30 September 2011
creditors are for expenses or purchases and Section 4a(a)(3) of the Income Tax act, clearly prohibits payment of any expenditure in cash for more than 20000. So the same has to be disallowed.
30 September 2011
Creditors balance appear in balance sheet. Payment in cash has to be reported in Form 3CD, clause 17 (h)(B). The same has to be disallowed in computation of Taxable Income.
CAclubindia
