Cash Payments
This query is : Resolved
CA Nitin Wadhwani
(Querist)
02 September 2008
author : Jiju Oommen
Posted On : 9/1/2008 10:37:20 PM
Cash expenses exceeding Rs.20,000 are disaalowed.
But if a party gives the some amount as advance to another person by maintaining an account, say Adavance to Gopal, and if authorises that person for such expenses what is the applicability of the Section.
Act says only about expenses...
whether such advances are covered under this act.
Answer : NO.
Posted On : 9/1/2008 10:37:20 PM
Cash expenses exceeding Rs.20,000 are disaalowed.
But if a party gives the some amount as advance to another person by maintaining an account, say Adavance to Gopal, and if authorises that person for such expenses what is the applicability of the Section.
Act says only about expenses...
whether such advances are covered under this act.
Answer : NO.
Manish Karwa
(Expert)
02 September 2008
Advance is not an expenses, hence there is no question of allowance or disallowance.
Late CA Sampat Jain
(Expert)
02 September 2008
Advance payments are also covered - Even if the payments were made by way of advances and were ultimately treated as discharging the liability to pay the price of the goods purchased, the payments so made must be considered to fall within the expression ‘expenditure’ incurred for payment of the price of the goods - Kejriwal Iron Stores v. CIT [1988] 169 ITR 12 (Raj.).
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