share application money

hussain (Querist) 09 September 2009 This query is : Resolved
Sir,
A private company as received share application money in cash during the year in bulk amount and returned same amount through bank (some bearer cheques and some A/c payee)there any rule which explian this problem.riven

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A V Vishal (Expert) 09 September 2009
There is no problem if the share application money is received in cash, if the assessee proves the source to be legitimate, however a payment of more than Rs.20,000/- otherwise than by a crossed cheque viz.cash or bearer cheque is disallowed under I T Act and 100% of the amount so paid can be added back to income and assessed to tax.riven

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