Chartered Accountant
41 Points
Joined September 2008
As per my opinion sec 40 A 3 will not be applicable as the section relates only to expenditure and not advances.
In the above case, the repayment is for the advancement and not for the expense so disallowance is totally out of the question.
Receiving advances from debtors and its repayments is a type of loan and hence the same needs to be reported under tax audit in accordance with the section 269SS and T.
The above sections are only informative and are not to be considered as allowance or disallowance for any transactions.