Section 68,69

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2014 A commission agent of cars. Receives cash from buyer and pay the same amount to car dealer for buy car for buyer.

AND

The other situation is

Commission agent receives cheques from buyer of car and paid the same amount in cash to car dealer to by the car for buyer.

Query is :- The above transactions are covered under 68 or 69 for addition in case of commission agent.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 February 2014 There should not be any problem in case 1 as you are not required to book these entries in your books of accounts. You just need to account for the commission you receive.

In this case, you can keep a memorandum account for the moneys received and expended on behalf of clients maintaining KYC records of such clients. Thereby absolving you of any unexplained credits issue! This specially becomes relevant if at the year end you have some cash received of clients in you hand!

Case 2 might be different because the cheque (if received in your name) would reflect in your books. Now, if the cash cannot be accounted for, then the situation becomes a bit tricky! then you need to explain the source of this cash. Here section 69A can come into play. So if you receive cheque and then pay by check only.

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Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2014 Sir,

In case 1 :- if agent receives cash from buyer and pay cheque to car dealer. Then what will be the impact

Nikhil Kaushik

Nikhil Kaushik (Expert)
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23 February 2014 see receiving cash is not an issue as long as it is properly accounted for.

Querist : Anonymous

Querist : Anonymous (Querist)

23 February 2014 Sir,

It will credit in books as the explainable cash credit

Nikhil Kaushik

Nikhil Kaushik (Expert)
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