Crossing of Cheque

1898 views 22 replies

When a bussiness payment has been made thorugh internet banking, is Sec.40A(3) applicable (as the said section says any payment other than by crossed cheque or demand draft)?

Replies (22)

i think it wont be applicable...

 

the sole purpose of this section is to stop fake transactions in the books.

Agree with sunshine.Ajay you are interpreting the section word by word which may not turn out to be practical in many of the cases.Sec 40 A(3) will not be applicable to your case

Agree with sunshine

agree with sunshine. this section will not be applicable 

This section will not be applicable for such transaction

Hi,

 

I believe it is very correct to read the provisions word by word as the legislature would have used every word with a motive....

 

Regarding the query, there will be no disallowance as Rule 6DD of IT Rules provided for the exceptions.

Originally posted by : Sunshine...

I think the main purpose of cross chq.is, bank to bank txn. i.e. not as negotiable instrument so,the section wont be aplicable
.

 

 

 

That will b considered as good as bank tranfer...

One has to see true intention behind ths provision.

Originally posted by : Sunshine...

i think it wont be applicable...

 

the sole purpose of this section is to stop fake transactions in the books.

Practically it wont be applicable as everyone said but provisions are provisions afterall. One can claim the disallowance and wait if it is objected by the assesing officer.

Thank u all.... so i conclude that any payament made through internet tranfers are as good as making payments by crossed cheque/draft as allowed under Sec.40A(3)...

To Quote Mr.Dharmaraju  "Regarding the query, there will be no disallowance as Rule 6DD of IT Rules provided for the exceptions."...just to confirm...are u talking about the clause in Rule 6DD  im giving below ?

"(d)   where the payment is made by—

   (i)   any letter of credit arrangements through a bank ;

  (ii)   a mail or telegraphic transfer through a bank ;

(iii)   a book adjustment from any account in a bank to any other account in that or any other bank ;

(iv)   a bill of exchange made payable only to a bank.

            Explanation : For the purposes of this clause and clause (h), the term “bank” means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company54 as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India"

The Online payments can only be done through the Banks. Therefore the question of attraction of section 40(A)(3) does not arise.


Regards,

Devendra K

Originally posted by : Dharmaraju

Hi,

 

I believe it is very correct to read the provisions word by word as the legislature would have used every word with a motive....

 

Regarding the query, there will be no disallowance as Rule 6DD of IT Rules provided for the exceptions.

Agreee

not applicable


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register