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Sec 40 (A) (3)

Deepak Agarwal (Chartered Accountant) (117 Points)

16 July 2011

Hey friends..

Yesterday i posted a query regarding sec 40 A 3, and i got some important reply stating that if there are two different invoices or vouchers,,, then they represent 2 seperate expenditures, and the sec 40 A 3 applies on "an expenditure" as the wording the sec has...!!

But then what's the role of "Aggregate in a day" as inserted from the A.Y 2009-10.

I have also make discuss the issue with my teacher and C.A, and they also agree with me that even though the exp or payment are represented by 2 or more invoices, the aggregate amount in a day must not exceed 20000 otherwise the whole exp or payment will be disallowed.

Please share a clear view regarding the sec.

Thanks..

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5 Replies

Sunshine (Helping All) (10575 Points)
Replied 16 July 2011

2 different invoices amount to separate payments...so it will be allowed even if the aggregate exceeds 20000 to a same person within a single day..

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 16 July 2011

the intention and crux of ec. 40A(3) is

" expenditure as well as payment must exceed20000"

nd two invoices are considered as diff. expenditure

RAJU (LEARNER) (1089 Points)
Replied 16 July 2011

Hi Deepak,

`Aggregate in a day` may be considered relevant when payments are made vide two vouchers on a single day for a single expenditure (single invoice)....

Versatile....... (Chartered Accountant) (82 Points)
Replied 24 July 2011

the intention and crux of ec. 40A(3) is

" expenditure as well as payment must exceed 20000"

means if there are two bills each of less than Rs.20000/- say Rs. 16000/- & 14000/- then if these bills are paid together in a single day then section 40A(3) will not get attracted....vice versa if two bills are of say Rs. 21000/- & 24000/- but paid on different days in cash for less than Rs. 20000/- then also section 40A(3) will not apply....thats because of the above statement as originally posted by sumit....

so when both expenditure amount & payment amount(in cash) exceeds Rs. 20000/- then only section 40A(3) gets attracted else not....

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 24 July 2011

Originally posted by : CA SUMIT GROVER
	the intention and crux of ec. 40A(3) is " expenditure as well as payment must exceed20000" nd two invoices are considered as diff. expenditure