TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
27 August 2011Dear 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
Ankit
(Final Student)
(101 Points)
Replied 28 August 2011
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.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 28 August 2011
Yes allowed it will business profit in the hand of x of Rs 10000.
CA PRAVEEN SINGH
(MANAGER ACCOUNTS)
(2277 Points)
Replied 28 August 2011
Yes allowed it will business profit in the hand of x of Rs 10000.
Dhiraj
(Article)
(33 Points)
Replied 28 August 2011
Agreed with Pravin.
AFAIK IT act doesnt have ny section limiting the flow of payments/receipts in course of business transction.
MAHESH
(Tax Consultant)
(114 Points)
Replied 28 August 2011
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.
Shah Tarun
(Student)
(800 Points)
Replied 28 August 2011
CAclubindia
