Section 40a(3) & 40a(ia)
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 June 2012
Can there be two disallowances u/s 40A(3) and 40a(ia) of the Income Tax Act to the very same expenditure?
CA PARAS BAFNA
(Expert)
02 June 2012
Any expenditure can be disallowed when a claim has been made by the assessee to allow such amount as an expenditure.
.
Once the claim is disallowed, the expenditure gets nullified. Delete the amount of Expenditure. As a result, Figure of Profit will increase.
.
At the second time when disallowance is being made, delete the amount of the same expenditure. What will you get by deleting 0. The same result.
.
Hence an expenditure can not be added back twice as its effect disappears at the time of first disallowance.
.
Yet, the penalty provisions for non deduction of TDS will come into play.
.
.
Once the claim is disallowed, the expenditure gets nullified. Delete the amount of Expenditure. As a result, Figure of Profit will increase.
.
At the second time when disallowance is being made, delete the amount of the same expenditure. What will you get by deleting 0. The same result.
.
Hence an expenditure can not be added back twice as its effect disappears at the time of first disallowance.
.
Yet, the penalty provisions for non deduction of TDS will come into play.
.
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