Mr. Kamlesh borrowed on hundi, a sum of ₹3,75,000 during May, 2020 by way of a bearer cheque. He partly repaid ₹1,50,000 on 01.12.2020 by way of bearer cheque. Examine the consequences of said transactions.

It has been provided u/s 69D of the Income tax Act, 1961, that if any amount is borrowed on a hundi or any amount due thereon is repaid other than through an account payee cheque, then the amount so borrowed or repaid shall be deemed to be the income of the person for the P.Y. in which the amount was borrowed or repaid, as the case may be. It has been further stated u/s 69D of the Income tax Act, 1961, that if any amount borrowed on hundi has been deemed to be the income of any person, he will again not be liable to be assessed in respect of such amount on repayment of such amount. Thus, if ₹3,75,000 were borrowed by Mr. Kamlesh through a bearer cheque, the same would be taxable as his income u/s 69D during the PY 2020-21 and repayment made subsequently of ₹1,50,000 will not have any effect. Income u/s 69D will be taxable @ 60% + 25% Surcharge + 4% HEC.