Section 40A(3)
shaishav adani (4 Points)
27 November 2019
Is payment done in 5 parts of Rs8000 against Bill of Rs40000 allowed?
13 Replies
shaishav adani
(4 Points)
Replied 27 November 2019
If i pay in Cash on different days then it is allowed?
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 28 November 2019
Disallowed as payment against invoice is exceeding the limit of Rs 10,000/-.. it is immaterial that you are making payment against that invoice below 10000 on different dates..
Kapadia Pravin
(17264 Points)
Replied 28 November 2019
Under 40A(3) -Per day / Per person cash payment or aggregate cash payment in excess of 10000/- is not allowed as expenditure.
This has nothing to do with amount of the bill.
Payment of 8000 x 5 different dates of a bill of 40000/- is allowable.
-------
Exceptions:- 40A(3) does not apply to repayment of loans or payment towards the purchase price of capital assets such as plant and machinery not for re-sale.
This has nothing to do with amount of the bill.
Payment of 8000 x 5 different dates of a bill of 40000/- is allowable.
-------
Exceptions:- 40A(3) does not apply to repayment of loans or payment towards the purchase price of capital assets such as plant and machinery not for re-sale.
sabyasachi mukherjee
(27734 Points)
Replied 28 November 2019
If the aggregate payment exceeds Rs. 20000 under different cash memo from a person in a single order on a particular day ; its disallowed.
The expense cannot be considered as an allowable deduction provided he earns his income from business and profession.
The expense cannot be considered as an allowable deduction provided he earns his income from business and profession.
sabyasachi mukherjee
(27734 Points)
Replied 28 November 2019
Shaishav its Rs.10000 per day per transaction for a particular order.
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 28 November 2019
@ Kapadia Pravin
w.e.f. 01.04.2017 the limit for cash payment in respect of an expenditure is reduced to Rs 10000/- instead of Rs 20000/-. The disallowance u/s 40A(3) pertains to not only a single or aggregate payment but also in respect of an 'expenditure' Thus in other words for the purposes of section 40A(3) both the payment and amount of bill i.e. expenditure should not exceed Rs 10000/- even if payment is made on different dates. There is a tribunal ruling to this effect in the case of Raja & Co. v. CIT [2014] 64 SOT 12
w.e.f. 01.04.2017 the limit for cash payment in respect of an expenditure is reduced to Rs 10000/- instead of Rs 20000/-. The disallowance u/s 40A(3) pertains to not only a single or aggregate payment but also in respect of an 'expenditure' Thus in other words for the purposes of section 40A(3) both the payment and amount of bill i.e. expenditure should not exceed Rs 10000/- even if payment is made on different dates. There is a tribunal ruling to this effect in the case of Raja & Co. v. CIT [2014] 64 SOT 12
Kapadia Pravin
(17264 Points)
Replied 28 November 2019
@ Abhay Gupta
Hi
Thanks for your views. But there are innumerable decisions by High Courts and Supreme Courts on section 40A(3).
The section talks about
""""
Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person...... in a day,...... otherwise than by an account payee cheque ......exceeds 10000/-, ….......no deduction shall be allowed in respect of such expenditure.""""
Here is an Gauhati Hight Court decision ....
""""
The Gauhati High Court has observed that Section 40A(3) applies only to payments made on account of 'expenditure incurred' and the payment made for purchase of stock-in-trade cannot be termed as 'expenditure incurred since money does not go irretrievably in such cases.""
------
In my reply post , limit for cash payment is Rs 10000/- . I am aware of this .
But in a reply by another member Sanyasachi, He has mentioned 20000/- wrongly.
Hi
Thanks for your views. But there are innumerable decisions by High Courts and Supreme Courts on section 40A(3).
The section talks about
""""
Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person...... in a day,...... otherwise than by an account payee cheque ......exceeds 10000/-, ….......no deduction shall be allowed in respect of such expenditure.""""
Here is an Gauhati Hight Court decision ....
""""
The Gauhati High Court has observed that Section 40A(3) applies only to payments made on account of 'expenditure incurred' and the payment made for purchase of stock-in-trade cannot be termed as 'expenditure incurred since money does not go irretrievably in such cases.""
------
In my reply post , limit for cash payment is Rs 10000/- . I am aware of this .
But in a reply by another member Sanyasachi, He has mentioned 20000/- wrongly.
sabyasachi mukherjee
(27734 Points)
Replied 28 November 2019
@ kapu
either u keep a spectacle or keep mumm.
from ay 2018-19 it has been changed to 10000.
there is no.point copying from the book the case laws ...
we all hv the details...
either u keep a spectacle or keep mumm.
from ay 2018-19 it has been changed to 10000.
there is no.point copying from the book the case laws ...
we all hv the details...
Kapadia Pravin
(17264 Points)
Replied 29 November 2019
Sanya either accept you wrongly mentioned 20000/- or see in mirror .
Stay off when two are on healthy discussion.
where is reply for query ????😇😇
Stay off when two are on healthy discussion.
where is reply for query ????😇😇
Recent Topics
- TDS return submitted, but neither rejected nor acc
- Trade payables
- Kickassanime22
- NSDL DEMAT-annual custody fees
- Claiming Rent Expenses Invoiced Late Due to Vendor
- Discount and Outward freight on Sale GST RCM
- Income from debt mutual funds in ITR4
- Gold ETF STCG and LTCG
- Property capital gain, Bought in 2002 and sold in
- TDS Implication on Expensing Off Unrecovered Invoi
Related Threads
Trending Online Classes
-
GST LIVE Certification Course - 42nd Weekend Batch(With Govt Certificate)
Industry Expert17 May 2025
CAclubindia
