Cash transfer (after Share sale)

Dear experts,

I would like some clarifications / advice on the following:

Person X buys a few shares on behalf of their friend (Person Y). Y has paid X in cash.

X sells the shares for a profit and pays the Short Term Capital Gains Tax due.

Now Y asks for payment (of the profit after tax) by Cash or Bearer Cheque. Is it advisable and legal for X to do this? Or will it cause any problems during tax reporting / scrutiny? The amount to be paid is greater than 10 Lakhs.