Accounting

Dear Sir,

We have a doubt which is we have purchased services from SPR Publications Pvt Ltd, when we settle bills purchaser requested to give a cheque another company name i.e aditya broadcasting pvt ltd due SPR publications pvt ltd OD account is in negitive.

my questing is can we give cheque in favour of ADITYA BROADCASTING PVT LTD AGAINST BILLS BOOKED SPR PUBLICAITONS.

PLEASE ADVISE

Replies (5)

Take a written confirmation from ADITYA BROADCASTING PVT LTD for settlement of due of SPR PUBLICAITONS vide cheque no. and so on.

Yes... I agreed to Mr Manish...
It's a mutual understanding with SPR PUBLICATIONS AND ADITYA BROADCASTING.
THE CHEQUES WILL BE CREDITED TO ADITYA BROADCASTING AND A WRITTEN CONFIRMATION FROM SPR PUBLICATIONS IS ESSENTIAL.
On request from service provider SPR Publications , you issued cheque in the name of another company ( Aditya Broadcasting Pvt Ltd)

Are SPR going to replace bill - in Aditya company ?

You may mutually do anything and everything, but is this allowable for tax purposes ?

Section 40A(3) issue may arise.
Statutory Auditor may object
Tax auditor may report in Form 3CD

( in both companies)

This is objectionable.
Online payment is better. Pay to SPR and then SPR to Aditya. Why mess it up ??

eg. if you had taken loan of 50 lakhs from SPR and SPR requests you to repay directly to Aditya, is it okay ? Will you do it ?

All such things are prone to creating uninvited issues. If any substantial reason say name change of SPR to Aditya , it's okay But otherwise better to stay away from such request.
There are certain issues which need to be taken care off_____
This type of mutual settlement may be acceptable when there is a written agreement attested in front of a notary public on a bond paper.

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