Advance of rs 500000 paid in cheque against freight services. After 3 trips freight amounts rs 72400/-. Transporter unable provide further services. Now transporter is refunding balance 427600 in cash.
Is it permissible under income tax?
Under IT Act provisions
Receiving or repayment of loan/advance in cash is not allowed if payment exceeds 20,000/-.
sections 269SS and 269T restricts to allowing payment/receipt in cash.
Please refer the above mentioned provisions....
In the present case transporter liable to pay balance amount in cheque/pay order/ECS and shouldn't be in cash mode.
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