Sec 40(a)(3)

This query is : Resolved

Praveen Kumar v (Querist)
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13 May 2013 Help in the Below Cases

Being Advance received from One company is adjusted towards the sale made to the other company.

Will the above situation will make the payment to be add back to the profit as per Sec 40(a)(3) of Income Tax.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 May 2013 Section 40A(3) covers the expenditure for which the payment is made otherwise than an account payee cheque.
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Since the advance is made through an account payee cheque by Company -1, though it is being credited to Company-2, Section 40(A)(3) conditions are duly complied with and as such there is no need to add-back the expenditure into profits.
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Praveen Kumar v

Praveen Kumar v (Querist)
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16 May 2013 Thank you Sir for your information

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