27 December 2011
A payment in respect of a revenue expenditure has been made through a bearer cheque for an amount exceeding Rs. 20,000. However, the amount is deposited in the bank account of the recipient, and there is conclusive evidence that the amount so paid is transferred to the bank account, hence it is established that the transaction is routed through the bank. The legislative intent being satisfied, would this transaction attract disallowance u/s. 40A(3)? Are there any case laws in support of the above?
28 December 2011
What if the IT dept. has obtained xerox copies of the cheques, proving they are bearer cheques? The cheques are deposited in the bank account itself of the recipient, and it clearly appears in the respective bank statements of both the parties. Help??
29 December 2011
IT Dept does not ask for xerox copy of cheques in normal circumstances. Here it is clear beyond doubt the receipt has not withdrawn cash from the bearer cheque rather the amount is routed through his bank account.
Moreover, even if IT dept got copy of bearer cheque but it is fact that amount is transferred into bank account of recipient through banking channel. you need not to worry
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