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Income tax

CS Abhijeet soni Advocate (CS LLB MCOM MBA (FINANCE) MPHIL CA INTER PGDCA PGDA&PR ) (931 Points)

26 October 2014

sir good evening my question is that on following points: 1. my client has been deal with some relative to purchase a house (owned by his relative) in Rs.30lak in delhi. 2. his relative demanded 15 lac in advance for this in this context and asked please give this advance to his creditor by neft transfer my client has been paid amount without any agreement to third party( creditor of his relative) 3. now deal is dismissed and my client demanded his 15 lack then he give cash to him. tell me this right to receive this amount in cash and other consequences for this cash receipt.

thanks in advace for your ans

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(Guest)

Your client had paid amount on the behalf of his relative (I assume he is a relative under IT Act) as advance for property purchase by bank entry.

It is possible that the relative has shown the entry in his own books as loan from your client. When he repaid it by cash, it is possible that he did not show rep[ayment entry in his books and the loan continues in his books bec repayment of unsecured loan by cash is not allowed u/s 269T.

Now if you client deposits the cash in his bank, he will have to show as refund of advance.

Your client should talk about this matter with his relative because there should not be any mismatch in their books of a/cs. If possible get a letter from the relative explaining the transaction.