Dear Experts
A lender has advanced a sum of Rs. 2 Lakhs to a borrower against a guarantee from a Guarantor.
Now Borrower does not repay the loan to Lender on the due dates. Therefore Lender asks the guarantor to make the payment.Cash a/c Dr. Rs. 2 Lakhs
To Borrower A/c Rs. 2 Lakhs
And the Guarantor does not want to show this payment in his books.
The books of Lender and Borrower will not match, because Borrower has not paid any amount.Guarantor has paid cash to the Lender but books of Lender and Guarantor will not match, since the Guarantor has not made any entry in his books.
Now whether Lender can accept the Cash in the name of Borrower, without any complicacy in Income Tax Act?
CAclubindia
