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Cash payment more than 20000/-

Others 20905 views 18 replies
Originally posted by : ramcharan

@ SHIWANI:  Making cash  payment of  20000 per day per person is simply not disqualified,

The assessing officer can disqualify the amount paid to that person if he thinks that  is not reasonabe

thaen only the payment is disqualified 

I want to know whether the applicabiliity of the rule 40A(3) is subject to payment only or the gross amount payable.

For Eg.

I have to pay to a transporter Rs. 40,000/-

I pay Rs. 25,000 as advance and remaining Rs.15,000 on next day. And I show this break-up in my invoice also.

Will Section 40A(3) attract here ?

Yes, It attracts Section 40A(3) Because the substance of the transaction is just to avoid the disallowance under the above mentioned section.

(Refer Brilliant Study Centre v ACIT (2012-135-ITD-351) Cochin Tribunal)

As per my knoledge sec.40A(3) apples when we pay anmaout exceeding 20000(or) 35000 as the case may be in a day per person

in the view of the same the answere to your question is they can pay as you planned butduring the cource of the audit  the autor may identify that it it is solely made to get exemped form the sec.40A(3) ; he mey menton that in his report u/s 40AD in form 3CB/3CD

if the payment  to concerned party is made as per their requirement

Ex:the transporting comp[any may ask their cusomers to pay part of payment as advance and other remaining amount as when the task is completed 


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