It assess accounting books outstanding ledger balance creditor and debtor as on dt: 31-03-21.(in f.y.20-21)
cash loan from creditor (name Mr.A) Rs:3 lacs
Cash loan to debtor (name Mr.B) Rs:3 lacs
cash loan from creditor account rs: 3 lacs ledger outstanding balance transferred to cash loan to debtor account ledger outstanding balance adjustment journal entries passed in books in f.y.21-22.
Query:
1. above adjustment journal entries passed transcations allowed in it act.
2. sec 269ss and sec 269t provisions applicable in it act.
Answer: Aman July 20, 2021 Answer:
1. As much as we understood your question (you can ask again in case it is not what you wanted to convey), you are asking us about the netting of debtors and creditors while preparing the books of accounts. Therefore I am answering in that context. So, netting of the debit & credit balances of two different parties with each other is not permissible as it doesn't reduce your liability to pay to that party or the right to receive from the party and also it is against the true and fair presentation of financial statements.
2. In case of 269SS and 269T, it doesnt matter the head in which the cash transaction is incurred is settled or may be for any reason not getting shown in the financial statement. It has the basic condition of receipt or payment in cash above specific limit.
CONCLUSION
Therefore, in your case if any transaction has incurred in cash above the specific limit, it has to be reported in these sections. As I got your question it was just for netting of the balances, which is not permissible, has to be shown separately and in case no transactions are incurred in both heads the section will not be applicable.
