Assess sec 44ada I.t. return filed person cash receipts transaction below mentioned in f.y.19-20.
1.dt:10-07-2019 cash loan received from old debtor Rs:1,90,000/- single day through on cash mode.
2.dt:20-08-2019 cash loan received from old debtor Rs:1,80,000/- single day through on cash mode.
3.dt:10-09-2019 cash loan paid to new debtor Rs:3 lacs single day through on bank mode.if same debtor cash loan received Rs:1,90,000/- same day single transaction cash mode received.
Assess above mentioned all cash transactions allowed in I.t. act.sec 269 st and sec 40a(3) applicable in I.t. act.
Key points of your question are:-
- Assessee is professional opted for presumptive taxation u/s 44ADA.
- Assessee received & paid cash loan of Rs. 190000/- and 180000/-in FY 19-20.
- Assessee paid loan of Rs. 300000/- through bank mode.
And your question is about section 269ST and 40A(3).
Section 269ST :- Above transactions have not violated section 269ST as single cash transaction is below Rs. 2 lakh. And transaction of Rs. 300000/- is through bank mode. (assuming that this transaction is through account payee cheque or an account payee bank draft or use of electronic clearing system)
Please note that as per section 269ST, No person shall receive an amount of two lakh rupees or more—
in aggregate from a person in a day; or
in respect of a single transaction; or
in respect of transactions relating to one event or occasion from a person,
otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.
Section 40A(3):- Above transactions have not violated section 40A(3) as these transactions are cash loan and these are not expenses to be claimed as deduction from income. Further assessee is opting 44ADA where 50% of gross receipts is presumed as income and there is not issue of claimed deduction.
Expenses or payments not deductible in certain circumstances
As per section 40(A)(3) Where the assessee incurs any expenditure in respect of which a cash payment (otherwise than by an account payee cheque drawn on a bank or account payee bank draft, or use of electronic clearing system) is made to a person in a day exceeds Rs. 10000/- (wef AY 2018-19, previously this was 20000/-) then no deduction shall be allowed in respect of such expenditure.
But please note that above transactions taken by assessee have violated section 269SS & 269T, in receiving & repaying cash loan more than Rs. 20000/-. For violation of section 269SS & 269T, penalty amount equal to the value of transaction can be imposed if your case is not covered in any of the following exceptions of section 269SS;-
Exceptions to Section 269ST
- Any loan or deposit or specified sum “taken or accepted from” or “taken or accepted by” the following entities –
a. The Government
b. Any banking company, post office savings bank or co-operative bank
c. Any corporation established by a Central, State or Provincial Act
d. Any Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013)
e. Any institution, association or body or class of institutions, associations or bodies notified in Official Gazette
Thus, if any person accepts any loan or deposit or specified sum from the above-mentioned entities, or the entities accept any loan or deposit or specified sum from any person, provisions of 269SS will not apply.
- A person earning only agriculture income accepts loan or deposit from another person also earning only agriculture income
- Receiving cash from relative during emergencies. Here intention should not be to evade the taxes.
- Partners contributing cash capital into partnership firm
Exceptions to Section 269T
A person paying Rs. 20,000 or more towards repayment of loan or deposit does not have to comply with 269T if he pays to the following parties –
a. The government,
b. Any banking company, post office savings bank or co-operative bank,
c. Any corporation established by a Central, State or Provincial Act,
d. Any Government company as defined in section 617 of the Companies Act, 1956,
e. Other notified institutions