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cash payment exceeding 20000, incurred for loading and unloading

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(Querist)
08 November 2016 Loading charges incurred when sale is made to a party, but payment is made to two different individual persons for loading to a single party and total cash paid to two individual persons is exceeding 20000.Is this expenditure disallowed?
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CA SUNIL K GARG

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CA SUNIL K GARG (Expert)
08 November 2016 Section 40A(3)(a) of the Income-tax Act, 1961 provides that any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000/- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction.The statutory limit in section 40A(3) applies to payment made to a party at one time.
Since if in your case payment made to two different persons is less than Rs. 20000/-, then expense will be allowed.
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