point to be consider while performing tax audit for verfying aplicability of sec 269S & 269T

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Any loan or advances exceeding Rs 20000 accepted in cash covered u/s 269SS & Repayment of Loan or advance Exceeding Rs 20000 in cash covered u/s 269T. 

Before conducting audit we must know the provsion of sec 269s&269t.

Sec 269S..Accepting of loan...Any loan or advance of Rs.20000 or excced taken otherwise than,cheque or draft is probited.

Penalty..u/s.271D..Taking or accepting any loan or deposit in contravention of provision of sec 269.penalty of Amount equal of amount of loan or deposit.

Sec 269T..Repayment of loan..Any repayment of loan or deposit of Rs20000 or more other wise than cheque or draft is prohibited.

Penalty..u/s271E..Amount of deposit so repaid.

so that we can accept or repay loan or deposit up to Rs19999 without contravention of provision of Sec269S/T.

while conducting audit we must strictly examine the compliance of provision of sec269S/T...and make report accordingly.

sec 269SS is applicable if any loan or deposit of Rs. 20000 and above is accepted  in cash.

Sec 269T is applicable where repayment is made by way of cash to any person who has provided loan / deposit of Rs. 20000 and above. Means even Amount repaid in cash is less than 20000 but if total loan amount is 20000 or more repayment will be goverened by Sec. 269T.

Agree with above views

further more the format of 3CD requires about the information of maximum amount outstanding during the year in loan a/c. So due care must be taken for that particularly when high frequency exist about incoming and outgoings from the a/c.

For getting the maximum amount outstanding at any time during the year, total scruitny of ledger account related to loan transactions is desirable.

 Sir 

section 269ss applies when loan has been accepted other than cash.

Please rectify me if I am Wrong.

My Query is for Respected CA. Ravindra Tiwari and CA. Subhash Kr.