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Provisions of section 269ss

Sunil (Student) (48 Points)

19 November 2016

Whether the cash deposits in the bank account by an assessee from the cash receipts from her husband in excess of Rs. 20,000/- would attract the provisions of section 269SS.

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5 Replies

Ca Purushottam (Teaching IPC - COST&FM and CA Final - Advanced Management Accounting) (167 Points)
Replied 19 November 2016

no it is applicable on loan and advances and specified sum talenn for as an advance for immovable property .

Sunil (Student) (48 Points)
Replied 20 November 2016

In this case, the assessee`s husband withdraws money from her OD account in cash more than Rs. 10 lacs and give it to his wife, who in return accepts the cash and deposit the same in her bank account and subsequnetly withdraws the whole amount next day. I am of the view in the present case the assessee has accepted the deposits from her husband in cash, which is the clear violation of section 269SS of the I.T. Act. However, the assessee did not submit any reasons for the withdrawal from her bank account.

Member (Management) (325 Points)
Replied 20 November 2016

The query is not clear. I presume that the money was withdrawn from husband's account, given in cash to his wife who deposited it in her account and then withdrew the same. How is it that the money was not directly deposited in her account? The data is insufficient and the facts are not clear. Is the lady also into business? Under certain conditions, it may be possible to infer that a loan has been given and it is possible to invoke 269SS.

Sunil (Student) (48 Points)
Replied 20 November 2016

the issue is money was withdrawn from husband`s account, given in cash to his wife, who deposited it in her account. The lady had made some transactions during the year in share trading and shown loss from such trading. Her case is selected on the issue of large cash deposits.