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loan or disposit given in cash

vinay sharma (CA final (Article)) (327 Points)

15 June 2010

any amount given to any person(individual) by any person(individual) in cash of sum rs.400000/- attract any penlty on the person giving loan....if yes then in which section ???

pls rply .......

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2 Replies

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 16 June 2010

Dear Vinay,

The transaction which u are asking for is a contravention of Section 269SS

Pls read the following section 269SS

⁵²[CHAPTER XX-B

REQUIREMENT AS TO MODE OF ⁵³[ACCEPTANCE, PAYMENT OR] REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX

⁵³[Mode of taking or accepting certain loans and deposits.

⁵⁴269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,—

(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit ; or

(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid ; or

(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),

is ⁵⁵[twenty] thousand rupees or more :

Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,—

(a) Government ;

(b) any banking company, post office savings bank or co-operative bank ;

(d) any Government company ⁵⁶ as defined in section 617 of the Companies Act, 1956 (1 of 1956) ;

(e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify ⁵⁷ in this behalf in the Official Gazette :

⁵⁸[Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act.]

Explanation.—For the purposes of this section,—

⁵⁹[(i) “banking company” means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act ;]

(ii) “co-operative bank” shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ;

(iii) “loan or deposit” means loan or deposit of money.]

& then pls read the penalty for the same which is mentioned below

⁷¹[Penalty for failure to comply with the provisions of section 269SS.

271D. ⁷²[(1)] If a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accep-ted.]

⁷³[(2) Any penalty imposable under sub-section (1) shall be imposed by the ⁷⁴[Joint] Commissioner.]