Anil (Manager Finance) (25 Points)
09 September 2010Hi Everybody,
We have received 5 Trucks of Material through the same transporter . Each Truck we have paid Rs. 10000 as freight agaisnt seprate GRN . Is Section 40A(3) Applicable
Anil Khanna
CA Navin Jain
(MANAGER (FINANCE & ACCOUNTS))
(11768 Points)
Replied 09 September 2010
SEC. 40(3) IS NOT ATTRACTED IG GRN IS SEPERATE
Sanjay Singh Rana
(CA)
(208 Points)
Replied 09 September 2010
No in case payment is made against different bills.
40A(3) is not applicable
Ram Avtar Singh
(Nagari Sultanpur U.P.Delhi)
(14517 Points)
Replied 09 September 2010
In case of singal Transporter you are paying to 5 Truck then Sec.40A(3) Applicable.
Yu can Pay only up to 35000/=
Kamal Jain
(FCA)
(200 Points)
Replied 09 September 2010
(3) 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 drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.
Its categorically mentioned "...............to a person in a day........"
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 09 September 2010
| Originally posted by : Kamal Jain | ||
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(3) 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 drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. Its categorically mentioned "...............to a person in a day........" |
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Mohammed Shariq
(Chartered Accountant)
(51 Points)
Replied 09 September 2010
No matters that u have received from the same transporter , Section40A(3) is attracted when payment in cash exceeding Rs20,000/- through a single voucher or on the same day so you can pay Rs10,000 daily in cash but however you have to deduct T.D.S if the total payment exceed Rs,75000/- in a year and further you have pay Service Tax as given below :- 10.3% on ( 25% of the freight Amt.) . rest 75% of freight is abatement Such voilation may attract to penalty and interest.
Ansari
(ca final)
(444 Points)
Replied 09 September 2010
| Originally posted by : Kamal Jain | ||
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(3) 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 drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. Its categorically mentioned "...............to a person in a day........" |
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Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 10 September 2010
sorry but i disagree with the above members........sec 40(A)3 IS attracted only when payment and exp both exceed 20000/35000........in the above case it wont apply accordingly.......
| Originally posted by : Ram Avtar Singh | ||
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In case of singal Transporter you are paying to 5 Truck then Sec.40A(3) Applicable. Yu can Pay only up to 35000/= |
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Sanjay Singh Rana
(CA)
(208 Points)
Replied 10 September 2010
section 40A(3) is applicable in respect of expenditure an expenditure claimed as deduction under sections 30 to 37
Section 40A (3) It provides that the payment in a single day should not be exceeding Rs. 20000. It doesn’t mean the single payment shouldn’t 20000 but the aggregate amount should not exceed the limit.
Here aggregate amount means when payment of single bill is made in parts for evasion of tax aggregate of all such payments should be considered
Some parties split high value payment into several cash payment for evasion of section 40A (3) a, so this rule is for evasion of payments.
But in case where payments are made to same person in a single day (other wise than account payee cheque, demand draft or any transaction made by banks like RTGS) for different bill which do not exceed 20000, should not be covered under section 40A (3)
so in my opinion sec 40A(3) is not applicable in this case
thanks :)
Kamal Jain
(FCA)
(200 Points)
Replied 10 September 2010
People who disagree should give case law or any reference material to substantiate their view.
Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 10 September 2010
as per sec 40(A)3 ,an exp is disallowed if payment or aggregate of payments made otherwise than by ac payee cheque/draft to a single person in respect of such exp exceeds 20000/35000..the words IN RESPECT OF SUCH EXP CLEARLY DENOTES THAT THE BILL AMT SHD ALSO >20000/35000.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 10 September 2010
HI FRIENDS,
DEFINATELY DISALLOWED UNDER SECTION 40A(3) AS THE SECTION TELLS ABOUT THE PAYMENT OR AGGREGATE PAYMENTS MADE TO A PERSON IN A SINGLE DAY IF EXCEEDS RS.35000 IN CASE OF PAYMENT TO TRANSPORT OPERATORS OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, WOULD DISALLOWED. THUS THE SECTION INTERPRETED WITH REFERENCE TO TOTAL PAYMENTY IN DAY TO A PERSON AND NOT WITH THE REFERENCE TO BILLS AGAINST WHICH SUCH PAYMENT IS MADE.
REGARDS,
MANOJ
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