Cheque bounce-non declaration of money in i t.wheteher compl

Both these issues are ordinarily no problem if there is other relaible evidence to prove that the money was actually given.

1) 20000/- rule is for the borrower and not the lender. This rule is not absolute.

2) IT return is fault of lender but on this issue alone the borrower can not eascape the liability.

THE EXISTANCE OF FUNDS CAN BE SHOWN FROM EARLIER INCOME.OR BORROWING FROM OTHERS.

BUT STILL IT WILL DEPEND ON  ALL OTHER CIRCUMSTANCES AND PLEADINGS.

Accused plea/objections that loan amount has not been declared in Income Tax return and advanced amount is more than Rs 20000/ which should have been paid through cheque or demand draft  are not tenable .As per sec 289 of Income Tax Act if  any amount lent /advanced to any one not reflected in I.T.return than department may impose penalty on him but it does not say that "if money is advance in contravention of Income Tax Act,it would be unrecoverable.

       accused had issued the cheque against legally enforceable debt so he is liable for consequences for cheque bouncing.

Yes above both Experts are right, it can be little of evidence that his demand in ingenuine and imaginary but you have to prove further in addition that you dont have any liabilty towarts him, he is telling lie in regard to his claim and he dont have any documentary evidence in support to his claim. 

It all depends how the accused side handles the case. Much will depend on cross examination of the complainant. 

If it can be proved that there were no earlier transactions , complainant has no financial capacity and MOST IMPORTAND the accused is having businsess so following IT act provisions will be attracted to him.

following is the portion of a SUPREME COURT CITATION quoted by many HIGH COURTS.

19. The courts below failed to notice that ordinarily in terms of Section 269SS of the Income Tax Act, any advance taken by way of any loan of more than Rs. 20,000/- was to be made by way of an account payee cheque only.

Section 271D of the Income Tax Act reads as under:

271D. Penalty for failure to comply with the provisions of section 269SS. (1) If a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissior.

HOWEVER IT WILL NOT BE APPLICABLE IN ISOLATION . THE DEFENSE MUST CREATE PROPER FOUNDATION IN CROSS.