CBDT had issued a circular that if the payment is made using internet banking then sec 40A(3) will not be applicable. right now i dont have the copy of the circular.
Azim Khan ACA,CS,CMA*,LLB*
(Proprietor)
(1312 Points)
Replied 01 July 2011
CBDT had issued a circular that if the payment is made using internet banking then sec 40A(3) will not be applicable. right now i dont have the copy of the circular.
RAJU
(LEARNER)
(1089 Points)
Replied 01 July 2011
| Originally posted by : Ajay | ||
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Thank u all.... so i conclude that any payament made through internet tranfers are as good as making payments by crossed cheque/draft as allowed under Sec.40A(3)... To Quote Mr.Dharmaraju "Regarding the query, there will be no disallowance as Rule 6DD of IT Rules provided for the exceptions."...just to confirm...are u talking about the clause in Rule 6DD im giving below ? "(d) where the payment is made by— (i) any letter of credit arrangements through a bank ; (ii) a mail or telegraphic transfer through a bank ; (iii) a book adjustment from any account in a bank to any other account in that or any other bank ; (iv) a bill of exchange made payable only to a bank. Explanation : For the purposes of this clause and clause (h), the term “bank” means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company54 as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India" |
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In Specific Sub-rule c(v) which reads as below;
`use of electronic clearing system through a bank account`
Ajay
(CA Job)
(512 Points)
Replied 01 July 2011
ok...thank u all once again for the help...n thank u Dharamraju for pointing it out,...i was refering to the rule 6DD before the amendment....now only i saw the updation....for all others, the relevant amendment is --> INCOME-TAX (SEVENTH AMENDMENT) RULES, 2008 – SUBSTITUTION OF RULE 6DD - NOTIFICATION NO. 97/2008, DATED 10-10-2008...
Regards,
Ajay
Prashanth
(Chartered Accountant)
(2322 Points)
Replied 01 July 2011
Dear all,
Im my opinion
The purpose of the sec 40A(3) and the pupose of these crossed cheque is to ensure that the payment has to reach the original creditor/any other person and Hence payment through Internet banking is not the violation of the said section.
deepak
(Job)
(69 Points)
Replied 01 July 2011
in my openion , the law makers has forgotten to amend the section 40A 3 ,, I hope they will amend it and insert some proviso for the internet banking payment.
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 02 July 2011
Agree with Sunshine ,Sec 40 A(3) will not be applicable in your case.
Anvesh Desai
(Chartered Accountant)
(156 Points)
Replied 02 July 2011
Absolutely not applicable...
Basic intention of the law is to check the cash transactions to curb
black money...
C.A SHASHANK GOYAL
(Chartered Accountant)
(362 Points)
Replied 02 July 2011
YES ,I agree with all my friends but payment made through internet banking very well fall with in the purview of rule 6DD , in my opinion revenue expenses wil not be disallowed.
CAclubindia
