Sec 269SS and Sec 269T

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Jomon P B (Querist)
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17 September 2019 ABC Pvt Ltd, a finance company had made a Gold Loan Advance of Rs 25000 in cash to customer on 10/08/2019 and the Customer Repaid it in cash amounting Rs 28500(including interest) on 10/09/2019.
1. Provide Expert opinion on Applicability of Sec 269SS and 269T on the above transaction.
2. In above transaction, which person will be held liable for the Sec 269SS and 269T (company or Customer)?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2019 Section 269SS prohibits a taxpayer from taking/accepting loans or deposits or a sum of more than Rs.20,000 in cash. All loans and deposits of more than Rs.20,000 must always be taken through a banking channel.
1 Yes both sections applicable on the above transaction.
2 Company is liable and customer is liable if he is a tax payer.

Jomon P B

Jomon P B (Querist)
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17 September 2019 Ok, sir.
How a company is liable???
As per Sec 269SS, 100 % is for a person who is accepting or taking a loan more than Rs 20000.
As per Sec 269T, 100% penalty for person repaying the loan in cash more than Rs 20000.
Here the company is paying the loan in cash to the customer. So Sec 269SS is applicable only to the customer.
And on repayment of Rs 20000, Sec 269T is applicable only to the customer.
Kindly advise.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2019 Yes agreed with you only customer is liable.

Jomon P B

Jomon P B (Querist)
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18 September 2019 Thank you, sir.................

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