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Company has taken cash loan from another company rs.5,00,000

Eswar Reddy S (CFO- at NHTF) (58270 Points)

28 December 2013

Hi all, One company has taken cash loan from another company Rs.5,00,00. Is it permissible under section 269S? If not permissible what is the accounting or incometax effect on the same ? Why it is not permissible ?

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5 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 28 December 2013

Cannot take loan in cash over Rs. 20,000/-

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Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 28 December 2013

Read full and give full reply

Mihir (Wealth Manager) (5293 Points)
Replied 28 December 2013

Not permissible u/s 269SS - cash loan/deposit above Rs. 20,000/-

The company shall be penalised equal to the loan amount u/s 271D.

You may ask the AO why is it not permissible.

Piyush (Partner at A J P & Associates) (35 Points)
Replied 28 December 2013

It is auditor's responsibility to report in tax audit in annexure of loan and the company will be penalise....

CA Dhruva Kalamanji (Chartered Accountant ) (1996 Points)
Replied 28 December 2013

Hi Eshwr, According to section 269ss no person shall take loan more than 20k other than account payee check or or account payee bank draft.if taken then it will be penalised as per section 271d. Why it is not allowed ? Logic behind would be because it may lead to money laundring