TaxTMI 
TaxTMI 
whether share application money can be received in cash , amount exceeding Rs.20000. whether Section 269SS applicable.
share application money
01 Jul 2010 
2 Replies 
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Cash prohibition on share application money under Section 269SS may apply, with conflicting high court rulings affecting compliance.
Whether cash receipt of share application money falls within the statutory prohibition on specified cash transactions is disputed. One position treats application money as refundable where allotment has not occurred and outside the prohibition; contrary authority treats such receipts as covered, exposing recipients to penalties under the tax penalty framework. The legal position is unsettled and depends on characterization of the payment and conflicting court rulings. (AI Summary)
Whether cash receipt of share application money falls within the statutory prohibition on specified cash transactions is disputed. One position treats application money as refundable where allotment has not occurred and outside the prohibition; contrary authority treats such receipts as covered, exposing recipients to penalties under the tax penalty framework. The legal position is unsettled and depends on characterization of the payment and conflicting court rulings. (AI Summary)