Question And Answer
Subject: When cash receipts are added as cash credits , whether provision of section 269ST is applicable ?
Querist: I Satish Kumar
Answered by:
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Date: May 15, 2021
Query asked by I Satish Kumar

If additions are made of more than Rs. 2 lakhs, under section 68 for cash credit or section 56 for gift received, whether section 269ST can also be applied by the AO and say there is violation of this section?

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Answer given by

No , Section 269T cannot be applied .

Note : In DIT(E) v. Young Men Christian Association (2014) 227 Taxman 31(Mag.)(Mad.)(HC) the Court held that , once an amount has been subjected to tax u/s. 68, the question of treating it as a transaction in violation of S.269SS or S.269T does not arise as it stands mutually excluded .Also refer Diwan Enterprises v. CIT [2000] 246 ITR 571 (Delhi ) (HC) CIT v. Standard Brands Ltd. [2006] 285 ITR 295 / 155 Taxman 383 (Delhi)(HC)
Dr. K. Shivaram Senior Advocate

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One comment on “When cash receipts are added as cash credits , whether provision of section 269ST is applicable ?
  1. Satish Kumar says:

    Sir, thank you very much for the reply. I agree that though sections 269SS and 269ST stand on different footing, once cash credit is treated as income under section 68, it is my own money brought into the books. Therefore there is no question of receiving it from others to attract section 269 ST. But I don’t know if this logic can be applied to section 56. Here receipt is acknowledged. Reading of section 269ST shows that even when income is received in cash, section can be applied. Because it talks of receipt in connection with one transaction or event.

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