Deposit in cash above rs. 20,000

Dear All,
In my case of Tax Audit, the assessee is accepting terminal / Security deposit for security of terminals (computer for online business e.g. lottery) provided to customers in CASH exceeding Rs. 20,000/-. It in not in nature of loans accepted. Further terminal deposit is also accepted for any debit balance of customer if remaines unpaid. I want to know whether the assessee is breaching Section 269SS which states that any deposit above Rs. 20,000/- should in through account payee cheque or draft.