Cash Payment to Supplier

This query is : Resolved

Shankar Rao (Querist)
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21 March 2011 Dear all

My friend has purchased goods for poultry consumption of Rs. 30,00,000 in 15 bills ( i.e 200000 per time*15 times ) all payment is made by cash. the supplier has given receipt of Rs. 19500 per day for entire payment of Rs. 30,00,000 kindly let me know his position if his books selected for scrutiny

Thanking you
MNS

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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21 March 2011 Since the bill amount of each bill is more than 20000/-, section 40A(3) would be attracted.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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21 March 2011 Single payment which exceeds Rs 20,000/- or payment which exceeds Rs 20,000/- to single person in the same day will get disallowance 40 A (3)..+

100% expense will be add back to your profit...

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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21 March 2011 its will disallowed.but suppliers is bifercate that amt. to safe from sec. 40A(3) but its a risky task you need to pay cash below 20,000 in single day or pay by cheque,dd/neft & rtgs. their are many facilities which help your friends to pay in a one day.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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21 March 2011 Suppier may enter the same sale in different date. But you will be in a Risk..

The objective of this rule is to curb againgst the balck money.. You have to pay by account payee cheque or draft only...

why cant you account the purchase in different date?

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