Opinion Of Eminent Legal Luminaries On Controversial Issues

Mode of undertaking transactions.

QUERY: If an invoice of Rs. 5,00,000/- of jewellery is adjusted by exchange of old gold worth of Rs. 3,00,000/- and balance Rs. 2,00,000/- is paid off in cash is hit by section 269ST?
ANSWER: Section 269 ST is inserted by the Finance Act, 2017 w.e.f. April 1, 2017 i.e. effective from Assessment Year 2017-18.
The object for introducing this provision has been explained in the Memorandum Explaining the Provisions relating to Direct Taxes. The Memorandum states that in India, the quantum of domestic black money is huge which adversely affects the revenue of the Government creating resource crunch for its various welfare programmes. Black money is generally transacted in cash and large amount of unaccounted wealth is stored and used in form of cash.
In order to achieve the mission of the Government to move towards a less cash economy, to reduce generation and circulation of black money inserted section 269ST in the Act to provide that no person shall receive an amount of two lakh rupees or more –
a) In aggregate from a person in a day; or
b) In respect of single transaction; or
c) 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 through a bank account.
Thus, from reading the fact it is clear that jewellery worth of Rs. 5,00,000/- is adjusted by exchange of old gold worth of Rs. 3,00,000/- and balance Rs. 2,00,000/- has been paid by cash. Thus the provisions of section 269ST are clearly applicable.

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