Sec 40A(3)

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Ganapati (Querist)
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24 September 2009 When an assessee deposited the cash more than 20,000/- directly to the Bank Account of the Suppliers through core banking system, are those payments inadmissible U/S 40A (3) of
IT Act?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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24 September 2009 Yes, the deposit in cash involves two transactions.

1. Cash payment to the supplier.
2. And cash deposited in bank on behalf of that supplier.

As such, cash payment to supplier is covered u/s 40A(3).

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 September 2009 It is not admissible in view of Rule 6DD r.w.s 40(A)(3).

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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24 September 2009 such payment are allowable expenses....
here origin and conclusion of the transaction must be traceable.....
Sri Renukeswara Rice Mills V. ITO (2005) 93 ITD 263 (Bang.)

Ratan Sharma

Ratan Sharma (Expert)
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25 September 2009 It is not admissible. Sec. 40A not amended yet to coverup such transaction.

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