loan under section 269SS& 269T

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varun jain (Querist)
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14 July 2009 Please clearify the following in the light of Section 269SS 269T of the Income Tax Act,1961:

1.Mr.A takes a cash loan of Rs.19000 from B on 20.04.2008 and repays it in cash Rs.19000 on 20.08.2008.
Mr.A again takes a cash loan on 18.04.2009 of Rs.18500 from B and repays it in cash of Rs.18500 on 21.05.2009.

Whether there is any voilation of Section 269SS & 269T?

2.Mr. C takes a cash loan of Rs.19000 and by cheque Rs.22000 from B on 20.04.2008 and repays it in cash Rs.19000 on 20.08.2008 and by Cheque Rs.22000.

Whether there is any voilation of Section 269SS & 269T?
I request you to please give the answer in detail with the relevant provisions? I am not able to understand the provisions of section 269SS & 269T.
Thanks in advance

CA.PRAMOD KUMAR PANDA

CA.PRAMOD KUMAR PANDA (Expert)
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14 July 2009 In the first case, there is no violation of Section-269SS, since the receipts and repayments of loans are less than Rs.20000/- and corresponds to different assesment year, i.e.,2009-10 and 2010-11.

In the second example given by you, the receipts of loan in aggregate is more than Rs.20000/- Mr. A received the second loan from Mr. B by cheque, hence no violation. But while repaying the loan the aggregate amount outstanding was Rs.41000/-. The repayment by cash on Dt.20.08.2008 amounting to Rs.19000/- violates the provision of Section269SS.

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varun jain

varun jain (Querist)
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14 July 2009 it means as soon as loan amount exceeds from singal person Rs.20000 no cash payment can be made.
In second case if A pays Rs.25000 in cheque in 2009-10. now the closing balance Rs.16000 on 31.03.2010.This balance remain unchanged upto 31.03.2011. assessee makes payment in cash of Rs.16000.00 in 2011-12.There should not any bar on payment less than 20000/.
However as per your explantion no payment in cash is allowed as soon as loan amount Exceeds Rs.20000/- which seeems unjustified.Please explain it in detail

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CA.PRAMOD KUMAR PANDA

CA.PRAMOD KUMAR PANDA (Expert)
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04 August 2009 Sorry. I was late in attendiing to the querry raised.
Please refer and read Clause (a)(b) and (c) of the Section-269SS throughly. It speaks
1.The amount of such loan or deposits or the aggregate of such loan or deposit.
2.refers to amount outstanding/unpaid amount whether fallen due or not on the date of taking or accepting such loan or deposits, and
3.It speaks about aggregate amount as refered to in clause (a) and clause(b), which should not exceed Rs.20000/-.

I think, you will be clarified on a analytical reading of the provision of Section-269SS from the Bare Act.