payment of above Rs 20000/-

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2010 Is rules regarding dis allowance of expenditure in case of cash payment of above Rs 20000/- applicable to payment made in Vendors for purchases in normal course of business for trading.For eg in a Retail showroom where all items are being sold in cash or in case buying is also in cash ,then this section is applicable?Further in case a company is buying material regularly from a vendor & make payment in cash every week say of 50k each time ,then what is the situation of regarding applicability of this section?

CA Sanat Pyne

CA Sanat Pyne (Expert)

22 July 2010 KINDLY NOTE THAT WHEN SINGLE BILL AMOUNT AND SINGLE PAYMENT SHOULD BE RS 20000/- THEN THE PROVISION OF THIS SECTION WILL BE APPLICABLE.

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2010 But these purchase transactions will be covered within definition of `Expenditure`?Also in case someone had paid advance of Rs 50000/- single transaction for material to be purhcased later on & later vendor supplied the material let say with single bill of Rs 50000/- ,is this make any difference toward applicability of this section?

CA Sanat Pyne

CA Sanat Pyne (Expert)

22 July 2010 IN THIS CASE THIS SECTION WILL BE APPLICABLE.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2010 & In case payment is being thru cheque & then cheque get bounced & then again payment is made thru cash ,in that case any difference will come?

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)

22 July 2010 No difference will make and Section will be applicable in that case also

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2010 Can you pl explain regarding this Proviso:- Rule 6DD(d):- Where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assesses to such payee.--Means what all cases will be covered under this.