Cash payment to shroff

My client is having gold bullion business, he wants to deposit cash of rs.20,00,000/- in bank but to avoid bank charges he gave cash to shroff firm in return of receipt of cheque of his name from shroff firm and paid nominal charges to shroff firm which are lower than bank charges.whether cash paid shroff firm is allowed.?????
Replies (1)

This is a complicated question which needs further inputs. In my opinion if the firm to whom your client had paid cash was a creditor of your client then the chances of disallowance u/s 40A(3) should be studied. In case this is shown as a loan/advance the applicability of 269SS/T should be considered. 

 

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