Unsecured loan decline Books audit

Applicability of Tax Audit under section 44AB

A taxpayer must mandatorily undergo a tax audit of his/ her books of accounts if the sales, turnover, or gross receipts exceeds Rs 1 crore in a financial year. 

The threshold limit of Rs 1 crore is proposed to be increased to Rs 5 crore with effect from AY 2020-21 (FY 2019-20. The following condition applies to the taxpayer’s cash receipts and payment:

1. cash receipts are limited to 5% of the gross receipts or turnover 
2. cash payments are limited to 5% of the aggregate payments

A taxpayer might have to comply with tax audit provisions under other scenarios as well. The following are all such scenarios in which an income tax audit is mandatory:

Scripbox source

Unsecured loans (>=20,000) in the form of cash cannot be accepted by anyone as per section 269SS of IT Act. Consequence of violation is 100% penalty. That's why CA has not allowed the same. However, this restriction (in your case) is not applicable if such receipt is a trade advance (such as advance from debtor in connection with sale of goods/services), subject to the provisions of section 269ST.