Cash received by partner in firm

This query is : Resolved

CA PRAVIN (Querist)
Follow

19 August 2011 Dear Expert,

Partnership firm received cash of rs 10 lacs from its partners.

cash is used to firms expenditure.

Will it attract any disallowance?

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
Follow

19 August 2011 If any expenditure is paid in cash over Rs 20000 in a day then the same is disallowed.

If you dont have proper vouchers of any expenditure the same will be disallowed.

Also if the partners will not be able to explain the source of the investment of Rs 10 lakhs the same will also be added in their total income.