Cash negative balance

This query is : Resolved

NAVANEETHAKRISHNAN S (Querist)
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19 August 2013 Dear Xperts,
Is there any penalties leviable for Monthly closing cash balance showing negative . . . ? If so, which sec will be aply for the same . . ?

CA Parul Saxena online

CA Parul Saxena online

(Expert)
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19 August 2013 As such there is no such penalty prescribed but there must not be negative cash balance even for a single day as it would create a doubt that if you have not cash then from where you make the expenditure it means you have surplus hidden cash which is not disclosed.

Rupesh Jain

Rupesh Jain (Expert)
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19 August 2013 it is not possible -ve cash bal

it is addition as undisclosed income ..

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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19 August 2013 First of all please confirm and analalise how cash balance becomes negative. It is impossible,

Because of with out having cash in hand you can't make any payment, even you have to must and should pay amount then first you have to bought it from some one, i.e first you receive the cash into your hand and then make the payment, so no question of negative cash balance,

In case if cash negative balance find out or having cash negative balance means you not disclosed some receipt or income. In the assessment proceedings AO shall consider such cash negative balance amount as you have other income which is not disclosed and the same amount shall be included to your total income and computes tax liability.

In one word there is no chance to having cash negative balance, if it appearing in the books then your books of accounts are not correct or you not disclosed some income or receipts.

Any way if books showing cash negative balance then the same amount shall be included as Income by the AO.

OM SAI SRI SAI JAI JAI SAI

NAVANEETHAKRISHNAN S

NAVANEETHAKRISHNAN S (Querist)
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20 August 2013 First of all i shud say thanks al of u 4 ur honurable replies.

Dear xperts there is a chances available in tally for showing cash negative balance. whatever u entered in tally it will accept, and it'll not ignored. At d same time it shows the bal as a negativ.
And there is a sec avail in it for levy penalty to such kind of sum. My auditor said dis whn i dng cash vouching pls check monthly clo bal whethr showng negativ or positiv. Thn i asked to him, he said such a kind of sec may apply for dis those type of balance. But now i'm forgt dat dat's y askng u.

Thanks n Advance.