CLIENT BY MISTAKELY MADE GENUINE PURCHASES IN CASH IN THE STARTING OF YEAR DUE TO COMMENCEMENT OF BUSINESS. IS THERE ANY PROTECTION ? OR POSSIBLE WAY?
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Purchase in cash covered by sec 40a(3)
Replies (3)
pass journal entries for less than Rs. 20000/-
if the receipt of payment is of rs 300000 even though we pass entry
Hai..
Though the purchase is genuine it cannot help the disallowance under sec 40A(3). That too amount of 300000/- is huge and difficult to save the disallowance.
If the transaction is more and regular with that party then you pass journal entry with less than 20000/- so that it can be justified. but the party should also account so. other wise IT dpt will easily find out.
Better receive back cash and pay in check.
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