24 March 2009
The balance of an unsecured loan as on 1st April 07 was Rs. 2,00,000/-. An additional loan of Rs. 10,000/- was taken on 1st June 07 in CASH. A sum of Rs. 10,000/- was repaid on 30th September 07 in CASH.
Does it amount to violation of section 269SS & 269T of the I. T. Act?
Am I liable to pay penalty u/s 271D and 271E of the I. T. Act?
If yes, what would be the amount of penalty imposable?
What if the amount (Rs. 10,000/-) is shown as a temporary advance?
25 March 2009
Yes. You have violated section 269SS and section 269T. Once your loan balance exceeds Rs.20000, no transaction of acceptance or repayment can be done in cash. Penalty is leviable if imposed by Joint Commissioner, but can be dropped. You cannot escape the liability even if you show the amount as temporary advance.
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