Cash Payment >Rs.20,000/-
This query is : Resolved
10 March 2008
Should the Traders/ Contarctors/ Transporters showing profits u/s 44 AD/ 44AE or 44AF should also take care while paying for expenses more than Rs.20,000/- in cash.
10 March 2008
YES,PAYMENT EXCEEDING RS20000/- SHALL BE DISALLOWED IN SUCH CASES ALSO
pushpendra
(Expert)
10 March 2008
Yes because in these sec only sec. 30 to 38 is exempt sec. 40A(3) is not exempted.
so. take care of cash payment of 20000 or more.
so. take care of cash payment of 20000 or more.
Late CA Sampat Jain
(Expert)
10 March 2008
When income is estimated on gross profit rate, no disallowance can be made - When the income of the assessee was computed by applying a particular gross profit rate and when no deduction was allowed in regard to the purchases of the assessee, there would be no need to look into the provisions of section 40A(3) and rule 6DD(j) - CIT v. Banwari Lal Banshidhar [1998] 229 ITR 229 (All.).
CA. GOPAL SONIKA
(Expert)
10 March 2008
yes
CA Praveen Chopra
(Expert)
10 March 2008
Yes section 40A(3) will apply to cases covered under section 44AD/AE/AF.
10 March 2008
Thanks everybody.
Yes, technically sec 40A(3) will apply. But how far it has teeth for an AO, as in such instances assesse can always claim that he has already taken care of such payments > 20,000, and while considering the Profit declared and rate of Profit (5 % or 10%) he/she has already adjusted the impact of non-allowable expenses u/s.40A(3).
CA Sampat Jain's reply/suggestion is also important. Experts, Please Guide.
Yes, technically sec 40A(3) will apply. But how far it has teeth for an AO, as in such instances assesse can always claim that he has already taken care of such payments > 20,000, and while considering the Profit declared and rate of Profit (5 % or 10%) he/she has already adjusted the impact of non-allowable expenses u/s.40A(3).
CA Sampat Jain's reply/suggestion is also important. Experts, Please Guide.
pushpendra
(Expert)
11 March 2008
Thanks C.A. Sampat jain
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