Violation of sec40a(3) of income tax rule

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pujan adhikari (Querist)
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31 January 2014 Books of company shows a travelling expenses of Rs.100000 for which cash payment has been made similarly for the same purpose it has withdrawn a cash from its bank of Rs. 100000i.e at first it withdrew a sum of Rs.100000 from bank and paid to the concerned party. does this transaction violates the provision of Sec40A(3) of Income tax. I would be Grateful to anyone who could solve my query.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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31 January 2014 Since the payment for the expense has been made by way cash, Section 40A(3) is applicable and no deduction shall be allowed for the travelling expense.

AVTAR SINGH

AVTAR SINGH (Expert)
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31 January 2014 If the payment has been made on a single day then it will be disallowed. If made in parts not exceeding 20000 a day it will be allowed.

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