Splitting cash payment dissalowed?
This query is : Resolved
Nupur Sharma
(Querist)
25 May 2009
Section 40A(3)before amendment said that "Any payment exceeding Rs 20000 and made in cash on a single invoice on a single day will be disallowed for deductions"
However, with effect from april 1, 2009 the word "Aggregate" has been added to avoid splitting of cash payments.
My question is that if an assessee made cash payments exceeding Rs. 20000 on a single day to a contractor (in the year 2004-05)but receipts were taken by the assessee on split amounts...then will the exenditure be disallowed???
Wat contention shoud the assessee give to avoid this disallowance?
Can anyone provide me with some case laws on this issue.
Section 40A(3)before amendment said that "Any payment exceeding Rs 20000 and made in cash on a single invoice on a single day will be disallowed for deductions"
However, with effect from april 1, 2009 the word "Aggregate" has been added to avoid splitting of cash payments.
My question is that if an assessee made cash payments exceeding Rs. 20000 on a single day to a contractor (in the year 2004-05)but receipts were taken by the assessee on split amounts...then will the exenditure be disallowed???
Wat contention shoud the assessee give to avoid this disallowance?
Can anyone provide me with some case laws on this issue.
25 May 2009
No it wil not as when you made payment amended rule was not there.
CA Tilak Raj Sharma
(Expert)
25 May 2009
yes, that will be disallowed.
To avoid the disalloances, you need to take the bills amounting less than 20K from your suppliers, then there will no disallowancy.
To avoid the disalloances, you need to take the bills amounting less than 20K from your suppliers, then there will no disallowancy.
CA Nitin Wadhwani
(Expert)
25 May 2009
If the receipts are of different date then no disallowance even if the payment is lumpsum.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Capital Gail Exemption Certificate
- Issuing of delivery challan by seller of goods
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Accounting treatment of AMC alongwith the purchase of Laptop
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
