Cash transaction
This query is : Resolved
27 March 2018
Sir,
In a public ltd co., In FY 201617,One of the Directors brings in cash Rs 34Lakhs for a land purchase in a single day. But the transaction is postponed. So the entire cash is deposited in company's current account in SBT by the accountant as per that director's instructions.
After 2-3 days the full amount Rs.34L is withdrawn in cash(via cheque& repaid to the director
What shall be the accounting treatment for the cash transactions in the Daily Cashbook to avoid any legal issues both for the director and the company?
We showed it as loan from director in cash& its repayment
Is it ok?
If its wrong,how to correct?
In a public ltd co., In FY 201617,One of the Directors brings in cash Rs 34Lakhs for a land purchase in a single day. But the transaction is postponed. So the entire cash is deposited in company's current account in SBT by the accountant as per that director's instructions.
After 2-3 days the full amount Rs.34L is withdrawn in cash(via cheque& repaid to the director
What shall be the accounting treatment for the cash transactions in the Daily Cashbook to avoid any legal issues both for the director and the company?
We showed it as loan from director in cash& its repayment
Is it ok?
If its wrong,how to correct?
CA R SEETHARAMAN
(Expert)
28 March 2018
In layman terms, cash loan or deposit from same person of Rs.20000/- or more is not allowable for the purpose of Section 269SS. On Contraventions penalty U/s 271D is attracted which is 100% of the amount received.
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