Cash payment
This query is : Resolved
27 April 2012
one of my client purchased a plot of land amounting to Rs. 10 lakh by paying cash. is it attract any penalty section under I. Tax Act?
CA Prashant Gupta
(Expert)
28 April 2012
I think, if he is a individual not covered u/s 44ab and he can show the source of such cash, there is no problem.
But as cash payment exceeding Rs. 20,000/- is not allowed, he can face problem if assessment is made.
But as cash payment exceeding Rs. 20,000/- is not allowed, he can face problem if assessment is made.
28 April 2012
Thank you Mr. Gupta.
cash payment exceeding Rs. 20000/- disallowed under I.Tax Act for business expd. but under this situation the individual acquired capital asset i.e plot of land by paying cash. so, in my view it is nout of the perview of section 40)A)3.
Please comment.
cash payment exceeding Rs. 20000/- disallowed under I.Tax Act for business expd. but under this situation the individual acquired capital asset i.e plot of land by paying cash. so, in my view it is nout of the perview of section 40)A)3.
Please comment.
CA Prashant Gupta
(Expert)
28 April 2012
yes, it is sectioned covered for business & profession but the section does not specified that Rs. 20000/- is limit for business expenditure. I have seen the cases where A O has enforce the section, if assessee has business income and spend cash for personal property.
Till the case is not in scrutiny, you will not face any problem. all depends on how AO views the case.
Till the case is not in scrutiny, you will not face any problem. all depends on how AO views the case.
CA BIREN SHAH
(Expert)
28 April 2012
u can purchase land in cash.... there is no penalty if u purchase land in cash..
PAVAN RAJPUROHIT
(Expert)
30 April 2012
AGREE WITH BIREN SHAH
Prakash Kochar
(Expert)
01 May 2012
If the plot is purchased as stock in trade for business purpose it will be hit by sect40A(3), If purchased as investment no problem.
09 May 2012
Any investment is not considered as covered u/s 40A(3) and hence no problem
Prakash Kochar
(Expert)
17 May 2012
land purchased as stock in trade for business purpose in real estate business ( Not as investment in plot) will be covered u/s. 40A(3), as purchase cost is treated as expenditure for business.
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