Sec 40a(3) of income tax act
This query is : Resolved
paresh zatakia
(Querist)
15 March 2013
Dear Colleagues,
A owes money to B , B owes money to C, C owes money to A
All these are due to purchase /sale transaction between them, all are unrelated/unassociated.
Now suppose B gives letter to A saying:
A CAN DEBIT ACCOUNT OF B BY CREDITING ACCOUNT OF C WHICH SHALL BE TREATED AS PAYMENT BY A TO B
Querry:What is the repercussion under sec 40A(3) of Income tax Act
REGARDS
C.A.PARESH ZATAKIA
9833855518
A owes money to B , B owes money to C, C owes money to A
All these are due to purchase /sale transaction between them, all are unrelated/unassociated.
Now suppose B gives letter to A saying:
A CAN DEBIT ACCOUNT OF B BY CREDITING ACCOUNT OF C WHICH SHALL BE TREATED AS PAYMENT BY A TO B
Querry:What is the repercussion under sec 40A(3) of Income tax Act
REGARDS
C.A.PARESH ZATAKIA
9833855518
Soumitra Basu
(Expert)
17 March 2013
THIS IS A BUSINESS TRANSACTION AND DISALLOWANCE SHALL BE APPLICABLE ON SUCH PAYMENTS.
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