Negotiable instruments act 1881
Querist : Anonymous
plzz give an example...:(
When a bill of exchange is drawn, accepted, or endorsed without consideration, it is called an “accommodation bill”.
.
Example : Ram is need of Rs.50,000/-. He asked his friend Mohan for borrowing the amount.
.
Mohan may not be in a position to lend but agrees that Ram may draw a bill on him, which he would accept.
.
If Ram's credit is good, he would get the bill discounted with his banker.
.
On the due date, Ram would pay Rs.50,000/- to Mohan, and such amount is deposited by Mohan with Ram's Bank against the discounted bill .
.
The person who signs, accept or endorses a bill without receiving any consideration is said to have lent his name to an ‘Accommodation Bill’ so here Mohan is Accommodating Party.
.
The person who so draws bills, in this case Ram is, “Accommodation Party”.
.
Querist : Anonymous
Click here to login now
Similar Resolved Queries
- Taxable or Tax exempt
- CAPITAL GAIN BASE ON NOTIFICATION
- TDS Deducted AY-2013-14 Not Reflected in 26as
- Demand Outstanding AY 2013-14 TDS Deducted not shown in 26as
- ADVANCE PAYMENT OF ADVOCATE
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Query – TDS on purchase of land from NRI under Income-tax Act, 2025
- Condonation . E-Verification of last year return .
- CREDIT NOTES WITHOUT GST
- Eway bill generation from place other than registeted
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
