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Salary paid to Directors in Cash

This query is : Resolved 
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(Querist)
12 June 2008 Hi Friends,

Please resolve my problem.
A company was newly formed and they are paying salary to their directors in cash exceeding Rs.20000 otherwise than by an account payee cheque and directors withdraw cash from the bank. Then it will attract disallowance of Section 40(A)(3) or not.
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Shyam Lal Naik

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Shyam Lal Naik (Expert)
12 June 2008 It will.

Any expenditure paid in cash in excess of the threshold limit will be disallowed. Directors remunaration is no exceptiion.
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C.A Rohit Gambhir

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C.A Rohit Gambhir (Expert)
12 June 2008 Agreed
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