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Purchase and sales in cash

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Querist : Anonymous

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Querist : Anonymous (Querist)
21 September 2014 An assessee is a wholesale trader and having a turnover of Rs.1 crore.

He has made a purchase of goods for Rs. 500,000 and paid cash.

He made a credit sales of Rs.550,000 and received cash after one month.

What will be the tax implications under incometax act?
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
21 September 2014 cash sales - No issue

cash purchases - the only issue will be if he paid in excess of Rs 20000 to any party on any given day. in such circumstances such cash payment shall be disallowed
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CS,CA F,Numrologi TusharSampat

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CS,CA F,Numrologi TusharSampat (Expert)
24 September 2014 yes only cash purchases disallowed u/s 40A (3)
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