what is meant by borrowing on hundi as given u/s 69D of income tax act?
pawan tewari ( ) (544 Points)
09 May 2014what is meant by borrowing on hundi as given u/s 69D of income tax act?
Deepak Gupta
(CA Student)
(15922 Points)
Replied 09 May 2014
| Originally posted by : pawan tewari | ||
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what is meant by borrowing on hundi as given u/s 69D of income tax act? |  |
The term “hundi” has not been defined in the 1961 Act. In common commercial parlance, it denotes an indigenous instrument in vernacular language which can be used by the holder thereof to collect money due thereon without using the medium of currency.
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It may also be regarded as an indigenous form of bill of exchange expressed in vernacular language which has been in use in the mercantile community in India for the purpose of collecting dues.
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There are numerous varieties of hundis, for example, darshani hundi, muddati hundi, shahjog hundi, jokhmi hundi, namjog hundi, dhanijog hundi, jwabi hundi and zickri chit. The characteristics of hundis differ according to the varieties of the same.
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The following characteristics are found in most of the hundis:
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1. A hundi is payable to a specified person or order or negotiable without endorsement by the payee.
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2. A holder is entitled to sue on a hundi without an endorsement in his favour.
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3. A hundi accepted by the drawee could be negotiated without endorsement.
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4. If a hundi is lost, the owner could claim a duplicate or a triplicate from the drawer and present it to the drawee for payment. Interest can be charged where usage is established.
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-- Circular No. 208 [F. No. 208/7/76-IT(A-II)], dated 15-11-1976.
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