Loan and 269t contravention

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Anand

Self

54 Points Joined May 2012

I had lent Rs. 5 lakhs to a relative via cheque for helping with his business. There is no loan document but he has signed and acknowledged receiving the same and depositing the cheque.

Now, after 2 years, he has not returned the money to me as promised and we are not on speaking terms. I sent him a legal notice to which he claims he returned the money in cash as I demanded it in cash. This is false.

I am trying to file a civil suit for loan recovery. But my question is not about that, but related to Income Tax. In addition, can I also report him to the Income Tax u/s 269T and 271E as he claims to have returned money greater than 20,000 in cash? The alleged return is actually false - can I still mention it to Income Tax and force him to admit it is false.

Thanks.

Replies (3)

ANKIT CHOPRA

32 Points Joined September 2009

Yes there is a contravention u/s 269T

PRITAM JAIN, CA , CS

Practising CA CS

398 Points Joined September 2007

Originally posted by : Anand
	I had lent Rs. 5 lakhs to a relative via cheque for helping with his business. There is no loan document but he has signed and acknowledged receiving the same and depositing the cheque. Now, after 2 years, he has not returned the money to me as promised and we are not on speaking terms. I sent him a legal notice to which he claims he returned the money in cash as I demanded it in cash. This is false. I am trying to file a civil suit for loan recovery. But my question is not about that, but related to Income Tax. In addition, can I also report him to the Income Tax u/s 269T and 271E as he claims to have returned money greater than 20,000 in cash? The alleged return is actually false - can I still mention it to Income Tax and force him to admit it is false. Thanks.

You are right that he has contravened section 269T and section 68 (cash credit) of the Income Tax Act, 1961.

BUT since there will be contravrsial in your claims itself. On one side you are claiming that he has not paid any amount in cash and you are tryieng to file civil suit. on the other hand you claiming that he has paid amount in cash and tryieng to tap in Income Tax Act. In this manner you will prove yourself wrong.

Anyways tapping him in Income Tax will not benifit you at all. Fight your civil suit and recover your cash.