non disclosure of cash payment in balance sheet

Legal_Query (Querist) 09 March 2014 This query is : Resolved
A company instuted a civil suit claiming that they have paid major part of consideration amount against purchase of land in cash (20lac) and only nominal amount is yet to be paid. Dfendant in d suit protested against the said suit and claimed that he had not rcvd any mney as claimed by the company and presnted balance sheet of the company in which there is no entry of any cash payment as claimed by company.
1. can a company pay cash ovr and above 20,000.
2. can a company claim such payment of cash (20 lac) and not reflect it in balance sheet (2008 or afterward).
3. is there any provision where company can legally hide such huge cash payment and later claim cash payment of such amount bfr court.
4. what irregularities/illegality have company done against which action/ defence can b taken by defendant.

Thanking u in anticipation of ur esteemed opinions.

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Anirudh (Expert) 09 March 2014
While instituting the suit, the company also would have shown some document - say receipt etc., granted by the vendor. Please indicate as to what is the document that the company had produced before the Court.

Rajendra K Goyal (Expert) 09 March 2014
1. Yes in case the circumstances so warrant.
2. Total balance sheet has to be gone through, whether asset increase has been shown or otherwise?
3. Company can not hide huge cash payments.
4. Consult a lawyer.

Guest (Expert) 09 March 2014
Are you sure that a balance sheet of a company shows different cash payments?

Your queries are totally irrelevant. Actually, at first, you need to know what is a balance sheet. Balance sheet is merely a replica of the year end balances of assets and liabilities of any company under various major heads of accounts. That includes only cash & bank balances at the close of the year. Transactions of cash receipts and payments on day to tay basis are shown in cash book of the company.

Guest (Expert) 09 March 2014
The problem what you are discussing will be related to Income Tax Dept only and the court will only see whether the payment is made or not.Mode of payment will be the botheration of IT Dept.If you question why they had paid cash the one who accepted it also under fault.

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