Violation of Sec269SS

[Kshitiz Chhawchharia]

A Pvt ltd co. has taken more than than Rs 20000/- as share application money in Cash. Will this tantamount to violation of Sec269SS and penalty proceeding u/s271D be initiated?

AI Summary

Company Faces Potential Penalty for Cash Share Application Money Under Section 269SS; Experts Advise Bank Transactions A private limited company received more than Rs 20,000 as share application money in cash, raising concerns about violating Section 269SS and potential penalty under Section 271D. One respondent explained that share application money is not considered a loan or deposit under these sections, provided the company can prove the genuineness and source of the funds. Another respondent advised against cash transactions for share applications, suggesting that doing so through bank channels is safer. They noted that cash transactions could be scrutinized by the Assessing Officer, who might classify them as loans or deposits, potentially leading to penalties.