Cash above 20000 deposited into suppliers bank account
This query is : Resolved
16 April 2013
Hi the company I am auditing is running construction business. For meeting expenditure sometimes they deposit money into the suppliers/ clients bank account directly (above Rs 20,000). Will such expenditure come under 40(A)(3) and get disallowed or is it ok to continue so? Kindly reply...
16 April 2013
yes disallowed as there written any means other than account payee cheque drawn on a bank or account payee bank draft.
hence disallowed
hence disallowed
Message likes :
1 times
16 April 2013
Yes, totally agree with CA Vikas Acharya.As section 40A(3) of Income tax act clearly mentions that the payment made above Rs.20000/- in respect any expense by any mode otherwise than by an account payee cheque drawn on bank or account payee bank draft shall be diasllowed.
Message likes :
1 times
16 April 2013
Thanks experts. But I have also read in many places that internet fund transfer is also allowable(Not cash deposit).
16 April 2013
Miss, internet fund transfer reflects in your bank account, therefore allowed.
but directly deposit to there account will not reflect in your bank account, and scope of manipulation increased therefore, not allowed.
but directly deposit to there account will not reflect in your bank account, and scope of manipulation increased therefore, not allowed.
Message likes :
1 times
16 April 2013
Yes I just wanted to add that (fund transfer) to the list you have mentioned - account payee cheque drawn on a bank or account payee bank draft. Thanks
Message likes :
1 times
16 April 2013
Hi,
Please refer CIT Vs. Venkatadhri Constructions 213 taxman 180(madras)(mag) where it was held that cash payment into payee's a/c is not as good as payment by account payee cheque as required u/d 40A(3).
Please refer CIT Vs. Venkatadhri Constructions 213 taxman 180(madras)(mag) where it was held that cash payment into payee's a/c is not as good as payment by account payee cheque as required u/d 40A(3).
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Pass word to open justification report for Q1 for FY 2026-27
- Section 194JA & JB Income which ITR Form to use
- PPF interest-As Exempt Income disclosure
- Scrutiny and reopening of past returns
- Tax on Deemed Capital Gain
- Booth for sales promotion
- F & O PROFIT REPORTING FOR AY 2026-27
- Type of Capital Gain
- Regarding ITR filing with more value than showing in AIS/TIS
- Difff in ais receipts and gst turnover
- ITR-3 File/Error Found
- Exiting partner in partnership firm in gst portal
- Taxability of credit in canara bank ET & T section (NRO)
- Consequences of Non-Deduction of TDS under Income Tax???????????????
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
