CASH Payments Exceeding 20k !!

CASH EXCEEDING RS 20000/- Some Steps to 

1.We can found the same while scrutiniszing Bank Accounts viz a viz Bank Statements, where, since Bearer Cheque is issued & when it is cleared word CASH is written

2. The list (even though Randomly) of such transactionas can be sent to bank for the third party confirmation of such transactions.

3. Payment Vouchers made by the Client Could give some  indication in respect of  the same....

4 At Planning & Assesement stage of audit per se one can go through Previous year TAX AUDIT REPORTS to gather the information about such discrepencies......

@ Amit Jain, @ Prashant,   @ Saurabh, @ iyyapan  - Your All Views are almost Same, and You are Correct too.

But i have seen in Some Bank, That they didnt mention Cash Word in bank statement even if it is cleared through Bearer cheque.

& It is also not compulsory that every bank use to show as "clearing" in their bank statement even if it is cleared through cross cheque.

Conclusion:- there is no as such concrete way to check this bearer cheque payments, sometimes it becomes very difficult to check, as generally every month you will find say 100-200 pages of bank statement, how you will check ? its not possible, even you cant go for random basis checking, since each and every payment must be disallowed under income tax act 1961.

Regards,

CA Ayush Agrawal

"Make Your Own Way"

cash payment exceeding 20000 has to be reported  y the auditor if not covered by rule 8D

Auditor shall verify the payments with books of accounts and bank statements. he shall obtain suitable certificate from the asessee for such payments and keep in his records. If no proper evidence received as to such payments he shall discose the matter in auditor's report.