Clarity about the 269s and 269t

308 views 6 replies

durgaprasad

accounts executive

225 Points Joined June 2015

As per the section of 269S and 269T applicable for Cash deposits or repayment of loans more than Rs.20000/-. I have some query about these sections. If one customer has given advance on oneday and we made a bill on some value for adjustable of advance amount and there is a balance of advance amount to be repay the customer. In this case on the above the sections are applicable or not: 1. In point of my view, it is not a deposit , advance amount is genuine business transactions and repay the balance amount is not a loan. 2. If we can repay the balance amount more than Rs.10,000/- through the mode of cash

Replies (6)

Sumeet

537 Points Joined April 2012

Section 269SS & 269T covers Acceptance & Repayment of Loan/Cash Deposits. Since you mentioned it is a genuine business transaction where you have given sale bill for some amount and repaid the balance amount in cash, you are rigtht in saying that 269SS & 269T will not be attracted. You can also repay the balance amount in cash even though it is in excess of 10,000. However it will be default u/s 40A(3) on part of other party making the payment if the payment is of the nature of Revenue or Capital Expenditure.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208788 Points Joined July 2016

Trade deposits are included in the definition of Deposit for the applicability of section 269SS. Generally, trade-deposits are accepted or given to fulfill the heavy demand of certain commodity. So, it is pertinent that such deposits are in the nature of advance. In such cases, on account of failure to meet demand, the person who had received the advance is under a legal obligation to return it. When deposits are taken, certainly it has to be returned after certain period of time. This view was taken by Allahabad High court in the case of Chaubhey Overseas Corporation v. CIT [2008] 303 ITR 9 (ALL).

Refer: https://www.topcafirms.com/index.php/white-paper/6188-taking-or-repayment-of-loan-in-cash-analysis-of-section-269ss-or-269t