Disallowance u/s 40A(3) of I.T. Act.

This query is : Resolved

CA Sanjay Baheti (Querist)
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18 June 2011 A business Promotion Expenses is debited by way of crediting to X party of Rs.96000/- in Jan,2011 related to F.Y.2010-11.Subsquently in Feb,2011 & March,2011 the Party was paid in cash on different dates being less than Rs.20000/- & square up the party account.

Now query is whether such expenses is disallowed u/s 40A(3).

prasad

prasad (Expert)
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18 June 2011 yes the entire expenditure of Rs.96000/= will be disallowed.

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
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19 June 2011 Section 40(A)(3) is applicable only when the threshold limit of Rs. 20000 exceeds in a single day and so here 40A(3) is not applicable...and hence full amount shall be allowable as deduction.

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Disallowance u/s 40A(3) of I.T. Act.

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