Accounting method

This query is : Resolved

Savan Kasliwal (Querist)
Follow

17 January 2015 One of my client want to sale his Constructed Property. Property value is as per Ready Reckoner is Rs. 4.00 CR.

Agreement Value is also Rs. 4.00 CR. Buyer want to pay Rs. 3.50 CR by chq and Rs. 50.00 Lac in cash.

As per Ready Reckoner I will have to pay Income Tax on Rs. 4.00 CR. Whereas I will have to show Rs. 3.50 CR in the books only.

I may not show Rs. 50.00 lacs in the books due to buyer wants to pay in cash.

In this case is there any other way to show in the books the whole agreement value i.e. Rs. 4.00 CR?

Please do the needful at the earliest.

Awaiting for your positive reply.

Rupesh Jain

Rupesh Jain (Expert)
Follow

17 January 2015 you have to show all consideration in books.

Savan Kasliwal

Savan Kasliwal (Querist)
Follow

17 January 2015 Yes. Its absolutely correct but I want to tell you that Rs. 50 lacs he can not use as a white money.

This is the main problem.

Seller will pay Income Tax on Rs. 4.00 CR but still he can not use rs. 50.00 lacs in white. In this case what he should do?

Upgrade to CAclubindia Pro. Subscribe Now!

Guest

Guest (Expert)

17 January 2015 Show Rs50 lacs still recievable and after 2-3 years show as a bad debts..

Savan Kasliwal

Savan Kasliwal (Querist)
Follow

17 January 2015 Ok. But still my problem not resolved i.e. on Rs. 50.00 lacs he will pay Income Tax but still he can not use as a white money.

So is there any other way to convert this amount as white money and buyer should have also no problem as far as concern from i.T. Department.