Cash transactions in immovable property u/s 269SS & 269T

One Step ahead to curb black money by covering cash/bearer cheque transactions in purchase/sale of immovable property u/s 269SS & 269T

The existing provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit if the amount of such loan or deposit is Rs.20,000/- or more, except through account payee cheque or account payee demand draft or through online transfer through a bank account.

However, certain exceptions have been provided in the section.

Similarly, the existing provision contained in the section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid if the amount of loan or deposit is Rs.20,000/- or more except through account payee cheque or account payee demand draft or through online transfer through a bank account.

In order to curb generation of black money by way of dealing in cash w.r.t immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as to provide that no person shall accept from any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer amount of such loan or deposit or such specified sum is Rs.20,000/- or more, except otherwise than by an account payee cheque or account payee demand draft or by electronic clearing system through a bank account. Continue reading

No section 271(1)(c) penalty on mere Disallowance of claim

Mere Disallowance of claim cannot be made the basis for levying Penalty under section 271(1)(c) of the Income Tax Act.

As per section 271(1)(c) of income tax act, 1961, assessing officer or CIT(A) or CIT in the course of proceedings under this Act may impose penalty in the range of 100% to 300% of the amount of tax sought to be evaded. The penalty can be impose if he satisfy that any person concealed the particulars of such income or furnished inaccurate particulars of such income. This penalty is in addition to the tax payable by assessee.

Further, there is also a concept of deemed concealment laid down under explanation 1 to section 271(1)(c). the explanation 1 is triggered when the person :-

  1. Fails to offer an explanation or
  2. Offers an explanation which is found to be false, or
  3. Offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him],

So the question is mere the claim made by a person in his return which disallowed by revenue, is comes under the ambit of section 271(1)(c) / explanation 1 of to section 271(1)(c). Continue reading