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One of my client runs a franchisee store of a cloth company. And there is a SOR (Sale or Return) agreement signed between them, where the company's collection agent comes to the store daily and takes away all the cash generated from Sales which I guess can also be treated as cash payment to the company because the purchase invoices received from the company is in my client's name and contains his GSTN. Even the sale invoices issues from the store is in my client's name. Now my question is, as my client's accounts is Audited U/S 44AB, will there be any problem if cash pickup is more than Rs. 10000 in a day?
Replies (2)
Yes... under sec. 40A(3) of IT act...
I think cash sale collection belongs to company as the invoices are raised in company's name.
So it's a transfer of cash from one location to another location by the cash owner.
There is no expenditure involved here to invite provisions of 40A(3) .
No issues in cash pick up under 44AB audit as it is not falling under 40A(3).
If a single sale invoice is above 2 lakhs in cash then company will be hit by 269ST provisions.
So it's a transfer of cash from one location to another location by the cash owner.
There is no expenditure involved here to invite provisions of 40A(3) .
No issues in cash pick up under 44AB audit as it is not falling under 40A(3).
If a single sale invoice is above 2 lakhs in cash then company will be hit by 269ST provisions.
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