40 a 3

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Shashikant (Querist)
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06 January 2014 Dear Experts,
I have a case regarding cash payment:-
M/s X co. issue cheque in the name of employee of Rs. 40,000/- for purchasing a Mobile Phone. The employee withdraw the cash from Bank and then purchased a Mobile phone.
The question is that whether this payment is cover under Payment u/s 40 A 3.

Ganeshbabu K

Ganeshbabu K (Expert)
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09 January 2014 if cheque is open cheque then it is cash payment and disallowed.but if cheque is account payee cheque it is not cash payment adn allowed
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it is difficult to find out for auditor whether cheque issued is crossed or open cheque unless a copy of cheque is pasted with the voucher
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That is why it is recommended to get certificate from assesse that he had issued only account payee cheques for payment more than 20000

Shashikant

Shashikant (Querist)
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21 January 2014 DEAR SIR,

BUT IN MY OPINION IT IS A TRANSACTION COVERED U/S 40A3

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