Dd purchased in cash - whether allowed u/s 40a(3)
This query is : Resolved
21 September 2011
Dear Sir
My query is if person purchased dd in cash of more than 20000/- in favour of one party and entry is routed through cash book by party a/c dr and cash a/c cr
whether is it allowed. or disallowed u/s 40A(3)
rgds,
My query is if person purchased dd in cash of more than 20000/- in favour of one party and entry is routed through cash book by party a/c dr and cash a/c cr
whether is it allowed. or disallowed u/s 40A(3)
rgds,
21 September 2011
Dear Ram,
Sec.40A(3) speaks about mode of payment and not about entries in Book. if the payment is made through by A/c Payee DD than it will be allowed. to play safe game it is suggested to route this transaction (in Books) from bank Account.
Sec.40A(3) speaks about mode of payment and not about entries in Book. if the payment is made through by A/c Payee DD than it will be allowed. to play safe game it is suggested to route this transaction (in Books) from bank Account.
Message likes :
1 times
21 September 2011
DD is purchased in cash of more than rs. 20,000 whether allowed.
21 September 2011
Although you have made the payment by an account payee DD, however in the books of account you have credited cash account. This is a violation of Section 40A(3).
21 September 2011
I think the node of payment is only important. What if the purchaser of DD has purchased it by directly depositing cash in the bank(maybe not his regular bank but bank of creditor). Then the entry in books would be to Debit Creditor, Debit bank Charges and Credit Cash. In such a case, the Assessee should maintain the counterfoil of the DD application and also the xerox of the DD itself to prove that the payment is made by crossed DD only.
Message likes :
1 times
22 September 2011
i think the object of legislature if fulfilled in the given problem so it will be allowed.
entry in the BOOKS
XYZ Bank A/c Dr XXXX
Bank charges Dr XX
To Cash A/c XXXX
Payment of Cash for DD
Creditor A/c Dr XXXX
To XYZ Bank A/c XXXX
Payment by DD
NOTE: even when you do not maintain an account with bank than also you can bring that bank in to your Books for recording the correct effect of transaction.
entry in the BOOKS
XYZ Bank A/c Dr XXXX
Bank charges Dr XX
To Cash A/c XXXX
Payment of Cash for DD
Creditor A/c Dr XXXX
To XYZ Bank A/c XXXX
Payment by DD
NOTE: even when you do not maintain an account with bank than also you can bring that bank in to your Books for recording the correct effect of transaction.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Inventory of finished goods
- Disallowance of Section 43B(h) to sez units
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Confusion around Form 26QB fields
- RCM INVOICING FROM NOV-2024
- GST Regis.
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Tds on building rent monthly
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Sale of property furniture sale
- As per schedule III of balance sheet how to pass journal entry
- Is correct way to find out capital of individual on 31st March
- Individual capital equal to which assets of balance sheet
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
