payment of morethan 20000 in cash

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Rafiullah (Querist)
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14 January 2010 can a travelling co. pay morethan 20000 in cash to escort/ employee for travelling exp. on the behalf of the co.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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14 January 2010 There will be disallowance

Aditya Maheshwari

Aditya Maheshwari (Expert)
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14 January 2010 Disallowable

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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14 January 2010 yes disallowed.

Rafiullah

Rafiullah (Querist)
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14 January 2010 actully rhere is a practical problum, co. requires to pay cash for travelling exp of toure. co cant pay by cheque.please give ans on practical basis and only in case u have done audit of travelling co.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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14 January 2010 If possible then break up the travelling bill so that a single bill does not exceed Rs. 20,000 or show payment made not exceeding Rs. 20,000 on a single day

Rafiullah

Rafiullah (Querist)
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14 January 2010 i wanr to whether it is alowable if not there is any case law regarding disallowance of the same.

Rafiullah

Rafiullah (Querist)
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14 January 2010

CA Prashant Gupta

CA Prashant Gupta (Expert)
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19 January 2010 u/s 40A(3) Where the assessee incurs any expenditure in respect of which payment or aggregate of payments made to a person in a day, otherwise than by a A/C payee cheque exceeds 20,000/- no deduction shall be allowed.
This make two conditions both payment and expense bill should exceedd 20,000/-.
Co can pay employee more than 20,000/- in cash but the bill of expenses provided by employee should be less than 20,000/-. more than one bill can be paid in one payment. Then it will be allowed.
But if bill is more than 20,000/- and payment is also more than 20,000/- then disallowed.

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