SHARWAN GOEL (CA) (35 Points)
07 July 2010One Real Estate Company gave huge sum in cash to some property dealers to buy land for them but unfortunately deal did not materialise and Property Dealer refund the same amount in cash to the company. What will be the consequences in Income Tax Act due to this Cash transaction in the hands of Company & Property Dealers
CA Shiv
(Business Controller)
(2987 Points)
Replied 07 July 2010
There is no impact on IT. you can show as advance given and taken back in books.......Try to show small cash entries.....both sides....
Amir
(Learner)
(4016 Points)
Replied 07 July 2010
Dear Sir,
Considering the amount in excess of Rs. 20,000 - Property Dealer has committed default as under -
1) u/s 269 SS - at the time of accepting
2) u/s 269 T - at the time of repayment
Tax Auditor needs to qualify Form 3CD
As a result penalty equivalent to 100% Loan/Advance shall be levied u/s 271D & 271E respectively
No consequences on part of Real Estate Company.
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8310 Points)
Replied 07 July 2010
| Originally posted by : Shivang | ||
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There is no impact on IT. you can show as advance given and taken back in books.......Try to show small cash entries.....both sides.... |
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i agree
CA Shiv
(Business Controller)
(2987 Points)
Replied 07 July 2010
There is no expense booked in books which can be disallowed.. so not to worry for that...
and sicne its a cash transaction, show in part part amount..... and amount settled in the same yeat... No disclosure required at the end of year also....
Shan Antony
(Industrial Trainee)
(243 Points)
Replied 07 July 2010
Amir
(Learner)
(4016 Points)
Replied 07 July 2010
Dear Friends,
With due respect I would like to draw ur attention to this case law -
Scope of the term ‘any deposit’ - The words ‘any deposit’ in section 269T have been used to cover all sorts of deposits and include ‘trade deposit’ also - Chaubey Overseas Corpn. v. CIT [2008] 170 Taxman 9/303 ITR 9 (All.).
https://www.thehindubusinessline.com/2008/08/16/stories/2008081650430900.htm
CA Shiv
(Business Controller)
(2987 Points)
Replied 07 July 2010
I agree to you Amir,
thts why i am saying to show in parts parts,,, Since its a cash transactions, we can change the dates and all... just to save from penalty....and pls tell what the huge amount means....
whats the quantum of cash deposit.... if turnover is not so high than chances of assessment will be every less.
CA Ravish Trivedi
(The Possibilities are Infinite...)
(772 Points)
Replied 07 July 2010
I agree with Amir comments. As both payment and receipt made in cash, therfore transaction can be nullified mutually in both parties books to avoid any further consequences.
Amir
(Learner)
(4016 Points)
Replied 07 July 2010
Dera Shivang Sir,
Pls refer the initial paras of the above link- Penalty cannot be escaped even if u break this transactions in parts.......
CA Shiv
(Business Controller)
(2987 Points)
Replied 07 July 2010
Amir,
Agree to u...
Now depends upton the AO to have penalty or not..
Thanks.....
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 07 July 2010
Faiz Ahmed Bachnak
(Accountant)
(44 Points)
Replied 07 July 2010
Question: From where you got such a huge amount of cash?
If you have withdrawn it from bank then deposit it back There will be no problem in Income tax as same amount has withdrawn and redeposited.
If you have got it from other sources not disclosed in accounts then keep it undisclosed.
CA Rohit Gupta
(Partner)
(1982 Points)
Replied 07 July 2010
Well I agree with Amir as regards the qualification by tax auditor u/s 269ss And Section 269T
Also to escape the penalty and other hassles from department follow Faiz advice. It is better to keep it undisclosed if possible.
regards
CA Rohit Gupta
| Originally posted by : Raveesh | ||
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I agree with Amir comments. As both payment and receipt made in cash, therfore transaction can be nullified mutually in both parties books to avoid any further consequences. |
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