ACCOUNTING ENTERIES

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This query is : Resolved

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This discussion examines whether an accounting journal entry can be made directly between parties (A receiving from C instead of B) without an actual cash or bank transaction. The consensus is that this is permissible with the consent of all parties involved and does not violate income tax or other laws. It also touches upon the implications for Form 3CD requirements regarding outstanding amounts.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

27 February 2023 MR. A IS PREPARING BOOKS OF ACCOUNTS
MR. A HAS TO RECEIVE 1000 FROM MR. B
MR. B HAS TO RECEIVE 1000 FROM MR. C

CAN MR. A DIRECTLY MAKE JOURNAL FOR TO MAKE RECEIVABLE FROM MR. C ?
WITHOUT BANK OR CASH TRANSCTION

IS THIS CORRECT ACCORDING TO INCOME TAX OR ANY OTHER LAW ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 February 2023 Yes, with the consent of B and C , A can make the entry.
No problem with income tax or any other law.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)

01 March 2023 FOR MORE BETTER CLEARITY
SUPPOSE MR. A HAS TAKEN UNSECUED LOAN FROM MR. B FROM BANK NOW CAN MR. A MAKE JOUNAL ENTRY TO PAY UNSECURED LOAN AGAINST FROM MR. B TO MR. C ? OR VICE-E-VERSA ?

IF YES , WHAT ABOUT CLAUSE 31a AND 31c OF FORM 3CD OF INCOME TAX ACT WHICH SHOWS OUTSTANDING ?

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