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
- GSTR-1A How to update Invoice
- Excess salary payment.
- Stamp Paper for partnership firm change new income tax 2025
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Capital gain from sale of house property
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- Regarding TDS Applicability For Director Remuneration
- FORM 26A APPLICABILITY
- SFT Cash Deposit in Current Account
- TDS APPLICABILITY......
- Copyright software
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
