CLIENT BY MISTAKELY MADE GENUINE PURCHASES IN CASH IN THE STARTING OF YEAR DUE TO COMMENCEMENT OF BUSINESS. IS THERE ANY PROTECTION ? OR POSSIBLE WAY?
naman modi (Article) (111 Points)
29 August 2011CLIENT BY MISTAKELY MADE GENUINE PURCHASES IN CASH IN THE STARTING OF YEAR DUE TO COMMENCEMENT OF BUSINESS. IS THERE ANY PROTECTION ? OR POSSIBLE WAY?
CA Mukul Mittal
(CA in practice)
(384 Points)
Replied 29 August 2011
pass journal entries for less than Rs. 20000/-
naman modi
(Article)
(111 Points)
Replied 30 August 2011
Dhanabal Ramasamy
(CHARTERED ACCOUNTANT)
(105 Points)
Replied 30 August 2011
Hai..
Though the purchase is genuine it cannot help the disallowance under sec 40A(3). That too amount of 300000/- is huge and difficult to save the disallowance.
If the transaction is more and regular with that party then you pass journal entry with less than 20000/- so that it can be justified. but the party should also account so. other wise IT dpt will easily find out.
Better receive back cash and pay in check.
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