Explanation:

When an individual operates a business as a proprietor, the profits earned by the business are considered as personal income of the proprietor. Hence, the proprietor is required to pay income tax on the profits earned by the business.

Payment of Income Tax:

The payment of income tax can be made through various modes such as online payment, payment through bank, payment through challan, etc. In this case, it is mentioned that the income tax of Rs. 1,17,000 was paid out of petty cash.

Payment through Petty Cash:

Petty cash is a small amount of cash that is kept aside by a business for making small payments. The petty cash fund is replenished periodically by transferring cash from the main cash account.

In this case, it is not clear as to why the income tax payment was made through petty cash. However, it is important to note that the payment of income tax through petty cash is not a recommended practice as it does not provide a proper trail of the payment made.

Tax Deducted at Source:

Another aspect that needs to be considered is whether the income tax payment was made after deducting tax at source (TDS). TDS is a mechanism through which the government collects tax at the source of income. If TDS has been deducted, then the payment of income tax through petty cash may not be a major issue.

Conclusion:

In conclusion, the payment of income tax through petty cash is not a recommended practice as it does not provide a proper trail of the payment made. It is advisable to make income tax payments through proper banking channels to maintain transparency and avoid any issues in the future.

Income tax a/c dr 117000
to petty cash a/c. 117000