• NI Act

25 L given to my friend.P Note and cheque given.Cheque filed in court.At present proceeding s going on.next my witness is not recorded.Accused witness is cheque stolen by me.Amount not shown in 2015-16.Returns not filed yet.After witness by me to Mejestrate,Any problem in Income tax act in further proceedings in this matter.please give me your valuable suggestions.Thanking you.
Asked 6 years ago in Income Tax

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Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

As I understand, your case is like this:

You've lent Rs 25 L to your friend by taking a Cheque from him and Promissory Note. As the cheque is bounced, you filed a case in your local u/s 138 of the Negotiable Instruments Act. In the court proceedings, your friend alleged that you stole his cheque and presented it for payment. Now your deposition is pending before the court.

You did not disclose the loan amount in your books and you have not filed your IT returns.

If my understanding of your case issue is right, the following issues merit consideration:

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1) If the payment of Rs 25 L to your friend is made by cheque/NEFT, you have a proof of payment. If, on the other hand, you gave the loan in cash, you may not be able to prove the loan. Even if you prove, your friend would have violated the provisions of Section 269S of the income Tax Act, under which borrowings in cash in excess of Rs 20,000/- attract penalty. If you gave the loan on or after 1st April 2017, you would have violated the provisions of Section 269ST of the Income Tax Act, whereby any transaction in cash for Rs 2 Lakhs or more is illegal and attracts penalty of equivalent amount.

2) If you are a business person, you need to maintain books of account reflecting the transaction. If you have not done it, you may do it now.

3) File all your returns and regularise your compliance with the provisions of the Income Tax Act, as otherwise the cost of non-compliance will be very high.You better take professional help for filing your IT returns properly.

B Vijaya Kumar
CA, Hyderabad
1001 Answers
124 Consultations

5.0 on 5.0

Hi,

It appears that you gave a loan of Rs. 25 lakhs to your friend, and received a P Note and a cheque. Your friend is now claiming that you stole his cheque and he never took any loan.

From a tax perspective, the tax department does not receive information based on cases filed by you. However, if they do come to know and you had not filed any returns, then they can issue a notice to you. While giving the loan if there was sufficient funds, on which you had paid taxes (though not filed return), then there will not be any major issue to you. If no taxes have been paid, then it is advisable to file your tax return and pay due taxes on all your income.

If you had given the loan in cash after 1 April 2017, then the department can levy a penalty for cash transaction. The penalty will be equivalent to the amount of loan given by you.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

Hello,

It was very difficult understanding your query. Could you please inform as to who gave the cheque to whom and what happened in the end. was the cheque dishonored or the loan not paid back etc etc.

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

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