section 69

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shelley (Querist)
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20 December 2009 If during the year husband gives Rs. 10 to his wife for construction of residential house. But out the amount kept for construction, she invest a sum of Rs. 4 lac in her firm and after few days later she withdraws money from her bank and put back the amount of Rs. 4 lac to be used in construction.
-Whether it will be treated as cash loan from husband to wife/ or it can be treated as unexplained investment.
-Whether it is merely a temporary use of money in her hand and would be treated as explained without any serious consequences.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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21 December 2009 I take Rs.10 in the first line of the question as Rs.10 Lacs.

Shelley; please do not make silly mistakes!

( I hope you will enjoy the above comment).

1. It is not clear whether the first loan of Rs.10 Lacs was taken by account payee cheque or not.

If she took loan by account payee cheque; then it will not amount to cash loan.

If not; it will be treated as cash loan and penalty may be levied u/s 269SS which is equivalent to the amount of loan !

However; since it is used for house property purpose hence penalty; if levied; may be dropped in appeals looking to the genuineness of the loans because house property is used by husband also and there is no intention of avoidance of tax. Although once penalty is levied; it is not so easy to get rid of from it.

shelley

shelley (Querist)
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21 December 2009 thanks for reply.
In fact amount was given in cash for building construction and household expenses. His wife just took cash kept for expenses and invested in his firm.But after few days he put the money back. All this was without the knowledge of her husband.
-whether it is just a temporary use of money in his possession and not a loan.

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