Cash expenses above rs 20000 settled by advances

Depends upon receipt of Rs. 7000/-. If by cash, yes.

Upon the final bill of Rs 26000. the remining amount Rs 7000 was also paid in cash.

Sir can you pl tell why u have mentioned "Receipt of cash" .

Yes, when paid by cash means total amount settled by cash, though in different years, but it attracts section 40A(3). It was by chance mistake, but  meant for payment.

ok .

Thank you very much sir for your valuable input..

Most welcome.