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Cash receipt transaction

sweety (Company Secretary cum Manager Accounts) (30 Points)

05 October 2016

Kindly let me know the way out to clear the balance standing in cash ledger of Rs. 8 Lakh which was received in Apr.16 towards web designing services provided by Company A Ltd. to Mr. X. At present no hard cash of Rs. 8 Lakhs is available with A ltd. so please suggest how to rectify this issue.

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8 Replies

Kajal Jain (Freelancer-Chartered Accountant) (551 Points)
Replied 05 October 2016

if actual cash was received...thn where has this cash been utilised ..

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ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 05 October 2016

definitely those 8 lakh had been utilised somewhere and no corresponding entry has not been made. Find out the outflow of cash.

sweety (Company Secretary cum Manager Accounts) (30 Points)
Replied 05 October 2016

As per IT Act, I think there wont be any probelm in receipt of cash more than 20K. Ceiling is for payment and not for receipt? Please correct if I am wrong

Rahul Shah (Assistant Chartered Accountant) (196 Points)
Replied 05 October 2016

as per the IT act , Cash Receipt of Rs 8 Lac in case of yours ,But Be prepared to Justify the Source of Cash Receipt if ask by the Department.

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sweety (Company Secretary cum Manager Accounts) (30 Points)
Replied 05 October 2016

What sort of docuemnts can be presented to department to justify the source if any query raised by departemnt in future?

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Kajal Jain (Freelancer-Chartered Accountant) (551 Points)
Replied 05 October 2016

purpose of transaction
party confirmation

Rahul Shah (Assistant Chartered Accountant) (196 Points)
Replied 05 October 2016

well it depends solely Depend upon intention of AO or Income tax authority & department might take call to considered as income & Direct co to pay tax on it u/s 69 of the Income tax act as unexplained deemed income.