SS.

### Case Law Reference:

While I don't have access to specific case law references at the moment, judicial decisions in tax matters often reinforce the provisions of the Income Tax Act. Here’s a general understanding based on legal interpretations:

- **Legal Principle:** Courts typically uphold penalties under Section 271D if it is established that a loan or deposit in cash exceeding Rs. 20,000 was accepted for the purchase of immovable property. The penalty is levied to deter cash transactions and ensure compliance with the law.

- **Judicial Approach:** Courts emphasize adherence to statutory provisions and penalize violations to discourage cash transactions that could potentially be used for tax evasion or money laundering purposes.

### Conclusion:

Based on the provisions of Section 269SS and Section 271D:
- Accepting a loan in cash exceeding Rs. 20,000 for the purchase of immovable property can attract penalties under Section 271D.
- It is advisable to avoid cash transactions exceeding the specified limits and to follow legal procedures for loans and deposits involving immovable property.

For precise guidance and case law references pertinent to your specific situation, consulting with a qualified tax advisor or legal expert would provide the most accurate and tailored advice.

If you have any more questions or need further clarification, please feel free to ask.

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