Withdrawl of cash from bank
This query is : Resolved
Tarun Kumar
(Querist)
13 August 2011
In a partnership firm cash is needed for operating exp. which will be paid by firm in cash.Should firm issuse the cheque in the name of self or in the name of the person say X, who is sent by the firm to withdraw the money from bank?
So that the no objection will by the I.T.Department.
So that the no objection will by the I.T.Department.
CMA Ramesh Krishnan
(Expert)
13 August 2011
you can withdraw cash by self only. issue of cheque in the name of person will be treated as loans
Tarun Kumar
(Querist)
13 August 2011
But bank manager say that a person who is sent by the partnership firm cheque must be in the name of that person,but in the case of partner go to collect cash from bank then it can be in the name of self, not in other case self cheque can be issused by the firm.
CA Ashwani Agarwal
(Expert)
13 August 2011
That is not a problem, these things happen in practical cases, the ITO will not go to bank and ask them to show the cheque to him.
So if you keep your accounts up to date and you can tell the ITO answers to his question, no problem will be there.
So if you keep your accounts up to date and you can tell the ITO answers to his question, no problem will be there.
Tarun Kumar
(Querist)
13 August 2011
But the I.T.O. will see the bank statement and finds that the cheque is in the name of third person which is shown in account statement issused by the bank and the ITO will treat it as loan. then what ? Now what is the actual banking rules say cheque must be issued by the firm in the name of self or third person who collect the payment on behalf of the firm ?
CA Ashwani Agarwal
(Expert)
13 August 2011
If the ITO checks the same then explain him the situation. Give an authority letter to the person who brings the amount for you.
ITO needs explaination for the enteries, if you can give him the same then he is will consider them.
ITO needs explaination for the enteries, if you can give him the same then he is will consider them.
CA. Krishna K Neeraj
(Expert)
15 August 2011
agreed with experts. Moreover, bank can ask for authority letter but can not ask to write cheque in favour of somebody.
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