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SANDEEP BAWEJA (Querist)

04 July 2009 Whether payment made directly to employees of some party more than Rs. 20000 is a violence of Section 40(A)(3)?

Ratan Sharma

Ratan Sharma (Expert)

04 July 2009 Any expenses incurred in cash for more than Rs. 20000/- will be disallowed u/s. 40(a)(3). The payment which you are making to the employees of some party if debited to profit & loss account then the same will be voilation of sec. 40(A)(3).

SANDEEP BAWEJA

SANDEEP BAWEJA (Querist)

04 July 2009 Mr Ratan, can u please provide us the source on the basis of which you gave your opinion?

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)

04 July 2009 Yes. If it is given for some expenses.

SANDEEP BAWEJA

SANDEEP BAWEJA (Querist)

04 July 2009 Mr Ratan, can u please provide us the source on the basis of which you gave your opinion?

Ratan Sharma

Ratan Sharma (Expert)

04 July 2009 Dear sandeep,
You can refer sec. 40(A)(3) in the Income Tax Act. Various judgements are produced from time to time. You can also refer to guidance note of our institute.

SANDEEP BAWEJA

SANDEEP BAWEJA (Querist)

06 July 2009 Thanx Sir,but would ur answer be the same if payment to any single employee of that party does not exceed Rs.20000. The payment exceeds the limit only in aggregate.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)

07 July 2009 In my opinion, in this case also, this section should apply. You are making payment on behalf of that party. The assessing officer may be of view, that your payment is to the party, in some different way. It may be a question of arguments.

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