Sec 40A(3)
This query is : Resolved
26 June 2009
Whether applicabilty of sec 40A(3) is valid in case of purchase/sale of goods in ordinary course of business,means if some one receive cash more than 20000/- on account of sale to some trader.
26 June 2009
Yes.
The same would be an imadmissible expenditure.
For exceptions kindly refer Rule 6DD.
The same would be an imadmissible expenditure.
For exceptions kindly refer Rule 6DD.
Ratan Sharma
(Expert)
26 June 2009
Hi Akhilesh,
Sec. 40A(3) is applicable where any expenditure incurred in cash in excess of Rs. 20000/- in a day to a single party. Therefore sale exceeding Rs. 20000/- is permissible whereas purchases is not allowed. Cash purchase over Rs. 20000/- from a single party will be disallowed and added back to your total income.
Sec. 40A(3) is applicable where any expenditure incurred in cash in excess of Rs. 20000/- in a day to a single party. Therefore sale exceeding Rs. 20000/- is permissible whereas purchases is not allowed. Cash purchase over Rs. 20000/- from a single party will be disallowed and added back to your total income.
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