Rent received in cash by landlord

Hi Experts,

Assessee received monthly rent of more than Rs.20000 in cash during fy 2016-17. Now AO in his ongoing proceeding noticed the assessee that " you have received the amounts more than 20K and your receipt may be treated as unaccounted cash deposit into bank". In response, it was replied to AO that the same receipt is not under the purview of sec 269SS or sec 40A(3), and the income received    in cash had already been taxed under house property, but the AO is still in the wording of (or otherwise) 269SS. Apart from withdrawal from partnership, AO is concentrating the cash receipt of rent. Now, what will be the appropriate solution with that effect.

Replies (8)
Get a certificate/ confirmation from tenant payer with his PAN No and also show Rent agreement

Submit a letter explaining cash receipt of Rent and further state ITO's refusal to accept this.

Solution will lie with what order AO passes.
Receiving rent in cash is not barred by any sections of the act . so no need to worry about the same. just say to the ao that the rent receipt is not in the nature of loan or deposit or specified sum and hence the provisions of section 269ss will not applicable

Hi this was already replied that the rent rec ived in cash does not under the purview of sec 269ss...but the AO still arguing on the wording of specified sum (OR OTHERWiSE). He wants to apply OR OTHERWiSE includes all types of receipts may be other than loans, deposit, advances. In spite having repeated argument that or otherwise is limited to the category of loans, advances or deposits, he is not in agreement with me.

The specified sum is defined as -
"specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.

Please show this and try to explain.
Submit a letter with reasoning and mention insistence by AO to apply wrongly 269SS.
Get a copy of this submission.

If AO agrees then well & good. Otherwise appeal option after AO Order.
If it's the case then leave it. Let the ao do whatever he likes. Only thing he can do is referring your case for initiation of penalty proceedings under section 271D. Apart from that he can't do anything
If AO doesn't agree and apply 269SS then as per process ...

Any penalty imposable under 271D shall be imposed by the Joint Commissioner.

Yes, I am also trying to let him understand that the word "or otherwise" used for the purpose in relation to transfer of immovable property.

If you received monthly rent in cash exceeding Rs. 20,000 during FY 2016-17, it's understandable that the AO raised concerns about unaccounted cash deposits.

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