Help me Urgent-269SS

Tax queries 463 views 2 replies

CA Parth Jain

185 Points Joined June 2009

Hiii Freinds

one of my client had taken a loan from his wife in cash Rs. 5,00,000,his wife has only agriculture income bt he is earning both agricuture as well as non agriculture income.

my query is that should he is imposible for penalty u/s 269SS/ 269T ?

is there any provision that loan given to related party,loan is accounted in books and loan taker use it for buying personal assets then no penalty ?

his wife has no books of accounts bt he himself accounted dis loan in his books,he used the money for buying a plot.

matters are pending in scrutiny ....plz help me frnds asap

Thanks in advance

Replies (2)

Priyank

Learner

98 Points Joined December 2009

Dear Parth,

Since Husband is earning taxable income, he shall not be covered by the exception provided by provisio to Section 269SS.

Further, Reasonable cause u/s 273B can be reasonably said to be a cause which prevents a man of ordinary prudence and average intelligence, acting under normal circumstances, without negligence or inaction or want of bona fides. In my opinion, there seems no reasonable cause for entering into said transaction.

In this case, if the husband is not under any obligation to repay the sum i.e this amount was gifted by wife due to natural love and affection. Then it does not fall under the definition of "Loan or deposit", so as to be out of the ambit of section 269SS & 269T.

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CA PARAS BAFNA

Practising CA

33428 Points Joined April 2009

Whether the Plot is purchased in joint name ? Ans may be NO........

Whether the amount received from wife can be shown as advance received against sale of his own Agriculture Land to her ? Ans -Depends upon his land holdings.

Whether the amount received from wife can be shown as advance received against any other fixed asset if there be any ?

Verify such possibilities as loans or deposits are different than such advances.