Income tax 40a(3) clarification

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Ankul Baranwal (Querist)
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28 January 2014 provision of section 40A(3)of income tax act apply if the amount is given in cash exceeds 20000 for advances against expenses ???

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 January 2014 If the advances were ultimately treated for discharging the liability to pay the price of the goods purchased or services rendered then 40A(3) attracts on such advances.

Citation:- Kejriwal Iron Stores Vs. CIT [1988] 169 ITR 12 (Raj).

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