cash balance adjustment for site purchases

Question BankCategory: Otherscash balance adjustment for site purchases
Avatarkollipara sundaraiah asked 5 months ago

sir,
one of sec 44ada professional income i.t.return filed assess cash on hand balance rs:15 lacs as per books as on date:20-08-2019 .if assess purchase of site value rs: 27 lacs as on date:20-08-2019.
query:
assess purchase of site value rs:27 lacs -cash balance as per books rs:15 lacs differance amount rs:12 lacs how to adjustment cash balance as on date:20-08-2019 in accounting books.

2 Answers
AvatarAman answered 5 months ago

As on 20-8-2019
Cash in Hand Rs. 15 Lakh
Site purchase Rs. 27 Lakh.
Is the site purchased for cash? If yes, this is in contravention of section 269ST for receiver of cash and he shall be liable to pay penalty equal to the sum of receipts. 
If site is purchased by cheque payment and you are concerned about accounting entry of the same then the it may be recorded as follows:
Site-under-construction/ WIP/ Building/Plot (as applicable) Dr. 27 Lakh
To Bank (Rs. 27 lakh)

AvatarKollipara sundaraiah answered 5 months ago

Sir,
Assess purchases of site value rs:27 lacs through on bank mode.but accounting books finalization time f.y.19-20 cash balance shortage Rs:12 lacs as on date:20-08-2019 in books.assess cash balance adjustment producer in books site purchases transactions date.

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