Violation of section 269SS of income tax act.
pkpworld..
(Querist) 05 November 2009
This query is : Resolved
Shopkeepter(owner of aHero Honda Show room)received a cash deposit of Rs.30000/- for advance o
A V Vishal
(Expert) 05 November 2009
Do you understand the provisions of 269SS
adv. rajeev ( rajoo )
(Expert) 06 November 2009
269SS regarding mode of acceptance, payment or reayent of loans/deposits. This section restrict the person to take/accept from any other person including depositor any loan or deposit more than Rs.20,000/- by cash. Such loan/deposit should be made/received thru., cheque only.
There are some expeceptions also.
pkpworld..
(Querist) 06 November 2009
Sorry due to power cut message was not appeared completely.
A Shopkeepter(owner of aHero Honda Show room)received a cash deposit of Rs.30000/- towards advance of a new model bike from a person. AT that time there was no stock of such new bike. After 4 month, geting new stock, the shopkeeper had given the new motorcycle to that person. The person paid final payment of Rs.18520/- .
My query is that whether the shopkeeper violates the provision of section 269SS by receiving a cash advance of Rs.30000/- from the person?
Vineet
(Expert) 06 November 2009
As understood from facts, the advance received is not in form of deposit or loan. it is an advance payment received in normal course of business against promise to deliver the goods. In fact, to support this claim, the goods have actually been delivered. Therefore there is no violation of section 269SS in this case.
A V Vishal
(Expert) 06 November 2009
No S 289SS is for Mode of taking or accepting certain loans and deposits.
269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,
(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit ; or
(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid ; or
(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b),
is [twenty] thousand rupees or more :
The point in the query is advance taken for sale of an article/thing/product and the amount received doesnot partake the character of a deposit or a loan hence 269SS is not applicable in the instant case.
pkpworld..
(Querist) 06 November 2009
Thanks Mr.Vineet and Mr.Vishal for convincing reply.
