u/s 40A(3)
This query is : Resolved
14 November 2008
Dear sir,
As per section 40A(3), if a cash expenses which exceed Rs.20,000 will be dis allowed. Can we split the amount to avoid the dis allowance as per the above said section. ( for ex. if we are going to pay the labour charges for a sum of Rs.38000 by cash. During this time can we booked as two entries like Rs.19000 each.
Pls clarify
As per section 40A(3), if a cash expenses which exceed Rs.20,000 will be dis allowed. Can we split the amount to avoid the dis allowance as per the above said section. ( for ex. if we are going to pay the labour charges for a sum of Rs.38000 by cash. During this time can we booked as two entries like Rs.19000 each.
Pls clarify
S.Srinivasaraghavan
(Expert)
14 November 2008
No. They will be aggregated for the purposes of 40A(3).
14 November 2008
You should have two bills in different dates, then you can pay bill by bill but then also payment should be in different dates...
Tip: Pay by cash on Bank Strike Day
Tip: Pay by cash on Bank Strike Day
Ravikumar.G
(Expert)
17 November 2008
Aloo Supply co 121 ITR 680 SLP dismissed by SC :
More than one payment in single day:
When a person makes various payments at different times during a day to the same person and each of such payment is below rs.20k sec 40A(3) is not applicable, even if the aggregate of such payments exceeds rs.20k, no disallowance can be made under this section
More than one payment in single day:
When a person makes various payments at different times during a day to the same person and each of such payment is below rs.20k sec 40A(3) is not applicable, even if the aggregate of such payments exceeds rs.20k, no disallowance can be made under this section
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