Pls Help me Sec 40A(3)

As per section 40A(3)  assessing officer will surly disallowed the same.

The fact of the case is, we are making payment in cash to supplier with the only difference, instand of supplier we are summited the cash in bank.

Yes any payment or deposit of cash into supplier account will be dis allowed under sec 40A(3)

Section 40A(3) shoul not be read in isolation, reading it together with Rule 6DD makes it clear that the payment in your case wont be disallowed if the origin and conclusion of transaction is traceable.

it will attract provisions of Sec 4o A (3)

Yes According to Sec 40A(3), it will be disallowed.

u'll get dis-allowance u/s 40(A)3 for that payment...

yeah it attracts 40A(3)

 totally agreed with Sharad Saini
 

The Bangalore bench of the Income tax Appellate Tribunal held that such expenditure can be fully allowed as a bsiness expenditure in the situation referred in the query. Citation:- SriRenukeswara Rice Mills Vs.ITO (2005) 278 ITR 77.-----B.Chackrapani Warrier

u can advance any amt. but keep in mind that the must not be shown as expenditure. ur quastion is in the nature of expenditure so sec 40A(3) attracts

The main objective behind 40a(3) is to track and reduce black money in economy.

Here when one directly deposit in the suppliers bank account doesnt create a problem.

But still there is no caselaw for that and hence it will be disallowed.

THe case as mentioned by Bhav sharma is particularly for the Agriculture products.

pls refer to: https://www.caclubindia.com/experts/tax-audit-sec-40a-3--398785.asp

 

So it will be disallowed as Ito cannot track everytime that where the amount is deposited.

Relevant Case Law: Sri Renukeswara Rice Mills v. ITO [2005] 93 ITD 263 (Bang.) In the above case, it was held that Sec. 40A(3) is not applicable because origin and conclusion of transaction are traceable. The above expenditure is not disallowed u/s 40A(3).

 

CA.Suru Venkateswrlu

Bhubaneswar

surukotni @ yahoo.com

yes to escape form sec 40A(3), we need to give a/cpayee check. then only it is allowed as expence
 

hi

According to sec 40A(3) any payment in cash more than Rs 20000 is disallowed. Here in this case client is depositing cash for making payment in bank account  directly. its also like making cash payment so it is hit by this sec for disallowance

cash paid more than 20000 by director to supplier is it allowed by I. tax dept

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