Cash purchase
This query is : Resolved
PRASENJIT DAS
(Querist)
21 February 2019
Dear Sir,
I am confused for cash purchase. In this regard kindly clear following queries:
I have purchase a Radiator for Generator. and paid by cash two separate part against invoice value of Rs. 18,290/-
1. If a single bill of Rs. 18,290/- from "ABC Corporation" and paid by cash two part from "APB Pvt Ltd" (1st day 9000/- as advance & balance after receiving the materials), in case shall that be disallowed if is paid in cash?
2. If a bill of Rs.25,000/- and is paid in cash on multiple dates below Rs.10,000/-, in case shall that be disallowed ?
Kindly help me out of this matter.
Regards
I am confused for cash purchase. In this regard kindly clear following queries:
I have purchase a Radiator for Generator. and paid by cash two separate part against invoice value of Rs. 18,290/-
1. If a single bill of Rs. 18,290/- from "ABC Corporation" and paid by cash two part from "APB Pvt Ltd" (1st day 9000/- as advance & balance after receiving the materials), in case shall that be disallowed if is paid in cash?
2. If a bill of Rs.25,000/- and is paid in cash on multiple dates below Rs.10,000/-, in case shall that be disallowed ?
Kindly help me out of this matter.
Regards
CA ANUBHAV
(Expert)
21 February 2019
In both the cases amount shall not be disallowed as s. 40A(3) clearly says that amount paid in a day exceeding Rs. 10,000/- shall be disallowed. Text of section is given below:
(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, 18[or use of electronic clearing system through a bank account, exceeds ten thousand rupees,] no deduction shall be allowed in respect of such expenditure.
(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, 18[or use of electronic clearing system through a bank account, exceeds ten thousand rupees,] no deduction shall be allowed in respect of such expenditure.
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