Regarding applicability of 269SS of Income Tax Act.

Dear XYZ,

According to the Income Tax Act 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 other wise than by an account payee cheque or account payee bank draft.

First In this matter providing loan cash more than 20,000 is invalid. and

Secondly in this matter the burden of proof is on plaintiff not on defendant.

The provisions of section 269SS apply to rceipient of cash loan. In this case receipient is denying any loan, so there is no chance of invoking this provision. No case is made out against plaintiff.

An income tax evasion case could be made out against plaintiff regarding source of cash which he claims to have advanced to defendant. However, the same is very week in your own admission, him being a big farmer who would easily link the same to exempt agricultural income.

Your case is against the recovery of loan amount of Rs. 75000. The said amount was given against a promissiory note. Therefore, you have to prove the said promissory note. The sec 269SS is applicable only for Income tax matter and not for civil suite. The sec 269SS prohibit to accept the loan. Therefore, there is no ban to give the amount in cash for loan. If any person make the complaint to Income-tax department, the sec will not hit your client but hit to defendant.