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Advance paid in Cash

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Querist : Anonymous

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Querist : Anonymous (Querist)
30 October 2010 Advance Paid in Cash, Two situations:

1.) Advance paid in cash more than 20000 in one time and later adjusted to the final bill of 36000. What treatment under section 40(A)3

2.) Advance paid in cash more than 20000 in one time to a vendor. Later vendor pays back the advance completely and give the total bill of 36000 which is settled by cheque. Whether 40(A)3 applicable. If yes, what is the implication. If no, what is the treatment otherwise.
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RANGA SRINIVAS

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RANGA SRINIVAS (Expert)
30 October 2010 Situation one;

Cash paid in excess of Rs. 20000.00 will be disallowed.


Situation two:

Even this situation the said amount will be disallowed as the payment is in excess of Rs. 20000.00 though it is later received and the whole amount is settled by cheque.
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Querist : Anonymous

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Querist : Anonymous (Querist)
30 October 2010 Say if the advance of 25000 is given to any employee in cash and he returns back in a week time. then what should be the treatment.
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Aditya Maheshwari

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Aditya Maheshwari (Expert)
30 October 2010 No expenses booked so no disallowance can be made.
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