Dear all,
Please inform me.
Suppose" Mr.X" Purchase goods of Rs. 100000/- from "Mr.Y" and "Mr.X" sold goods of Rs. 110000/- to "Mr.Z" and mentioned on the sales bill issued to "Mr Z" ''Please Pay Rs. 100000/- to "Mr Y" on behalf of me and make the balance Payment to Me (i.e :"Mr X").
Please confirm that whether this type of payments are allowed under Income Tax Act. (Please don't forgot to provide the Sections)
Regards
TRILOCHAN
I am not sure about this one but then I am thinking that if these kind of transactions are allowed then what audit trail will we have to prove the transactions as real.
OFCOURSE THEY ARE ALLOWED. BUT MAKE SURE THAT THE DEBTOR AND CREDITOR HAVE BEEN GIVEN EFFECT TO IN CASE OF MERCANTILE SYSTEM. I N CASE OF CASH SYSTEM A RECEIPT OF 10000 WILL B SHOWN AS BUSINESS PROFIT
Yes allowed it will business profit in the hand of x of Rs 10000.
Yes allowed it will business profit in the hand of x of Rs 10000.
Agreed with Pravin.
AFAIK IT act doesnt have ny section limiting the flow of payments/receipts in course of business transction.
Allowed, there is no relevent section which deals with proceeds from sales. But people in loop have suffiecient correspedence with them authonicated by each other. To avoid futuer litigations.
HKC | Chartered Accountants & Business Advisors
Ludhiana
CA
View Details
Twenty Point Nine Five Ventures Private Limited
Noida
CA Inter
View Details
KK & Company Chartered Accountant
Pune
CA Inter
View Details
CCI
Pro
CAclubindia
