Cash Entries

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2010 Dear sir,

I am an accountant, My one client (i.e.prop.concern) has to issue invoice of machinery to his customer of about Rs.90 Lacs,
but that customer wants from us to receive his payment by cash of about Rs.20 lacs in different dates as advance.

because in normal case i don't pass entry more than Rs.20000 in a one day. so i want to ask can we do it in the case of machinery or not.

Thanks

taxindiaconnect

taxindiaconnect (Expert)
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09 November 2010 yes, you can receive the payment in cash, it is the payer who can not make payment in excess of Rs 20K in a day.

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CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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09 November 2010 Sec 40A(3) Applies only when we are claiming it as an revenue expenditure as specified u/s 30 to 37.Otherwise is not applicable.
As it is puchase of Machinery which is in the nature of Capital expenditure, Sec40A(3) is not applicable either to you (seller) or to the purchaser (Capital asset)

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