Disallowed

As per section 40(A)(3) of the Income-tax Act,1961, where an assessee incurres any expenditure in respect of which a payment or aggregate of payment made to a person in a day otherwise by mode other than account payee cheque in excess of 20,000 shall be disallowed. In the given case the Company has made payment to the Hotel (a single person - an assessee) in excess of 20,000. Hence, the entire expenditure will be disallowed.