Section 40 a(3)

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P F A & Co., Chartered Account (Querist)
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28 May 2012 suppose a single party given more than one bill for same expenditure in same date which exceeds the limit in aggrigate. can we treat it as a different expenditure and make cash payment above limit ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 May 2012 Not possible. in such a case also Section 40A(3) is attracted.

CA PRAVEEN SINGH

CA PRAVEEN SINGH (Expert)
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28 May 2012 section 40A(3) applies to payment made to a party at one time and not to the aggregate of the payments made to a party in the course of the day as recorded in the cash book.According to the judicial opinion, the words used are ‘in a sum’, i.e., single sum.Therefore, irrespective of any number of transactions, where the amount does not exceed the prescribed amount in each transaction,the rigours of section 40A(3) will not apply.

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Section 40 a(3)

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